Prime Minister Narendra Modi-led BJP is set to rule Gujarat, for a record sixth term, with the party maintaining a strong lead against Rahul Gandhi's Congress. The majority mark in the 182-seat Gujarat assembly is 92, and current trends show the BJP ahead in the race compared to the Congress. The Gujarat election results also affected the markets today. The Sensex first slumped over 700 points after reports came of a neck and neck fight between the Congress and the BJP in the early hours of the day. However, it was quick to recover as trends showed the BJP jump ahead of Congress.
This result should bode well for some of the Gujarat-linked stocks. Here's a list of the top stocks to watch out in the weeks ahead. The impact of elections aside, these stocks gained more than 100% in the last one year.
Gujarat Raffia Industries: A manufacturing company incorporated and established in Gujarat near major sea ports. It claims to be one of the biggest export house for PE Tarpaulin, Plastic Sheeting, Ground Sheeting, Geomembrane, Tents, Shelters, Pond Lining, Canal Lining, Fumigation cover, HDPE Woven Bags, PP Woven Bags and Ropes. In FY17, company's top line and operating profit fell by -1.4 per cent and -0.6 per cent respectively. Jump in interest costs by over 22 per cent negatively impacted the bottom line that fell by -0.7 per cent compared to FY16. In Sep'17 quarter the company improved its top-line that grew by 4.87 per cent. However, operating profit fell by -34.5 per cent due to increase in total expenditure by over 11 per cent. Falling interest and depreciation costs helped bottom-line that grew by 6.03 per cent compared to Sep'16 quarter. In the last one year, the stock outperformed the market by over 7 times. Between 15 Dec 2016 and 15 Dec 2017, the stock delivered 190.4 per cent returns compared to BSE Sensex that delivered 26.2 per cent returns. The stock jumped 5 per cent intra-day today after the results trends points to the BJP victory in Gujarat.
Gujarat Narmada Valley Fertilizers and Chemicals: A joint sector enterprise promoted by the Government of Gujarat and the Gujarat State Fertilizers and Chemicals Ltd.(GSFC). Its business verticals includes industrial chemicals, fertilizers and information technology (IT) products. The Company manufactures various fertilizers, such as urea, Ammonium Nitrophosphate, Narmada Plus (19:19:19), Neem De-Oiled cake, Muriate of Potash and Single Super Phosphate. It also offers various chemicals, such as Weak Nitric Acid, Formic Acid, Ammonium Nitrate, Ethyl Acetate, Methyl Formate, Calcium Carbonate, Nitrobenzene and Catsol. In IT vertical, the company offers System integration, E-procurement, E-Governance projects, Data centers and Cloud storage under the brand name of (n)code solutions. In FY17, the company sales revenue grew by 0.8 per cent. Helped by decline in total expenditure the operating profit grew by 16 per cent YoY. The company registered a healthy bottom line growth of 201.9 per cent helped by reduction in interest costs. In Sep'17 quarter, the top-line and bottom line grew by 3.1 per cent and 0.38 per cent respectively compared to Sep'16 quarter. The stock outperformed the market by 4.8 times in the last one year. Between 15 Dec 2016 and 15 Dec 2017, the stock delivered 126.8 per cent returns compared to BSE Sensex that delivered 26.2 per cent. The stock jumped close to 3 per cent in intra-day trade today after the trend indicates majority to BJP in Gujarat.
Gujarat Alkalies and Chemicals: A chemical manufacturing company that deals in Caustic Soda Lye and Caustic Soda Flakes. The chemicals offered by the company are used by various industries, such as textiles, pulp and paper, soaps and detergents, alumina, water, treatment, petroleum, plastics, fertilizers, pharmaceuticals, agrochemicals, plant protection, dyes and dyes intermediates, refrigeration gases. It exports its products to Europe and West Asia. In FY17, the company's sales revenue and net profit grew by 3.7 per cent and 40.3 per cent respectively. Decline in total expenditure helped net profit margins that improved from 9.9 per cent in FY16 to 11.4 per cent in FY17. The company has displayed efficiency in the utilization of capital with its ROCE improving from 8.5 per cent in FY16 to 11.4 per cent in FY17. In Sep'17 quarter, the company reduced its expenditure by -6.7 per cent helped by raw material costs that fell by over -9.4 per cent. The profit margins improved from 14.9 per cent in Sep'16 quarter to 17.9 per cent in Sep'17 quarter. Its EPS grew by 21.7 per cent helped by rising other income and falling expenses. The stock outperformed the market by 4.4 times in the last one year. The stock returned 115.12 per cent compared to BSE Sensex that delivered 26.2 per cent returns. The stock hit an intra-day high of Rs 757.5 which is 2.5 per cent over the previous trading day close.
Gujarat Ambuja Exports: Manufacturer of starch derivatives, soya derivatives and cotton yarn. Its business segments include Cotton Yarn, Maize Processing, Agro Processing and Power. The Agro Processing segment includes solvent extraction, flour mill and cattle feed operations. The Power segment includes direct or indirect power generation for captive use. The company products include cotton yarn, refined edible oil, Vanaspati ghee, bakery shortening, wheat flour, soya lecithin, soya flakes, Indian soyabean meal, Indian soyabean hulls, rapseed meal deoiled extraction and rapseed lecithin. In FY17, the sales revenue and total expenditure grew by 8.1 per cent and 7.8 per cent respectively. Helped by increase in sales revenue, other inocme and decline in interest costs the company registered a bottom line growth of 23.3 per cent YoY. In Sep'17 quarter, the company's net profit fell by over -29 per cent due to substantial jump in interest costs by 225 per cent. Moreover, the expenditure growth was higher than the revenue growth that led to fall in operating profit by -4.2 per cent. The stock outperformed the market by 4 times in the last one year. The stock returned 105.2 per cent compared to BSE Sensex that delivered 26.2 per cent returns. The stock hit an intra-day high of Rs 191.2 that is 3.5 per cent over the Friday's closing price.