Small Cap, fundamentally strong stocks to buy now for short-term are Astral Ltd., Deepak Nitrite, and Tanla Platforms Ltd. These are great stocks that can be bought at dips to give great results in both short and long-term basis.
| Stock | Buy Zone | Target | % Gain |
| Astral Ltd. | Rs. 1400-1500 | Rs. 1900 | 37% |
| Deepak Nitrite | Rs. 1900 | Rs. 2260 | 20% |
| Tanla | Rs. 700 | Rs. 1160 | 50% |
Stock to buy now- Astral Ltd.
Astral Poly Technik Ltd., a small cap company was established in 1996. It is a leading manufacturer of pro-India plumbing and drainage systems. The company is in the manufacturing of pipes and fittings for plumbing, sewage, agriculture, industries, and fire sprinkles.
Astral is expanding itself in the adhesive business; sanitary ware and decorative paints business as well.
It is using bollywood stars and IPL teams for its brand endorsements
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Key Matrics
| Market Capitalization | 38931 |
| ROCE | 29.6 |
| Debt to Equity | 0.04 |
| Profit Growth | -25% |
| PEG Ratio | 3.73 |
| Pledged Percentage | 0 |
Financials
Astral Is a debt-free company with CAGR sales growth of 23% and CAGR profit growth of 29% . Dec’22 revenue increased by 13% as compared to last years Dec. quarter but there was decline in the quarterly profits because of the increased material cost.Although OPM decreased by 3% but this will be resolved in the results of next quarters.
Astral has posted highest ever sales in latest quarter as well as in YoY results. Profit has also grown consistently over the years for this company. EPS has grown from Rs. 0.66 to Rs.18.06 since 2011.
Balance Sheet is strong with increased reserves and reduced borrowings. There has been constant expansion going on in the company with current CWIP being 88 Cr.
Cashflows has always been positive and inline with the profits.
DIIs have increased their stakes from 9% to 16.5%. Promoters have also increased minor holdings.
Technicals
Its share price is down by more than 25% from its lifetime high.
The share price took support at the levels of 1300 and bounced back.
A rounding pattern is formed and the share price usually gets back to the top of the rounding pattern.
Stock to buy now – Deepak Nitrite
Deepak nitrite, a small cap chemical manufacturing company with manufacturing facilities in Gujarat, Maharashtra, and Telangana.
it is a leading manufacturer of organic, inorganic and speciality chemicals used in Paints, cosmetics and many other industries.
it is market leader with 75% market share in nitrate chemicals in India.
The company has recently doubled its capacity expansion in the Dahej, Gujarat.
The company wants to expand it’s product portfolio to high value intermediate and new downstream products.
Almost debt free company, It has given CAGR sales growth of 38% and profit growth of 87% in the last 5 years.
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Key Matrics
| Market Capitalization | 25527 Cr. |
| ROE | 44.5 |
| Debt to Equity | 0.07 |
| Profit Growth | -18.7 |
| PEG Ratio | 0.33 |
| Pledged Percentage | 0 |
Financials
Deepak nitrite sales have grown from 1300 CR in 2015 to 7800 CR in TTM.
Operating profits have gone 10 times during the serial.
operating margins usually vary from 11 to 29%, which may be because of the cost of raw materials.
The balance sheet is very healthy where reserves have gone 10 times since 2015 and fixed assets have grown by more than four times during this period.
the company keeps on expanding in one area or the other with 181 CR CWIP still going on.
The company has a history of positive cash flow.
Although, when we see the shareholding pattern, promoters holding is pretty same, FIIs and DIIs have reduced the Holdings by 2 and 3% respectively. Still, 70% of the shareholding pattern is a strong hand.
Technicals
Deepak nitrite made a lifetime high at 3000 and is down by more than 35%.
Deepak nitrite has posted the highest ever sales both on QoQ and YoY basis although profits reduced a bit because of inflation in material cost.
The share price has fallen down in a rounding form. It is expected to go back to the highest point of the rounding pattern i.e. Rs 2259.
Stock to buy now – Tanla Platforms Ltd.
Tanla Platforms is a small cap cloud communication provider to businesses. With its headquarter in Hyderabad it has a reputed clientele of Vodafone, Airtel, Facebook, Linkedin, Kotak Bank etc.
It is a technology-based company with products like Wisely, Trubloq, Voice, IOT etc.
Read More:- IRCTC Share Price Target
Key Matrics
| Market Capitalization | 8405 |
| ROCE | 58.8 |
| Debt to Equity | 0.03 |
| Profit Growth | -6.62 |
| PEG Ratio | 0.27 |
| Pledged Percentage | 0 |
Financials
Tanla Platforms have increased its sales every quarter every year both on QoQ and YoY basis.
Sales have gone 10 times since 2011 and profits have gone from negative to 500 Cr. in TTM.
The company posted negative profits in 2011-14 due to excessive depreciation and also the threshold of sales after which companies become profitable is achieved.
The balance sheet is healthy. Cashflows are positive.
Promoters have increased their holdings by 10% and FIIs have increased their stake by 14%. DIIs seem uninterested in this stock.
Technicals
Tanla is down by 70% from its lifetime high is available at very attractive valuations. According to current financials, it seems like a value buy to us.
A huge volume could be seen when the share price touched the level of Rs. 575.
It is following the Dow theory by making lower lows and lower highs.
Entry could be taken into this company as soon as its share price crosses the 700 level and this stock can then be kept till a target of at least 1160.
Investment Tips
Do not invest more than 5% of your portfolio in one stock.
Invest your own money for investing which you won’t be needing for atleast 3 years.
Invest at the buy zone and sell at the target. Give stock time to perform. Donot get worried if the stock falls down after you have bought it.
No need of stop loss. Have a strong conviction in the company you invest.
Do your own research before investing.
Use the link to open a Demat account in Zerodha.
Disclaimer- All investments and trading in the stock market involve risk. Any decision to place a trade in the financial markets, including trading in stock should only be made after thorough research. Trading strategies or related information mentioned in the article is for informational purposes only. Use your due diligence before investing. These are just predictions. They may or may not be true. We are not SEBI-registered analysts.
Hi Megha,
Came across your site accidentally. Enjoyed going through your posts. Keep up the good work and continue sharing your insights.
Regards…
Deepa
Thank you Deepaji