Daily Brief India: Housing and Urban Development Corporation Limited, Quess Corp Ltd, SeedWorks International Ltd and more

In today’s briefing:

Asian Equities: Twenty Attractive and Cheap Indian Mid-Caps
Shortlist of Top India Small Cap Ideas: Value, Insider Buying & Margin of Safety-February 2025
SeedWorks International Ltd Pre-IPO Tearsheet

Asian Equities: Twenty Attractive and Cheap Indian Mid-Caps

The headline Indian mid cap indices are still expensive, despite a sharp decline since late September. However, when adjusted for growth, many fundamentally attractive mid-caps are cheap.
We screen mid-caps with PEG<1.3x, consensus Buy recommendations and increasing consensus EPS estimates over the past six months. We choose well-covered stocks so that the consensus estimates are meaningful.
Our basket of 20 contains six financial stocks, five materials, four industrials and three consumer discretionaries. Many pertain to the themes of renewable energy, data centers, healthcare, tourism and infrastructure.

We compile our selection of small-cap companies based on our desired characteristics: insider buying, value, near term growth triggers and margin of safety.
Out top picks are Sarla Performance Fibers Ltd (SRPL IN) , Quess Corp Ltd (QUESS IN) , and GNA Axles Ltd (GNA IN)
Given the steep correction in small and mid-cap Indian stocks, all the mentioned companies have seen active insider buying in recent weeks.

SeedWorks International Ltd (1441147D IN) (SIL) is looking to raise about US$115m in its upcoming India IPO. The bookrunners for the deal are Equirus, DAM, SBI.
SIL is a seed research and development organization engaged in the research, production, and marketing of hybrid seeds as well as open-pollinated variety (OPV) seeds for rice, wheat, and mustard.
According to F&S Report, the company was the second fastest-growing Indian seed company in terms of revenues between FY21-24, with a CAGR of 11.98%.

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