Bihar Based Stocks in Focus with Nitish Kumar's Key Role in Modi 3.0

One thing that has kept markets on edge lately is the Bihar election. The 2025 Bihar election results carry significance far beyond the state's borders, and the outcome is expected to influence market sentiment as well. A few stocks are likely to see action post the results, especially companies with a strong presence or business exposure in Bihar.

For investors tracking such opportunities, we had compiled a list of companies operating in this space back in June 2024.

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7 Bihar-Based Stocks to Watch as Nitish Kumar Takes Centre Stage in Modi 3.0

Stock market enthusiasts combining the world of politics and investing were focused on two kinds of stocks for the past two weeks -

Modi stocks.

TDP related stocks.

This week, a new group of companies with strong ties to Nitish Kumar and Bihar have started emerging as clear frontrunners.

With vast experience in politics and a reputation for effective administration, Nitish Kumar is likely to be a key figure in shaping the policies and priorities of the Modi 3.0 government.

So right now is the time to track the below companies which are located or operate in Bihar.

#1 Aditya Vision

First on the list is Aditya Vision.

Aditya Vision is engaged in trading of electronic items and is a service oriented electronic retail chain in Bihar dealing in consumer durables of all kinds.

It has over 10,000 items including digital gadgets, entertainment solutions, cameras, accessories, and home appliances.

Back in 2022, the company ventured into Jharkhand. It currently has over 90 stores across Bihar and parts of Jharkhand.

It is also venturing into more areas, including Chhattisgarh and Bengal. The company houses brands such as LG, Sony, and Samsung in its brick-and-mortar stores.

The company's store count as of March 2024 stands at 145. Its goal is to reach 150 store count by 2025.

The consumer electronics market is still under-penetrated in Tier 3 and Tier 4 cities. With its extensive offline reach, Aditya Vision has tapped into the potential of these untapped markets and is making a mark in the retail sector.

Currently, it's present in 14 out of 75 districts in UP.

For the financial year 2023-24, the company's revenue surged by 32% reaching Rs 17.4 billion (bn).

While net profit increased 20% to Rs 770.7 million (m).

Going forward, the company plans to become a household name and open 25-30 stores every year.

It's also considering listing on NSE soon.

In the past 5 days, the stock price has rallied more than 22%.

#2 Refex Industries

Next on the list is Refex Industries.

It has a significant presence in states of Chhattisgarh, Maharashtra, Madhya Pradesh, Bihar & Karnataka.

The company is a specialist manufacturer and re-filler of refrigerant gases in India, particularly, environmentally acceptable gases that are replacements for chloro-fluoro-carbons (CFCs).

In 2022, it entered the power sector, marking its foray in the solar segment. This segment contributes only around 3% for now, which is expected to go up in the coming years.

Have a look at the table below to see the company's financial performance for the past five years.

Financial Snapshot (2019-2023)

Rs m, consolidated	FY19	FY20	FY21	FY22	FY23
Revenue	4,610.50	6,607.40	6,326.60	4,439.60	16,290.00
Growth (%)	500%	43%	-4%	-30%	267%
Operating profit	301.3	561.4	721.2	628.6	1,750.00
Operating margin (%)	7%	8%	11%	14%	11%
Net profit	316.3	331.3	409.4	453.9	1,160.00
Net profit margin (%)	7%	5%	6%	10%	7%

Source: Ace Equity

As visible from the table above, this is a high growth smallcap. It has reported increasing profit for the past five financial years. In FY23, the company's revenue tripled while net profit shot up by 157%.

The coal and ash handling segment was the major contributor as revenue from this segment came in at Rs 12.9 bn compared to Rs 3.2 bn a year ago.

As of May 2024, the company's order book for ash and coal handling segment stood at around Rs 10 bn and power trading segment stood at Rs 5 bn.

Going forward, the company is expecting a CAGR of 30-40% in ash and coal handling segment.

#3 SIS

SIS is a Bihar based company, directly and indirectly engaged in rendering security and related services.

It's a premier security solutions provider in the Asia-Pacific (APAC) region, encompassing India, Australia, New Zealand, and Singapore.

SIS provides customized AI-enabled intrusion detection and response services to individual homes, small business establishments, retail chains, bank branches, ATMs, offices, and commercial establishments and operates this business under the VProtect brand.

For the financial year 2024, the company reported its highest-ever revenue of Rs 122.6 bn while margins also improved.

Financial Snapshot

Rs m, consolidated	FY20	FY21	FY22	FY23	FY24
Net Sales	84,852	91,273	100,591	113,458	122,610
Growth (%)	20%	8%	10%	13%	8%
Operating Profit	5,735	9,986	5,512	5,243	5,190
OPM (%)	7%	11%	5%	5%	4%
Net Profit	2,255	3,672	3,259	3,465	1,900
Net Margin (%)	3%	4%	3%	3%	2%
ROE (%)	17.4	23.0	16.8	15.9	-
ROCE (%)	18.3	21.1	13.4	11.0	-
Dividend (Rs)	2.0	0.0	0.0	0.0	-
Debt to Equity (x)	0.9	0.7	0.7	0.7	-

Source: Ace Equity

As part of its future plans, the company is looking at niches like elder care.

The company also has plans to demerge and list cash operations and it has already appointed advisors and bankers.

Last month, along with declaring its results, the company's board also approved a stock split and a final dividend of Rs 1 per equity share.

#4 Jeena Sikho

Next on this list is Jeena Sikho.

The company operates large hospitals in Lucknow, Jaipur, and Navi Mumbai. It recently opened the first-of-its-kind 1,000-bed HIIMS hospital in Meerut.

To expand its footprint overseas to serve people across the globe, Jeena Sikho has signed an MoU to open a hospital in Vietnam as well.

The SME company has been making a mark in the industry with market beating performance. For FY24, the company posted a revenue growth of 59% with revenue from hospital segment growing over 120%.

The net profit for FY24 more than doubled to Rs 690 million.

The company has strong growth plans in place. It's targeting a revenue of Rs 4.5 bn next year. The company is also looking to increase bed count to 1,800 by adding 500 new beds.

Jeena Sikho remains optimistic about the future growth potential and aims to become the number one Ayurvedic healthcare company in India.

The stock price has rallied more than 50% in 2024 so far.

#5 V2 Retail

V2 Retail primarily operates in tier-II and tier-III cities, with a chain of "V2 Retail" stores offering apparel and general merchandise.

At present, it has more than 107 retail stores, which mainly sell fashion apparel for men, women and children along with lifestyle products.

The company's presence is primarily concentrated in Uttar Pradesh, Bihar, Odisha, Jharkhand and Assam (24 stores in Bihar).

It has tie-ups with prominent e-commerce players like Amazon and Myntra along with the launch of its e-commerce portal - V2kart - to diversify its sales channel. However, the revenue contribution from these has remained minimal in recent years.

Led by a sustained improvement in the scale due to healthy increase in sales per square foot, the company turned to profit in FY24 and reported its highest ever revenue.

Financial Snapshot

Rs m, consolidated	FY20	FY21	FY22	FY23	FY24
Net Sales	7,012	5,386	6,292	8,389	11,650
Growth (%)	135%	-23%	17%	33%	39%
Operating Profit	799	729	829	921	1,420
OPM (%)	11%	14%	13%	11%	12%
Net Profit	88	-128	-117	-128	310
Net Margin (%)	1%	-2%	-2%	-2%	3%
ROE (%)	2.1	-1.7	-1.5	-1.7	-
ROCE (%)	3.2	-4.7	-4.5	-5.1	-
Dividend (Rs)	0.0	0.0	0.0	0.0	-
Debt to Equity (x)	0.1	0.2	0.2	0.2	-

Source: Ace Equity

This year, the company aims to increase its retail area by more than 30% by expanding its store network through further penetration into its core markets.

The promoters have vast experience in India's retail sector, especially in the value segment of small-town India. As of March 2024, their holding stands at 54.28%.

#6 Globus Spirits

Globus Spirits is present across the entire alcohol value chain.

It was the first to set up a grain distillery and launched branded distiller's dried grains with soluble (DDGS).

It manufactures Indian-made Indian liquor (IMIL), Indian-made foreign liquor (IMFL), and bulk alcohol hand sanitiser and also undertakes bottling for companies.

The company operates five modern and fully integrated grain-based distilleries at Rajasthan, Haryana, West Bengal, Bihar, and Jharkhand.

The company recently invested in a greenfield project to enhance its capacity for ethanol blending.

It is also working on building a portfolio of brands under its premium liquor segment. So far, the company has introduced craft spirits such as Terai, Snosk, and Mountain Oak, which received a good response.

Globus Spirits is also launching new variants of craft gin, whisky, and premium rum to benefit from the demand for premium alcohol.

Coming to its financials, its net revenue for FY24 came in at Rs 24.2 bn, a 15% year-on-year growth.

The company's revenue has grown at a CAGR of 9.3% between 2019-23, driven by high demand of its products. The net profit also grew at a CAGR of 38.8%.

It has also been paying dividends for the last five years, with an average dividend payout and dividend yield of 7.1% and 0.6%, respectively. The promoter holding stands at 51%.

Going forward, the demand for premium liquor and the company's significant presence in bulk and consumer liquor is expected to drive its growth.

In the past 5 days, the stock price has shot up by 12%.

#7 Ahluwalia Contracts

Ahluwalia Contracts is an EPC company, engaged in the business of civil construction activities with five decades of expertise in infrastructure development.

The company's major clients are central and state governments including PSUs, prestigious business house/real estate developers.

The company's projects are present pan India (especially in North, East and South) that diversify regional risks (as compared to regionally or state focused construction companies), allow company to be selective in its bidding, and enhance the opportunity size for the company.

It is executing projects in states like Bihar, Bengal and Orissa which are also the source of labours and allow the company better control.

Some of its top 10 projects include redevelopment of Chhatrapati Shivaji Station (Mumbai), Bihar Animal Science University, Arbour Project DLF (Gurgaon), Tata Memorial Centre (Mumbai), medical colleges at Assam and Haryana, AIIMS Jammu and so on.

The company is also involved in the data centre market. Over the years, it has received orders for building data centres from clients like Adani, Indian Financial Technologies, among others.

For FY24, the company achieved a turnover of Rs 38.6 bn and a net profit of Rs 3.4 bn.

Its total order book stands at Rs 111.8 bn to be executed in the next 2 to 2.5 years.

While keeping minimal debt on the balance sheet and requiring minimal capex for growth, the company is sitting on its highest ever orderbook that offers multi-year revenue profitability.

The company is expecting order inflow of around Rs 70 bn for FY25.

In the past 5 days, the stock price has shot up by 7%.

In Conclusion

Goes without saying that this article was just to provide you with up-to-date information on how political factors can play a key role in deciding the fate of certain companies.

It's essential for investors to focus on the robustness of company fundamentals rather than external factors such as political affiliations.

As we continue to monitor these stocks, we encourage our readers to base investment decisions on thorough analysis and sound financial principles, ensuring that short-term fluctuations influenced by political developments do not overshadow the long-term potential of their investments.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...