Investment idea

21-05-2015 UPDATE

Falling inflation and reversal in crude prices has increased the possibility of cut in the benchmark rates in the next Policy Meet by RBI. This is in spite of the risk of poor monsoon and pick up in the Crude prices.

 

We released a list of stocks on 13^th of the month to take advantage off in both Short Term and Medium Term ahead of the policy meet. The basket of stocks has potential to deliver a return of 8-12% in foreseeable future……REITERATE BUY

 

Investment Strategy- Short Term - Medium Term BUYs - Potential upside 8-12% in near term

 

 

Initiated Date	Stocks	Reco Price.	CMP	% Change
13-May-15	EICHER MOTORS LTD	17829	18425.0	3.3%
13-May-15	MARUTI SUZUKI INDIA LTD.	3621	3705.5	2.3%
13-May-15	LARSEN & TOUBRO LTD.	1594	1632.7	2.5%
13-May-15	SUN PHARMACEUTICALS IND.	957	980.7	2.5%
13-May-15	YES BANK LIMITED	844	860.2	1.9%
13-May-15	BLUE DART EXPRESS LTD	6556	6640.0	1.3%
13-May-15	GUJARAT PIPAVAV PORT LTD	216	227.0	5.1%
13-May-15	KANSAI NEROLAC PAINTS LTD	223	216.4	-3.0%
13-May-15	GABRIEL INDIA LTD	80	85.6	6.5%
		Average Return		2.5%

Short Term - Medium Term BUYs - Potential upside 8-12% in near term

 

Who says things @ ground level are not improving. While there is a section of market which is struggling on a/c of high debt/ slow govt decision making in the space in which they operate, there is yet another group of companies which are reporting stellar results oblivious of the things around. Lower debt or improving landscape in the area they operate in or MOAT(Competitive Advantage) they enjoy has helped them move from strength to strength. Suggest take advantage of current correction and buy them for Short to Medium Term Delivery  

1)     Eicher (CMP 17829.0) – RE continues to be the main earnings driver for Eicher. In 4QFY15, its sales volume increased by 45% YoY to 93000 units. OB remains @ 4-5 months. Next leg of growth will be driven by international market. Towards that end has acquired a design Co in UK.  Co is developing 2 new platforms for RE (both for global market), which will be in the range of 250-750 cc. Commercial vehicle portfolio for Eicher continues to do well and will get further boost from launch of Pro Series range (heavy duty trucks with 2x fuel efficiency). Currently trading at FY16E and FY17E P/E of 28.4x and 21.9x resp.

2)     Maruti (CMP 3620.5) – Largest passenger vehicle player in India with market share of 45%. Posted fantastic 4QFY15 results with expansion in EBITDA margin of 270 bps YoY to 15.9% (highest in 7Y). We xpct mkt share to further increase in FY16, led by a strong model pipeline and low competitive intensity in small cars. With the success of Ertiga and Ciaz, Co has started gaining ground in high priced sedan segment. Xpct domestic volumes to growth of double digit on an 8% industry growth. Currently trading at FY16E and FY17E P/E of 20.6x and 15.8x resp. 

3)     LT (CMP 1593.5) – It is the proxy to the India’s capex cycle & best way to play the India’s infrastructure boom. Strong BS, robust order book and easing of interest rate cycle is likely to lead to strong earnings growth going forward. Recent defense orders and tie-up with Areva for power further strengthen the investment case.

4)     Sun Pharma (CMP 956.5) – Sun Pharma's strong presence in chronic space for domestic business, significant ANDA pipeline in the US post Ranbaxy acquisition (with a pipeline of 184 ANDAs including high-value FTFs) and robust growth in Taro sales reflected in consistent performance and better margin and return profile. The merged entity has become 5th largest global specialty generic pharma company, have operations in 65 nations, 47 manufacturing facilities across 5 continents

5)     Yes Bank (CMP 844.2) – It is a major beneficiary of fall in interest rate as it relies heavily on bulk deposits. Besides, the bank is mobilizing strong CASA and retail deposits which shall provide granularity and keep its cost of fund under check. Its NIM is set to improve from 3.2% now to 3.5% by FY17E which shall support 25%+ PAT growth for next couple of years. 

6)     Blue Dart (CMP 6555.5) – Co reported 43% growth in EBIDTA in Q4. E-Com business is expected to have growth by 75% in Q4 taking it’s share in overall business to 25%. E-Com to be focus area in foreseeable future. Rolling out 40 E-fulfilment centres starting Q1FY16 for E Com companies. Adding a 7^th aircraft to it’s fleet. Enjoys mkt share of 53% in the air express delivery, and is a fast emerging formidable player in the road segment (market share of 17%)

7)     GPPL (CMP 216.0) – One of the best plays in the private port space. Coal prices have reached lows of $60 which augurs well as coal volumes are likely to catch up. Dollar has also strengthened which is likely to boost its realizations. Ramp up in liquid volumes will further boost the margin of the company and in turn boost profitability

8)     Kansai (CMP 223.0) – One of the largest paint suppliers to the Indian automotive sector. Outlook on PV finally seems to be on the improving trend led by better consumer sentiment and ‘pent-up’ demand. The sentiments will get further boost from likely decline in interest rates and moderation in domestic fuel prices, leading to lower cost of ownership and cost of running the vehicle. Lower Crude prices help co report 34% growth in bottomline in Q4. Margins likely to sustain. At CMP, the company is trading at P/E of 31.2x and 24.3x FY16E and FY17E earnings resp.

9)     Gabriel (CMP 80.4) – Part of Anand Group, is one of the major player in Shock Absorbers & Ride Control segment. A balanced and a diversified portfolio from segment, customer concentration, geography perspective. With good presence in both OEM and aftermarket, Gabriel is now looking to grow its export portfolio. At the CMP of 78, valuations are not demanding and we can expect a decent upside  

WHAT EVER YOU EARN FROM MY CALLS PLEASE GIVE 10% PROFIT'S FOOD TO COWS AND DOGS HELP THM GOD WILL HELP YOU-!!!