Mehta Equities has come out with its report on stock ideas for 2012-13.
Mehta Equities has come out with its report on stock ideas for 2012-13.
SpiceJet: Preferred Airline for FDI reforms as and when it happens, because of its operational eficiency, Low cost business model works out to yield more on domestic route and healthy expansion plans to explore international route. A strong recovery in yield in the domestic sector and rationalization of its international route should enable SpiceJet post substantially lower losses in FY13 and strong profits in FY14.
Prozone CSC (PZ): A unique proposition in real estate: Blend of strong B/s, annuity income generating asset, tier-2 cities land bank and a experienced international partner makes Prozone a niche player with virtually a debt free balance sheet. Fully paid land bank of 17.8msf (10.1msf (PZ share) across six tier-2 cities in India, PZ plans to develop 10msf (6msf PZ share) over next 5 years including 1.3msf of retail mall. Well planed project pipeline for next 3 years which would generate healthy cash flow. • CSC’s partnership adds a lot of credibility to the company’s bandwidth and governed business approach Capital Store Centers (CSC) is one of the UK’s most valuable retail asset owners. The company operates 10 of the 25 large retail assets in UK and is valued at ~ 3bn pounds.
Omkar Speciality Chemicals: Expansion inline with expectation: Increasing capacity from 1700 mtpa in FY12 and plans to further increase to 6250 mtpa by FY14 through Brownfield expansion. In addition, the company plans to ramp up the capacity at the sites of Urdhwa Chemicals Private Ltd and Lasa Labs. Exports revenue to boost in FY13 earnings from new products: Omkar Speciality has started focusing more on export oriented segment and planed to launch about 5-6 new molecules during FY12-13.
OnMobile Global: VAS value chain business model: OMGL it is the number one RBT service provider in the world. We believe interactive voice response system and speech recognition technology that OMGL is providing has good scope in utility VAS services. OMGL has already got all the four large operators in India to sign up for its video technology and expects video services to start showing positive results in the next 1-2years period.
Innovative Industries: Innovative has turn out to be one of the emerging leaders in the precision tube industry. Its plan to shift focus to higher margin segments such as Tubes and OCTG would give it an edge over its peers and the recent acquisition helped to reach new heights in global markets. IIL has received a patent for its ‘Cold Pilgering’ technology for a period of 20 years w.e.f April 24, 2009, also IIL has filed for two more new patents. Pilgering process saves cost of power by 80% whereas wastage cost by 7% which would make IIL competitive in pricing & improve its overall profitability.
Heritage Foods: One stop shop for daily needs through its various verticals. This integrated business model which includes farming, processing ,retailing ,baking and diary - Heritage is a company with no comparable listed players. Market leader in Andhra Pradesh, with nearly 14% market share, Heritage Foods is well placed to reap benefits of the secular growth in the under-penetrated milk business, which is growing at a CAGR of 17.3% and commanding a strong brand name in south Indian market.
MCX India: Ready to flag off new equity segment: Newly recognized equity trading platform, MCXStock Exchange (MCX-SX), is set to kick start trading in around 1,000 companies’ shares on November / December 2012 with around 700 members registered as of now. Leadership position: MCX has held on to its market leadership position, with a share of 82- 87% over FY09-12. Supply of technology platform by its parent, Financial Technologies, one of the leading developers of exchange related software and technology, gives MCX a competitive edge that is difficult to replicate
Tech Mahindra; Largest IT solution provider to telecom industry: With its global footprint and presence in more than 31 countries, Tech Mahindra is the largest IT solution provider to global telecommunication companies. As per the latest Voice & Data magazine’s Annual Survey, it leads Indian telecom software services market in FY 12 with 20.9 % market share. Acquisition like Satyam & Comviva will provide business synergies, diversification & scalability. With this Tech Mahindra stands to become leading telecom support service provider in India.
Axis Bank, with its large deposit base and fee income, may be among the private banks best placed to thrive in a rising interest rate scenario. Axis Bank has increased its CASA market share multi-fold over the past nine years (4.6% as of FY2012) on the back of robust branch and ATM expansion. It has opened 400 branches in 2011 & 230 in 2012. Expect an annual addition of 250+branches would lead to a 30-50bp increment in CASA market share every year.
Bata India: Strong Brand recall: Bata being among the oldest shoe company in the country has a strong brand recall and is the most trusted name in the branded footwear segment. Real estate Value: Developing 260 acre land in Batanagar in JV with Calcutta Metropolitan which is expected to be completed by 2013 and would further unlock value of Bata India.
Sterlite Industries: Parent restructuring exercise to trigger: The UK-based Vedanta Resources Plc will merge its Indian firms- Sesa Goa and Sterlite Industries- into a single entity Sesa Sterlite Under the merger, three Sesa Goa shares will be issued for five Sterlite shares. Post merger, the combined entity Sesa Sterlite would offer investors best in class resource diversification with top quality assets in zinc and oil. Additional Value to be added through Cairn India: Cairn India would become subsidiary of Sesa Sterlite with effective stake of 58.9%.
Maruti Suzuki India: Increased focus on diesel version to lead future growth: India is a price sensitive market and the sudden upturn in the prices of petrol has soared up the sales volume of diesel variants small cars in the country. In the first half of the current fiscal, the auto makers of the country has seen the diesel to petrol ratio go up from 60:40 to 85:15.
Indraprastha Gas: Robust business model, dominant position in the market and a rapid pace of expansion gives IGL an edge in the market. CNG run vehicles growing at CAGR of 32 % in last 5 years - Buses, Autos, RTV, and Cars/Taxi are main users of CNG. Their number has grown at CAGR of 32 % in the last 5 years. IGL being the sole CNG supplier in Delhi and NCR is benefiting from this demand.
Shasun Pharmaceuticals: Active presence in CRAMS in both API as well as the formulations businesses creates a huge opportunity for it to increase and diversify its revenue base. In addition, the company has several other APIs under development for products, which would turn generic in the next three to five years. Setting up its Greenfield facility in Vizag will enable Shasun Pharma to generate sustainable cash flows over the coming years. Shasun Pharma’s top line grew by 29 percent in FY12. Further Bottom line increase by 102 percent as compared to FY11.
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