Dolat Cap handpicks 14 stocks for investment in dull market

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26 Aug, 2025 12:21

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Dolat Capital has come out with its report on sectors. According to research firm one can buy Hero Motocorp, M&M, Berger Paints, Pidilite Industries, ICICI Bank and HDFC Bank.

• The Indian market predominantly favours 100cc motorcycles; almost75% of total sales belong to this category. Splendor and Passion continue to drive HMC’s sales, contributing 45% to volumes. After splitting from Honda, these brands will remain a part of the Hero Group. In its 2012 annual report, Hero Honda’s total distribution network in the country (including dealers, sales and service network) numbered 5,100, covering over 100,000 villages. Hero Honda currently sells around 36,000 scooters a month. With only one model, it is already the second largest player in this segment also. It has recently launched ‘Maestro’ to appeal to the male segment.
• Hero currently exports ~200,000 motorcycles a year compared to Bajaj Auto’s 100,000 a month. Bajaj Auto’s offering in global markets is a value proposition (US$500-600/motorcyle). With the split, the company would not find it difficult to match Bajaj’s offering, in turn boosting its volumes. The company is sprucing up its sales network in the export markets. All exports to international markets will be made under the brand name ‘Hero’. More emphasis is being laid on existing export markets. Several countries have been identified in Africa, Latin and Central America as potential international markets. We expect revenue to grow at a CAGR of 11% and PAT at 12% over FY12- 14. The stock currently trades at 12.9xFY14E. We recommend buy. 

• We remain bullish on M&M as it continues to post robust growth. With launches (Yuvraaj, the new SUV, GIO, Maxximo and Mahindra Navistar trucks) and newmarkets, we expect the growth momentum to continue
• The company expects tractor sales to slow-down a bit in FY13. We expect thetractor segment to grow at a CAGR of 8-10% over FY12-14. Our theory is basedon macro factors such as shortage of labour due to successful implementationof government scheme (NREGS), stable MSP bringing in higher rural income,higher cash sales (tractor financing now only ~75% of total sales compared to~92% last year).

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