Moneycontrol Bureau
Brokerage house JP Morgan feels some mi-companies have started to show improvement in fundamentals though the market is still be convinced about them.
"This comes after a long gap and given the past rather elongated history of disappointments, valuations are still cheap. The market, however, has started to take some notice and is starting to re-rate some of these," said the JP Morgan note to clients.
"Investors in general however are skeptical resulting in reasonable to cheap valuations for most of these," the note said.
Four such stocks JP Morgan is bullish on are Oberoi Realty, Dish TV, Sintex and Cox & Kings.
Excerpts from the JP Morgan note:
Oberoi Realty: After a gap of four years, the company has started launching new projects. New launches have met with incredible response with pre-sales in FY15/16 likely to be 3 times of what it achieved in FY14. As the company moves from being a single project play to a 4-project player over the next 1 year, earnings should likely follow as well.
Dish TV: Subscriber addition growth for the company has picked up. Industry fundamentals have also improved as MSOs are looking to pass through rate hikes to end consumers. DITV also has strong embedded operating leverage given content cost negotiations are locked till 2H16 and likely reduction of license fee by 200bps. The company is also now nearing a profit breakeven finally.
Sintex : Revenue growth for the 9-month ended December (+30 percent) has started to accelerate for the company. Prefab, custom molding and textile businesses are showing positive traction and outlook on monolithic construction is stable at the margin. The company will likely benefit from government initiatives on "Clean India" and CSR activities by corporates.
Cox & Kings: The company has cut its net debt by half by divesting its camping asset and equity raising. India and Education businesses remain on a strong footing wherein revenue growth will likely see acceleration going into FY16E.
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