The cost benefit that cement companies enjoyed (power & fuel as well as freight) seems to be waning. In the absence of broad-based demand revival and valuation still reflecting optimism, investors got to place their bets wisely.
Though valuations of the home textile stocks appear undemanding, investors may consider going long on Himatsingka Seide and Trident given their ability to tackle headwinds better than their peers, good fundamentals, and strong execution competencies.
Most of the companies witnessed strong growth in the topline and expansion in operating margin mirroring the performance of various OEMs
A few well run companies have struggled in the recent past, but their latest quarterly numbers show signs of improvement.
As the mercury rises, some companies can look forward to strong earnings traction in the quarters ahead.
HUL with its high rural exposure (40% of sales) and well entrenched distribution network, is among the key beneficiaries of further uptick in consumption and related policy announcements, in our view.
In the near term, company is on course to increase capacity to 137,000 MT (from 80, 000 MT) involving capex of Rs 50 crore.
Company’s earnings trajectory, range of products offered and the chemical reaction capabilities highlight the increasing non-commoditised nature of the business.
RBL is a part of the Rane Group of companies and is a leading manufacturer and marketer of safety critical friction material.
Even as near-term outlook remains cloudy for housing finance companies, some stocks deserve a closer look.
The company has smartly increased its production across the segments to capitalise on higher international commodity prices. During the recently concluded September quarter, the company reported strong 41% year on year growth in net profit on a sales turnover of Rs 21520 crore-which grew by 37%.
As company undertakes new capacity expansion plans particularly for the new advanced carbon material (Used for Lithium ion battery), it makes for an interesting investment opportunity. Having said that it’s worth noting that Himadri Speciality Chemicals is the only company in India manufacturing anode material for Lithium-Ion battery.
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The OFS is worth participating in light of the attractive valuations it is offering. Interestingly, retail investors will be allotted shares at 3.5 percent discount or at Rs 90.7 per share as against the offer price of Rs 94 a share.
The company, enjoys a near-monopoly in the Indian market and the valuation of the offer at 3.4X post-issue book (1.5X book with fair value change) is in line with global peers and looks reasonable in the context of a steady track record and macro opportunities.
For long term investors looking to play the lucrative theme of financial intermediation, MAS offers steady growth with high quality.
The farm to fork company has stakes in promising segments which we believe are well-positioned to create value in the long term.
While a part of the weakness in results is transitory in nature, higher costs owing to employee benefits could be a new normal in R&D intensive industry.
We have a neutral stance on the company on the back of its underinvestment in the domestic market and tepid capacity expansion
We like the Nestle’s transformational story post the food safety crisis with respect to its key product in India – Maggi. Since then Nestle’s share in instant noodles space has crawled back to the range of 60 percent.
At 18.4x FY19 projected earnings, the company’s fundamentals definitely warrant attention for accumulation.
In its post listing history, FY17 was possibly the worst year for Coal India as the stock got hammered with investors worrying excessively about poor demand, lower coal prices, grade slippages and the huge impact of wage revision.