Honda Siel Power
By: CJ George, MD, Geojit BNP Paribas Financial Services
CMP: 263
1Yr Return: 75% P/E: -45.0
Market Cap: Rs 267 crore
Production is on in full swing at Honda Siel Power’s Greater Noida plant, as part of its parent company’s bigger game plans for India. Consolidation of component making and assembly operations at one place is expected to save costs considerably, thereby boosting profitability margins. Current market price of Rs 250 is backed by Rs 160 cash surplus per share and Rs 45 cash earnings per share for FY11.
TTK Healthcare
By: CJ George, MD, Geojit BNP Paribas Financial Services
CMP: Rs 237
1Yr Return: 235% P/E: 20.7
Market Cap: Rs 192 crore
TTK Healthcare is into niche businesses in pharma, FMCG, foods, medical devices etc. It is also working on development of coronary stent, vascular graft and stent graft for thoracic aortic aneurysm and abdominal aortic aneurysm repair. In the coming years, medical devices business will grow at a faster rate with an operating profit margin of 45%.
Wipro
By: Nirmal Jain, CMD, India Infoline
CMP: Rs 694
1Yr Return: 199% P/E: 25.4
Market Cap: Rs 1,01,841 crore
Wipro’s focus on cost control has helped it improve its operating margins. The company has diversified its pricing model the most over the past one-year. Contribution from fixed price projects is up almost 10 percentage points YoY. In fact, its onsite realisations are around 5% better than Infosys. Also, better integration among its diversified service offerings are enabling it to win large multi-service deals.
M&M
By: Nirmal Jain, CMD, India Infoline
CMP: Rs 1,061
1Yr Return: 281% P/E: 19
Market Cap: Rs 29,712 crore
M&M is perhaps the only player in the auto industry that does not face any significant competitive threat in its core business of tractors from foreign auto-makers. The Centre’s thrust on the rural economy and the rise in outlay of capital has increased the tractor demand. We see tractor industry volumes growing above 15% this year and maintain a double-digit growth for the next two years.
GVK Power & Infra
By: Anup Bagchi, ED, ICICI Securities
CMP: Rs 48
1Yr Return: 108% P/E: 432.3
Market Cap: Rs 7,509 crore
GVK Power & Infra is gaining momentum in all its operational verticals. It is now managing two major airports (Mumbai & Bangalore) in the emerging aviation space, thereby controlling around 29% market share of the aviation passenger segment. The power business is expected to drive operational performance in the medium term on the back of overall generation capacity of around 900 MW.
Indian Hotels
By: Anup Bagchi, ED, ICICI Securities
CMP: Rs 96.4
1Yr Return: 109.6% P/E: 46.4
Market Cap: Rs 6,974 crore
Improving GDP outlook, rising confidence in economic prospects and the ‘Incredible India’ campaign have improved the industry outlook. With travel and tourism demand expected to grow at 8.2% a year in the next 10 years, Indian Hotels is well poised to reap this benefit through addition of around 3,000 rooms across segments over the next two years.
NCC
By: Motilal Oswal, CMD, Motilal Oswal Financial Services
CMP: Rs 165
1Yr Return: 139% P/E: 27.2
Market Cap: Rs 4,256 crore
NCC has a strong order book of four times its revenues, and has the potential to grow its earnings at a 33% CAGR over FY09-11. With the Centre giving a strong focus on infra, NCC’s business opportunities will rise manifold. It will witness a significant order intake on the road construction in the next 12 months. Margins will rise due to operating leverage and we also expect working capital ratios to rise.
Sintex Industries
By: Motilal Oswal, CMD, Motilal Oswal Financial Services
CMP: Rs 256
1Yr Return: 34% P/E: 14
Market Cap: Rs 3,502 crore
The worst is over for Sintex and earnings growth is expected to be 30% through FY12, with a return on equity of over 18%. The global economy is recovering from deep recession and Sintex’s overseas units — Nief (France) and Wausaukee (US)— are doing well. Monolithic construction (22% of FY10 sales) has a healthy order book of Rs 1,800 crore, and should grow 60% in FY10 and FY11.
Axis Bank
By: Dinesh Thakkar , CMD, Angel Broking
CMP: Rs 987
1Yr Return: 102% P/E: 18.3
Market Cap: Rs 39,802 crore
Axis bank has raised substantial equity capital to fund growth plans and is poised for market share gains as GDP and capital market activity revives. The banking sector has the potential to grow at a CAGR of 18-20%, and Axis Bank has the ability to grow at least 5% faster than the industry. NPA concerns are receding and could provide upside to the market’s earnings estimates.
