Category Archives: Stock Market

Multibagger Stock – Havells India

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HAVELLS INDIA:

Havells India is an Electrical Equipment Industry founded in1958 in New Dehi by Qimat Roy Gupta now it working Nodia as Head quarters.

It’s traditional category of products Industrial & domestic circuit protection switchgear, cables & wires, motors, fans, power capacitors, compact fluorescent lamps (CFL), luminaries for domestic, commercial & industrial applications, modular switches covering household, commercial and industrial electrical needs, water heater and domestic appliances.

Havells India is having 12 manufacturing plants in India are located at Haridwar, Baddi, Noida, Faridabad, Alwar, Neemrana, and 6 manufacturing plants are located across Europe, Latin America & Africa. It has a 20,000 strong global distribution network.

Havells India has registered decent numbers for the quarter ending September 2012. The revenue for the September 2012 quarter is pegged at Rs.964.22 crore; about 13% up against Rs.850.39 crores recorded during the year-ago period; despite degrowth in industrial cable division without which growth in revenue is 24%. In service profit remained flat at Rs.119.16 crores due to higher advertisement and sales promotion expenses. The advertisement cost was Rs.34.8 crores in Q2FY13 as compared to Rs.14.2 crores in Q2FY12. The net profit reported a growth of about 24% to Rs.86.97 crores from Rs.70.24 crores.

The Revenues from the switchgear business grew 15% at Rs.255.12 crores as against Rs.221.77 crores y-o-y.

The Industrial cable division registered a decline of 16% on a y-o-y basis due to slower industrial and commercial activities.

The Domestic cable has registered a growth of 42%. Collectively cable division has grown by 6% during the quarter.

The Revenues from Lighting & Fixtures business climbed 14% on a y-o-y basis at Rs.156.11 crores.

The Electrical Consumer Durables revenues jumped sharply by 33% at Rs.162.34 crores on a yearly basis.

The Company is trading at an attractive valuation at 19.93x and 16.42x of FY13EPS of Rs.33.78 and FY14EPS of Rs.40.99

We Bet to Grab the Share around 630 for Target 800 in Time Period of 6-9 Months.

Best Investment Options in India

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Stock Market Investment in India

Best Investment Options in IndiaBeing one of the rapidly growing economies in Asia and the world, investors from all over the world should consider investing in the Indian stock market. If you want to participate in India’s stock market investment, you must trade at the NSE (National Stock Exchange) or BSE (Bombay Stock Exchange). The trading mechanism at the NSE and BSE is the same; it is done through a limit order book whereby the matching of orders is electronically done by a computer.

When/why should you invest in stock?

There are many questions from traders about when to invest in stock and why to invest in stocks. The answer to the question of when to invest in stock is now. The answer to the question why to invest in stock is because of the good returns.

Why invest in India stock market and any other?

The reason why you should choose the Indian stock market investment is that there are no specialists or market makers. The entire process of trading is driven by orders – meaning that the market orders which the investors place are automatically matched with the best possible orders of limit. In consequence, the sellers and buyers in the Indian stock market investment remain anonymous. Orders in the system of trading are placed through stock brokers. The stock brokers provide vital stock market tips for local and foreign investors in India. The institutional investors can invest through the DMA (Direct Market Access) option whereby they use terminals of trading (which are usually provided by the brokers) for direct placing of orders in the Indian stock market.

Futures and Options Trading

What is future & option trading? In simple words, a futures contract refers to one whereby one undertakes to take or make the delivery of a certain productat a future date at a price that is set out and determined at the present. In the formal futures trading in India, there are standardized agreements that specify the quantity, price, and time of delivery. In the past, futures trading was about agricultural products. These days, various products such as currencies, precious metals, and stock indices can be traded on options and futures. Options are similar to insurance; the buyer of the option pays premiums to the seller of options for the right of buying or selling of a futures contract at price that is specified. Like insurance, the buyer of options can choose to exercise or not to exercise his or her rights.

How the investment in futures and options can give good returns compare to other investments

There are two main reasons for the existence of the markets of options and futures in India, namely price discovery and risk transfer. The losses or gains in the trading of futures are dependent on changes in prices. After selling futures contracts, you will realize profits if there is a fall of prices. For a buyer of a futures contract, an increase in prices will lead to profit. To realize profit on trade in futures, you can buy low first and sell high later, or make a reversal of the order and sell at a high price and then buy at a low price.

Commodity Exchange

One of the vital stock market tips to all investors is that they should invest in commodities. Commodities are the best option for those investors who are interested in diversifying their portfolios of investment beyond real estate, bonds and shares. The commodities being talked about here are silver, gold, crude oil and even oilseeds in the market of futures.

How does commodity exchange trading work?

Will the prices of gold increase? Will the prices of crude oil decrease? Because of the prevailing drought, will the prices of soya beans increase? If you have reasonable grounds to believe that any or all these predications can turn true, and you are prepared to bet some money on them you should try doing so in the commodity futures market. This is how the commodity futures market works.

Why invest in commodities?

Compared to the stocks, commodities trading is cheaper because the margins are significantly lower as compared to stock futures. The brokerage is also lower in the commodity futures. Because of this reason, commodity exchange is the best choice for those investors who love speculating about the future happenings in the market.

Conclusion

There are various options of investments which offer different rates of return. There are various risks associated with such investments which you need to be aware of before you make any investment decision. Whether you are a beginner or novice trader, it is good to sign up for equity and commodity advisory services when to invest in stock and other vital stock market tips that will help you stay informed about the latest happenings in the market to make a wise investment decision

Commodity Market Weekly Out Look 07-11 January’2013

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Gold Weekly View

Gold’s fastest run of weekly loss 42 Days since 2004. Despite the US fiscal cliff deal struck to avert the automatic tax hike, a sudden comment from the Fed official about the end of asset purchase triggered terror selling in gold. Week ahead, it is quite tough to decide the trend of gold as the market dynamics is little dubious. Whereas the US debt ceiling is hanging over the head and threat for a probable US rating down gradation should support gold’s upswing, fundamental of gold seems weak. in addition, according to our expectation of a rise in unemployment rate (from 7.7% to 7.8%) may refrain Fed from stopping asset purchase. But all these are time taking phenomenon which all may not work for the very next week. Basically, inventories at the COMEX warehouses have increased slightly by 0.08%. Interestingly, registered stocks (approved and allocated for delivery) have declined by 12.70%, highest since January 2012. This indicates, traders are not willing to take delivery at present moment on anticipation for a further price fall. On the other hand, eligible stocks (it is saleable at some price) have increased by 4.05%, highest in the same period. This resource, suppliers have nothing better to do with the stocks as the premiums are not high outside, meaning demand is low. Fortune in the ETPs backed by gold have declined by 10.2 tons in a single day to 2620.9 tons while ETF holdings by the SPDR declined by 0.65% on weekly basis to 1342.10 tons. These indicate investment demand is also poor at present. According to the CFTC, although the longs have outpaced shorts by 148,520 contracts, net long position decreased by 1.05% while net short position reduced by a mere 0.40%. This indicates that the shorts are still intact whereas long traders are reducing their bets on price rise. However the above factors are indicating weakness in gold to persist, we need to check the Economic releases which indicate gold may rebound. With immediate support lying at $1638 and then $1630, we might see pullback in prices towards the week end eyeing the ECB meet. Via that time, updates on the US budget ceiling should also be keenly observed.

This week MCX Gold prices should find Support at 30600.00. Trading consistently below 30600.00 would extend the current fall towards the strong support at 30400.00 Major support is at 29000.00-29100.00. Resistance is observed at 31200.00. Trading consistently above 31200.00 would lead towards strong resistance at 31500.00-31600.00. Major resistance is at 32470.00

Silver Weekly View

Week in advance, Silver again seems bearish. Inventories at the COMEX warehouses have increased by 1.17% on weekly basis. Registered silver stocks declined by 3.87% while the eligible silver stocks increased by 3.19%. This point out weak demand for silver. According to the CFTC data, although the speculative long outpaced shorts by 29,188 contracts, total long position fell by 3.35% while total shorts increased by 1.41%. This indicates bearishness is still intact in speculative traders. So, silver should remain weak. On the other hand, as discussed in the Economic releases news on the US budget ceiling and threat of down gradation should be observed. Several such threatening coming from the rating agencies would be supportive for silver. Technically however, silver seems to remain bearish for the week ahead. For this reason, we recommend staying short for t he metal from higher levels.

This week we expect MCX Silver prices to find support around 56500.00. Trading consistently below 56500.00 would extend the current fall towards major support at 55000.00–54000.00. Resistance is now observed at 59500.00. Trading consistently above 59500.00 would lead towards the strong

Resistance at 62000.00. Major resistance at 66100.00

Copper Weekly View:

Copper remained feeble after the minutes of FOMC however better US and Chinese data releases supported prices to gain 2.51% at LME. Higher deliver and rising dollar may continue to act as a negative catalyst for prices in the coming days coupled with highest stockpiling since last 8 months in China. Supplementary, next week markets are likely to eye the developments of ECB and BOE rate decision. Both the European central banks are likely to maintain soft stance and this may continue to support gains in copper.

This week we expect MCX Copper prices to find support around 444.00. Trading consistently below 444.00 would take the prices towards strong support at 438.00 Major supports now seen at 420.00. Resistance is now observed at 458.00. Trading consistently above 458.00 levels would extend the current rally towards strong resistance at 464.00-466.00 Above 466.00 Copper would be trading at fresh highs and can find resistance around 475.00-480.00

Crude Weekly View:

This week we expect oil prices to continue its upside move. Nevertheless, there are few factors which might restrict the gains before weekend. This week is expected to begin with concern on supply bottle neck in Middle East region as U.S. troops arrived in Turkey on last Friday to man Patriot missile defense batteries near the Syrian border. This exploit arrived as the Syria launched Scud missiles at cities near the Turkish border. In response, the U.S., Germany and the Netherlands have deployed Patriot air defense missiles to the border region to examine any Syrian ballistic missiles. Despite the fact that Syria is not a largest oil producer of the World, it is the major strategic point of oil delivery in Middle East region. For this reason, disturbances in the region will fuel oil prices further high. Starting Venezuela President Hugo Chavez is fighting for life which is creating uncertainty of oil industries in the US third largest oil supplier. Secondly, Enterprise Products Partners LP and Enbridge Inc have said on yesterday that Seaway pipeline expansion is going complete in approaching week. U-turn of this pipeline with capacity of delivering 400000 barrels from Cushing to Texas will remove the supply glut in the US major WTI oil delivery centre. Consequently, oil prices are likely to take positive cues from this factor. From economic data front, major releases in the form of lower trade deficit, declining consumer credit may show a positive sign of improving US economy. Increase in major confidence numbers of the Euro-zone are expected to prove supportive for oil prices on expectation of increasing fuel demand. The majority importantly, the ECB and UK are likely to keep the interest rate unchanged and may come up with some ease program in order to support the economy. On the other hand, we have to see the demand front of the largest oil consumer the US. Gasoline stocks rose by 2.5 million barrels last week, capping a five-week build of near 22.5 million barrels. Equally distillates stocks climbed above last 12 weeks high whereas demand in current winter declined by more than 14 percent. Stipulate for the gasoline is down 3 percent from the same period of 2011. Mounting domestic production at 6.9mb/day has pushed down the import by more than 10% in the last week. Enormous fall in distillates demand indicates demand for heating oil has fallen due to warm weather condition. Seeing that per MDA weather service meteorologist, weather is likely to remain warm in the coming week which may not drive higher demand. So, we anticipate further fall or slower pace of rise in refinery utilization whereas stocks may rise higher which will ultimately have negative impact on price. Looking at the above factors we deem oil should continue to remain on upside trend ahead of actual inventory report release in Wednesday night. Nonetheless, ECB interest rate declaration may limit fall in prices. Hence, we put forward remaining on buying side for this week.

This Week MCX Crude prices can find support at 5040.00. Trading consistently below 5040.00 would take the prices towards strong support at 4950.00 Major supports seen at 4800.00. Resistance is now observed at 5200.00. Trading consistently above 5200.00 would extend the current rally towards

Strong resistance at 5270.00 and then finally towards the major resistance at 5500.00.

Mentha Oil Weekly View:

Mentha oil prices are predictable to continue the down trend in this week. Current weak fundamentals amid lack of demand from exporters might create pressure on mentha prices on higher level. According to trade sources, local demand from pharmaceutical sector in small amount would support mentha oil prices to recover during the week. Nevertheless, anticipation of fall in demand due to ban on tobacco products in 19th states in India might keep overall sentiments down. Odisha is having the largest number of gutkha and paan masala consumers. Hence, ban on these products in Odisha might have negative impact on mentha consumption indirectly. Gutkha ban has serious implication for Odisha as the annual health survey (AHS) 2011 found the state having highest percentage with 38% of tobacco chewers among the nine surveyed states. On a daily basis arrivals in UP are hovering in the range of 100-200 drums across the major spot markets. According to trade sources, uncertain movement in mentha prices due to heavy speculation by big players might keep prices volatile during the week.

MCX Weekly Commodity Recommendations:

CRUDE OIL MCX JAN BUY NEAR 5070-5040 SL 4950 TARGET 5150-5210.

GOLD MCX FEB SELL AT 30950-31000 SL 31200 TARGET 30750-30600 {Or} SELL BELOW 30600 SL 30840 TARGET 30450-30300.

SILVER MCX MAR SELL AT 58500-58700 SL TARGET 57400-56800.

COPPER MCX FEB BUY AT 445-447 SL 438 TARGET 457.

MENTHA OIL MCX JAN SELL AT 1425-1430 SL 1465 TARGET 1375-1350.

Fiscal Cliff

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 Fiscal Cliff

  • In the United States, the “fiscal cliff” refers to the economic effects that could result from tax increases, spending cuts and a corresponding reduction in the US budget deficit beginning in 2013 if existing laws remain unchanged. The deficit – the difference between what the governments takes in and what it spends – is projected to be reduced by roughly half in 2013.
  • Fiscal Cliff means there is a limit over which government can borrow, once the limit is breached automatic reduction in government spending and tax increases come in effect.
  • So Basically Fiscal Cliff is an increase in taxes & reduction in government spending
  • On or around Jan. 1, about $500 billion in tax increases and $200 billion in spending cuts are scheduled to take effect. That’s equal to about four percent of GDP and can bring US economy back into recession.
  • So to avoid such disaster  US Senate will be working on Sunday ie 30th December which has happened only 18 times since 1880. If Senate is unable to come to a viable solution and fiscal cliff limits is crossed consequences will be dire as mentioned below:
  • Taxes would rise for nearly every taxpayer and many businesses.
  • Financing for most federal programs, military and domestic, would be cut.
  • More than $500 billion equals roughly 3 percent to 4 percent of gross domestic product.
  • An emergency unemployment-compensation program is expiring, which would save $26 billion but end payments to millions of Americans who remain jobless and have exhausted state benefits.
  • Medicare payments to doctors would be reduced 27 percent, or $11 billion
  • The biggest cut would be $65 billion, enacted across the board for most federal programs over the last nine months of fiscal year 2013, from January through September.

Know how the US avoids falling off the cliff?

  • Democrats and Republicans have come up with rival plans to avert the crisis. In terms of cutting the US deficit, they vary by hundreds of billions of dollars over a 10-year period.
  • President Obama wants the borrowing limit increased and raised taxes on high earners as part of any deal, but Republicans have demanded concessions such as government spending cuts.
  • Only Congress, which is controlled by the Republicans, can raise the borrowing limit. It can also still act within the next month to minimize the impact of the fiscal cliff.
  • Meanwhile, the US government has signaled it’s ready to take extraordinary measures to prevent it defaulting on its debt, but it’s unclear how much time those would buy.
  • So to avoid such disaster  US Senate will be working on Sunday ie 30th December which has happened only 18 times since 1880.

Multibagger Stock – Colgate-Palmolive (India) Ltd.

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Multibagger Stock - Colgate-Palmolive (India) LtdColpal:

  • Colgate-Palmolive (India) Ltd was incorporated in the year 1937. In the year 1983, the company introduced their successful product Colgate Plus toothbrush in the market. In the year 1988, CPIL received a license for producing 24,000 tonnes per annum of fatty acids.
  • They also registered with DGTD for production of 30,000 tonnes of toilet soap per annum. In June 1988, the company established a wholly owned subsidiary at Hetanda in Nepal to manufacture the toothpaste and tooth powder initially.
  • In the year 1991, the company launched new Colgate Gel Toothpaste, Palmolive Extra Care and new Palmolive soap. They also re-launched a high quality Colgate Plus and other toothbrushes.
  • In the year 1994, the company acquired the oral hygiene business of Hindustan Ciba-Geigy Ltd.
  • In the year 1996, the company introduced the Colgate fresh stripe toothpaste and Palmolive naturals soap in personal care products segments, Keratin Treatment Shampoo and Palmolive optima in Hair care segment. Also, they established a modern facility at Aurangabad to manufacture Dicalcium phosphate, a key ingredient for toothpaste.
  • In the year 1998, the company launched Colgate Double Protection toothpaste for the entire family.
  • They launched the ad campaign for their new product Colgate Double Protection toothpaste in competition with rival brand Pepsodent from the Hindustan Lever stable. In the year 1999
  • In the year 2000, the company introduced two new variants to their Palmolive Naturals soap range and revitalised their sandalwood soap. Also, they launched two new variants in their Palmolive Naturals range of beauty soap lime and milk cream. The company re-launched their Colgate Gel as Colgate Fresh Energy Gel. During the year
  • During the year 2000-01, the company launched Colgate Herbal Toothpaste, Economy Toothpaste, Colgate Zig Zag Toothbrush, Colgate Navigator Toothbrush and Transparent Skin Care Soap in the year market
  • During the year 2001-02, the company re-launched Colgate Fresh Energy Gel with a refreshing falvour in a unique first-of-its king transparent tube and economy toothpaste
  • During the year 2003-04, the company launched Colgate Herbal White striped toothpaste with lemon extracts, eucalyptus and mint. They launched Colgate Navigator Plus Toothbrush in the market.
  • During the year 2004-05, the company established a state-of-the-art additional toothpaste manufacturing facility at Baddi, Himachal Pradesh to meet the growing market demand. The first phase of the facility became operational in April, 2005
  • During the year 2005-06, the company established Oral Care Category Innovation Centre works closely with the Technology Centres in India and U.S.A. to shape ideas into products that meet today’s consumer needs. They launched Colgate Advanced Whitening, Colgate Active Salt, Colgate MaxFresh Gel and Colgate Super Flexible Toothbrush with Unique Tongue Cleaning Feature
  • During the year 2009-10, the company acquired the remaining 25% shareholdings in Professional Oral Care Products Pvt Ltd and CC Health Care Products Pvt Ltd at a total consideration of Rs 2.40 crore and Rs 69.07 lakh respectively
  • In June 2011, Essel Propack Ltd signed a long-term agreement with the company to set up a plant in Goa at an investment of Rs 400 million.
  • The toothpaste volume market share has increased to 54.3% (Jan’12 – Sept’12) as against 52.3% for the same period of the previous year with strong volume growth of 11% through its flagship brands “Colgate Dental Cream”, “Colgate Active Salt”, “Colgate Total” , “Colgate Max Fresh”, its highest since 1998, a rare instance of a market leader gaining new ground. The Company has also registered a strong growth momentum in the toothbrush category with volume market share of 39.0% (Jan’12-Sept’12) The Mouthwash category continues its growth momentum with market share at 26.8% (Jan’12-Sept’12)
  • The Company has posted the revenue for the Q2FY13 at Rs.773.77 crore. The YoY growth is 17.73% and the QoQ growth is 5.12%. However, growth in underlying volumes has moderated from an average 13 per cent in the earlier quarters to 11 per cent in the Q1FY13. Colgate-Palmolive (India) net profit rose 45.55% to Rs 145.08 crore in the Q2FY13 as against Rs 99.68 crore during the Q2FY12. Operating margin is at 22.18% as against Q1 and 302bps up as compared to Q2 of last year.
  • Presently Colgate stock trading is at a valuation of 37.37x and 32.78x of FY13EPS of Rs.40.33 and FY14EPS of Rs.45.97. We Bet to buy Share at 1540 for Target 1800 in a time period 9-12 Months.

Brief about Stock Market Investment & Stock Trading

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What is Stock Market?

Stock market is the place where company equities are traded across the board. Companies are listed with their shares to be traded among buyers and sellers. Before a couple of decades, stock market was place bound of buying and selling the script but now on the edge of internet evaluation, it has become so easy of online stock trading, resulting more people are taking interest in stock trading.

What is Stock Trading?

Stock trading is a skilled task and need in-depth knowledge and experience of company equities and share market process. Trading of stocks have become easy, though it needs good analysis power, vision and speculation mind to draw a future prospects of any company based on its situation today as of now. Good understanding, precautions and analysis can put your money in right equity investment that can fetch you benefits in short or long duration.

What is Stock Market Investment?

The stock market investment is based on the individual nature and risk appetizing capacity. If you are not ready to lose your money in short duration, you need to invest your money in safe investment options like mutual funds, some large cap stocks, bank fixed deposits and all. These are the secured options, which ensure to invest your money in safe instruments with low but secured returns. But if you dare to load more risk on your shoulders, there are chances to earn good returns in short duration. Daily script trading, future & option, commodity trading, small and midcap stocks, penny stocks are the options for those, who are ready to take risk of their money. There are chances, even to lose money where risk factor is high. But when the investment is done with deep calculations, it can fetch the huge opportunity to earn drastic money.

Thus, in share market it is known that more risk can fetch more money; no risk can give you less money. Here risk must be considered as a calculated risk or the growth investment portfolio offered by equity advisory services, where the fund managers have speculated the stock movements based on their skill and years of experience to fix the return by investing in equity market.

Roll of Equity Advisory Services

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Profit Krishna Equity Advisory ServicesAn equity advisory service is a group of experts in stock market and other investment options. They are skilled and having in-depth knowledge of stock market trends, investment in companies and their analytical progress charts, present and future trends of stock market and commodity market.

Why it needs Equity Advisory Services-

Equity investment is the money investment in share market that fluctuates based on the market and company conditions. Equity investment is not as secured like bank FD, Government bonds and other securities. It carries a risk factor based on the type of equities in which you have made investment. Thus it needs your full concentration, time and money to watch continuously your investment. If you are doing job or business, it is difficult to spare time for investment in stock market.

Equity advisory services consists the team of stock market professionals, who are continuously working on stocks trading and transactions to earn out good profit from the investment. They save your time, efforts and keep rolling your money in different investment options as per your instructions to fetch out maximum returns in short duration. Even if you are novice to stock market, they can guide you, advice you and suggest the investment plans based on your risk carrying nature.

They let you know when to invest in stock and why to invest in stocks along with stock tips, company analytical chart, fundamental chart and technical chart for your information which can help you in deciding your stock investment.

Equity advisory functions transparently to let you know your investment portfolio at each point of time through online access of your account. Based on your earning requirements from stock market, they define a custom plan for investment that can help you to get additional earning from stock market in stipulated time.

One can avail stock advisory services, even though you intend to deal in stock market full time or part time. As per the modern trends, stock investment carries various types of risks that need continuous updates and efforts to manage the investment portfolio in a diversified manner, though the long term equity investment in good stocks gives good returns.

Equity advisory services are a great way to invest and manage your money in stock and commodity market. It helps to the people, who want to earn good profit with professionally managed portfolio.

Multibagger Stock – CESC Ltd.

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CESC Ltd., is a power utility company based in Kolkata belonging to the RP Goenka group.  Its history dates back to 1897 when it was Sterling Company and was given the license by the Government to generate and distribute power for Greater Kolkata reason. CESC has an assured coal linkage for 80% of its requirements. Also, 75% of the additional 1,200 MW capacity that it is building will be sold at regulated prices. Only the remaining portion needs to be sold at market rates. As of now it operates four plants with total capacity of 1225 MW from four generating units Budge (750 MW), Southern (135 MW), Titagarh (240 MW) and New Cossipore (100 MW).  It also has a large retail business domiciled in Spencer’s with a strong foot print in South India. It has some properties awaiting development.

CESC saw a revenue growth of 8.3% year on year mainly due to a 6% pass through a fuel cost.  It reported a 19.3% rise in Profit after tax to Rs. 136 Crs.  Retail profitability increased from an EBIDTA of Rs.30/- per sqft to Rs.57/- per sqft. It acquired a controlling stake in First Source a global BPO solution provider.

CESC is speedily completing its expansion at Chandrapur and Haldia which from early 2014 will generate additional power of 1200 MWs. It also looking for strategic investors in Spencer’s after the recent opening of retail to FDI. Better Outlook of retail subsidiary are:

  • Approved of FDI in retail will expedite turnaround in the financial performance of the company
  • Expanding operational area in Hyper and Super formats.
  • More focused approach by opening stanalone stores for is Apparel Brands apart from Fish & Meat stores.
  • To reduce the share of low margin grocery products it has shifted its Focus on private labels as well as International brands

We expect the company to report a growth of over 30% in profits in the next 3 years. We also expect revenue of the company to touch Rs 5,000 Crores and an EPS of Rs 50.00 for FY 2013. Giving a PE of 9 in this uncertain environment. We bet the stock to grab at 305 for Target 385 for the Time Period 9-12 Months.

Multibagger Stock – Cipla Limited

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CIPLA LIMITED:

Cipla Limited is an Indian pharmaceutical company, probably best-known outside its home country for pioneering the manufacture of low-cost anti-AIDS drugs for HIV-positive patients in developing countries. It has played a similarly prominent role in expanding access to drugs to fight influenza, respiratory disease and cancer. Founded by nationalist Indian scientist Khwaja Abdul Hamied as The Chemical, Industrial & Pharmaceutical Laboratories in 1935. It’s Head Quarters is at Mumbai.

Cipla has registered sharp numbers for the quarter ending September 2012. The revenue for the September 2012 quarter is pegged at Rs.2191.84 crore; about 23.86% up against Rs.1769.66 crores recorded during the year-ago period; driven by better product mix i.e. lower proportion of anti retrovirals, Lexapro benefits; price hikes and currency benefits. It gained Rs.26 crores on account of foreign exchange gain. Operating profit skyrocketed about 58% at Rs.676.95 crore vis-a-vis Rs.429.25 crores. Material cost at 36.75% of total sales decreased by 3.8% during Q2FY13 as compared to Q2FY12. PAT reported a handsome growth of 61.83% to Rs.500.01 crores from Rs.308.97 crores. Operating profit margins expanded sharply by 663 bps at 30.89% vis-a-vis 24.26% whereas NPM stood at 22.81% as against 17.46% YoY.

Family revenues grew by 13.5% to Rs.962 cr during Q2 FY13, up from Rs. 847 cr during Q2 FY12. The growth in domestic revenues was largely on account of growth in anti-asthma, antibiotics and cardiovascular therapy segments.

Exports of formulations grew by 38.2% to Rs.1039 cr during Q2 FY13, up from Rs.752 cr during Q2 FY12. Exports of APIs grew by 9.0% to Rs.174 cr during Q2FY13, from Rs.159 cr during Q2FY12. The growth in export revenues was primarily due to growth in anti-depressants, anti-ulcerant and anti-asthma segments.

Cipla received 2012 Thomas Reuters India Innovation Award.

Among strong product mix, increasing focus on exports, firm guidance and ramp up of its facilities, Cipla’s revenue visibility looks strong. We believe Cipla Ltd. is trading at an attractive valuation at 21.69x and 18.75x of FY13EPS of Rs.17.97 and FY14EPS of Rs.20.78. We Bet the Stock price to grab at 390 for Target 500. In time Period of 6-9 Months.

Multibagger Stock to Grab – Maruti Suzuki India Limited

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MARUTI

About Company:

Maruti Suzuki India Limited referred to as Maruti, is a subsidiary company of Japanese automaker Suzuki Motor Corporation. It has a market share of 44.9% of the Indian passenger car market. It was the first company in India to mass-produce and sell more than a million cars. It is largely credited for having brought in an automobile revolution to India. It is the market leader in India, and on 17 September 2007, Maruti Udyog Limited was renamed as Maruti Suzuki India Limited. The company’s headquarters are on Nelson Mandella Road, New Delh and Manufacturing Plants at Gugon & Manesar in India.

Sales &Services:

Maruti 800 ,Omni, Gypsy, WagonR, Alto, Swift,Estilo, SX4, Swift DZire, A-star,Ritz Eeco, Alto, K10, Maruti Ertiga, Maruti XA Alpha, Maruti Alto 800.

Maruti Suzuki has 933 dealerships across 666 towns and cities in all states and union territories of India. It has 2,946 service stations (inclusive of dealer workshops and Maruti Authorised Service Stations) in 1,395 towns and cities throughout India. It has 30 Express Service Stations on 30 National Highways across 1,314 cities in India.

Other Projects:

In 2002 Maruti Suzuki provides vehicle insurance to its customers with the help of the National Insurance Company, Bajaj Allianz, New India Assurance and Royal Sundaram. The service was set up the company with the inception of two subsidiaries Maruti Insurance Distributors Services Pvt. Ltd and Maruti Insurance Brokers Pvt. Limited.

To promote its bottom line growth, Maruti Suzuki launched Maruti Finance in January 2002. Prior to the start of this service Maruti Suzuki had started two joint ventures Citicorp Maruti and Maruti Countrywide with Citi Group and GE Countrywide respectively to assist its client in securing loan.  Maruti Suzuki tied up with ABN Amro Bank, HDFC Bank, ICICI Limited, Kotak Mahindra, Standard Chartered Bank, and Sundaram to start this venture including its strategic partners in car finance. Again the company entered into a strategic partnership with SBI in March 2003. Since March 2003, Maruti has sold over 12,000 vehicles through SBI-Maruti Finance. SBI-Maruti Finance is currently available in 166 cities across India.

Financial Back Ground:

In Q2FY13 net revenues stood at Rs 83bn (+6% YoY, -23% QoQ) driven by better than anticipated improvement in average realizations (+16% YoY, -1% QoQ) while overall volumes declined -8.7% YoY/-22.1% QoQ. EBITDA Margins for the quarter came in-line with our estimate at 6.1% ( -20 bps YoY, – 120 bps QoQ). RM to sales at 79.6% increased +100 bps YoY/+180 bps QoQ impacted by adverse product mix (lower diesel share), higher overall discounts and adverse forex. This was offset by lower other expense to sales at 11.4% (-110 bps YoY/ -120 bps QoQ) which benefitted from lower royalty payment and operating expenses. Net Profit declined 5.4% YoY/ 46.3% QoQ to Rs 2.2 bn but was ~18% above.

FY14. We expect Maruti Suzuki to benefit from both capacity expansion in diesel cars and demand revival in petrol cars this should help clock a 17% volume growth in FY14. We build in 300 bps margin expansion in FY14 over Q2 levels driven by lower discount/car, richer product mix, operating leverage benefits and slight benefit from currency.

Estimates for FY13/FY14 upwards by 3%/8% driven largely by benefits of a richer product mix even as we largely hold on to volume growth expectation of 7%/17% in FY13/14. We believe that the current stock price fully discounts a favorable macro environment for the company in FY14 and see limited upside potential. Key risk to our investment argument remains a sharp improvement in the macro environment and favorable currency.

We Bet the Stock Grab at 1460 for stock target price 1580. Keep stop loss 1400 In time Period 5-6 Months. Long Term Target 1700.