Sector View on FMCG

Motilal Oswal Securities on ITC
THE 18% growth inQ3 PBIT has been encouraging. Growing demand and high entry barriers for other players will ensure steady double-digit profit growth. Poor performance from hotels business is already priced in. Market share of 2.5% in the toilet soaps & rising consumer acceptability in skin care is positive for the company.

Motilal Oswal Securities on Nestle

NESTLE India is best placed to ride on the expected growth in processed food market due to the strong technology of the parent company. Dominant market share and strong brands will prevent margin erosion of the company. Going ahead, high penetration and innovative prod-uct launches would further fuel its growth.

Antique Stock Broking on Britannia Industries

AFTER witnessing consistent drop for four years, Bri-tannia’s market share has stabilised over the last two years, both in value and volume terms. Going ahead, Britannia’s sales would be driven by Good Day, growing at 25-30% in the premium category and Tiger brand, growing at 18-20% in the value-for-money category.

Motilal Oswal Securities on Marico

CONSOLIDATED net sales of Marico recorded a 23% YoY growth, largely led by 15% price increases and 7% volume growth. Brands in pure coconut oil category — Parachute & Nihar — have reported a volume growth of 9% and 15%, respectively. GLobal business grew 44% YoY. Decline in copra and safflower oil prices benefited the co.

Invest Shoppe on Ruchi Soya

RUCHI Soya enjoys the leadership position in the domestic edible oil market. Its processing capacity (the largest in India), experienced mgmt, increasing share of sales from branded products and consistent profit growth despite volatile commodity prices are some of the positives. It is expected to benefit once oil prices start rising.

Invest Shoppe on McLeod Russel

THE tea price boom helped McLeod Russel to post 61.48% growth in net profit in the last quarter. It attributes the improved performance to strong domestic demand. It plans to acquire Vietnam-based Phu Ben Tea for $2 million. McLeod, the world’s largest bulk tea player, will continue to gain from increased preference to tea world over.

Stock Views on Micro Technologies, ESS DEE Aluminium, Britannia Industries

IIFL on Britannia, target of Rs 1765

IIFL has recommended a buy rating on Britannia Industries with a target price of Rs 1765 in its research report.

"We view the resolution of the three-year-old dispute between Britannia’s promoters, Danone and the Wadia group, as a positive development that removes a key overhang from the stock. Danone has agreed to sell its 25.5% stake in Britannia to the Wadia group. Wadia group’s shareholding in Britannia will now go up to 50.96% (from 25.48%). This was the most likely outcome of the dispute, though replacing Danone with a strategic foods player like Kraft, which is keen to enter India and has acquired Danone’s global biscuits assets (barring India) would have been more favourable to Britannia."

"Being an inter-promoter transaction, this deal will not trigger an open offer. Deal pricing is yet to be disclosed. The most positive fallout of this resolution will be an increase in the dividend payout, which at present is low at 20%. The Wadias are likely to fund the transaction through debt or via increased dividend payout in group companies. Media reports suggest that the company has secured a USD 200 million loan facility from ICICI Bank. "BUY", target price of Rs 1765," says IIFL's research report.

Sunidhi Securities on ESS DEE Aluminium, target of Rs 200

Sunidhi Securities & Finance has recommended a buy rating on ESS DEE Aluminium with a target price of Rs 200 in its research report.

"EDAL acquired a 90% stake in IFL for Rs 120 crore from Vedanta Group, making it a subsidiary. The remaining 10% stake is with Vedanta. During Q3FY09, sales have gone by 45% to Rs 103 crore whereas net profit has moved up by 11% to Rs 20.1 crore. During the 9 months of FY09, sales have gone up by 54% to Rs 333.5 crore and net profit by 31% to Rs 64.4 crore. OP & NP margin during the nine months of FY09 stood at 29.5% and 19.3% respectively against 30% and 22.7% (YoY). We recommend BUY with a target price of Rs 200," says Sunidhi Securities & Finance's report.

Sunidhi Sec on Micro Technologies, target of Rs 100

Sunidhi Securities & Finance has recommended a buy rating on Micro Technologies with a target price of Rs 100 in the medium term in its research report.

"During Q3FY09, consolidated sales have gone up by 43% to Rs 77 crore and net profit by 17% to Rs 18.4 crore. OP & NP margin during this quarter stood at 36.7% and 23.9% respectively against 41.7 and 29% (YoY). During the 9 months of FY09, sales have gone up by 65 per cent to Rs 213 crore whereas net profit has increased by 43 per cent to Rs 38.1 crore. OP & NP margins stood at 38.9 % and 25.5 against 41.5% and 29.5% respectively (Y0Y). We recommend BUY with a target price of Rs 100 in the medium term," says Sunidhi Securities & Finance's research report.