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.

Invest Shoppe Views on Indraprastha Gas , Gujarat State Petronet

Crude oil prices have come down to a level of $41 a barrel from a high of $146 a barrel last year. Consequently, upstream oil companies lost, but downstream companies gained. In terms of share price appreciation, downstream companies have outperformed the broader index, the Sensex.

Invest Shoppe on GUJARAT STATE PETRONET

GSPL owns and operates the second largest natural gas (NG) transmission network in India. The availability of natural gas is set to jump three-fold in the next four years. Moreover, its long-term contracts with Torrent Power and Reliance Industries (RIL) for transmission of natural gas are likely to be-come effective in the March 2009.

Invest Shoppe on INDRAPRASTHA GAS

Indraprastha Gas has maintained its consistent performance. The company has firm cash reserves of more than Rs 400 crore. It has already built the gas distribution infrastructure in Delhi, which connects more than 95,000 customers. The order of Supreme Court to states like Haryana and UP to set up CNG stations will help its business to grow.

Invest Shoppe views on Smallcap Telecom - GTL Infrastructure, XL Telecom

GTL Infrastructure

GTL Infra is the leader amongst independent tower operators. It is going to be major beneficiary as it leases land to build multi-tenant towers on and sells space on the towers through long-term leases to cellular operators. The company’s main growth is expected to come from rural rollout by the telecom companies.

XL Telecom

Though the income from telecom segment has come down in recent past, the company’s energy business has good expansion plans including the expansion in solar module manufacturing capacity. Solar power generation business enjoys higher operating profit margin and as the contribution of power segment in the top line would increase, overall profitability of the business is likely to improve.

Stock Views on midcap textiles - Bombay Rayon, Page Industries

Invest Shoppe on BOMBAY RAYON
Bombay Rayon has entered into new European geographies as part of its strategy to de-risk its business model. The recent acquisition of Italian based brand ‘GURU’ should act as an additional growth driver as it plans to open 400 exclusive showroom of GURU across the world. We believe the profitability of company to grow by around CAGR of 50% over next two-three years.

Invest Shoppe on PAGE INDUSTRIES

Increased urbanisation, rapid retail growth and brand consciousness are likely to fuel growth in mid premium to super premium segments of the Indian innerwear industry. A leading player in this segment, Page Industries is likely to be a major beneficiary of this growth. The company has an integrated business model right from material sourcing and inspection to fabric cutting, garmenting, and packaging.

Invest Shoppe Views on Rolta, Allied Digital Services

Rolta India

The company has strong order book of Rs 1500 crore as on June 2008 with 75% executable over FY09. Of the order book, 55% is domestic and 45% is international. For FY09 the company has guided 23%-24% growth in its earnings post MTM losses. At the current market price, stock trades at 8.9x of FY09E earnings. This makes the stock very attractive, keeping in mind its strong visible growth estimated in all the segments. Since more than 50% of the revenue is from domestic operations and the company does not focus on BFSI Sector, it has limited risk from exchange fluctuations and negligible fear of delay in execution of orders due to the turmoil in international markets. Further, we believe that various JVs in particular their partnership with Stone and Webster for exploiting opportunities in the nuclear power space seems very promising for the long run.

Allied Digital Services

Allied Digital Services (ADSL) is riding on high-growth domestic markets of system integration (SI), IT infrastructure management services (IMS) and remote infrastructure management (RIM). RIM is expected to be $13-15bn opportunity for the Indian IT industry by 2013 from the current US$3.6bn, as per the latest Nasscom and McKinsey report. Recent acquisition of EnPointe Global Services (EGS), the US-based IMS provider, marks ADSL’s foray into international markets. Strong revenue visibility, changing business mix, improving margins and higher return ratio make it a good investment bet. We expect 60%-70% compounded annual growth rate in earning per share over the next three years. At the current market price, stock trades at 11x and 6.8x of FY09E and FY10E earnings, which makes it quite an attractive investment bet