top picks for 2015

8/10/2019 Top Picks for 2015

1/14

TOP 1TOP 10 PCKS 2015PICKS-2015December 31, 2014

CHOOSECHOOSE

T

THE

R

I

T

RIGHT

S

T

O

S

STOCKS

F

O

R

2

1

5

FOR2015

8/10/2019 Top Picks for 2015

2/14

ndian stock saw stupendous gains in year 2014 with mid cap stocks outshining large cap stocks. The rally got further strengthened

towards mid-year after BJP led by Mr Narendra Modi formed government at the centre. The commitment of the government to

Iratify and rectify all the policies, desired to bolster the growth look to be reality now with Prime Minister Narendra Modi led

government using its power by clearing important ordinances that includes coal, insurance and last but not the least is land acquisition

bill.

Interest rates too are likely to move towards the economic expansionary policies shortly in view of the subsiding both headline and

consumer inflation due to fall in crude oil prices. Fall in crude oil is seen as big positive for importers like India as it will not only help

saving huge expense on the consumption needs but will also help in checking trade balance and fiscal deficit.

Through the Broader index has moved up smartly in short span on the expectation of revival and enthusiasm. However, the earnings

are still to follow and do the justification. Year 2015 may not be a year of strong broader gains in the indices but still the upside

movements would be seen in the sectors, which would reap the benefits of the revival.

F

R

M

S

M

C

R

S

A

R

D

S

K

FROM SMC RESEARCH DESK ....

Sr.no Co_Name Sector CMP (Rs.) (29th Dec 2014) Target (Rs) Upside Potential Page No.

1 Axis Bank Ltd Banks 494.00 663.00 34% 4

2 Zee Entertainment Enterprises Ltd Entertainment 379.45 480.00 27% 5

3 Exide Industries Auto Ancillaries 176.45 212.00 20% 6

4 Oriental Bank Of Commerce Banks 338.55 454.00 34% 7

5 Karur Vysya Bank Banks 559.95 721.00 29% 8

6 Jyothy Laboratories Ltd FMCG 253.00 351.00 39% 9

7 Jagran Prakashan Ltd Media 132.30 172.00 30% 10

8 Triveni Turbine Capital Goods 105.65 154.00 46% 11

9 Kalpataru Power Transmission Capital Goods 218.75 291.00 33% 12

10 Vip Industries Plastic products 112.25 149.00 32% 13

Ltd

Ltd

Ltd

Ltd

Ltd

Snap Shot

8/10/2019 Top Picks for 2015

3/14

PERFORMANCE OF "TOP PICKS FOR 2014"

Performance of Report "Top Picks for 2014" released on 27th December 2013

SMC Retail Research came out with a report " Top Picks for 2014" on 27th December 2013. It is a pleasure to share with you that out of ten stocks recommendation, seven stocks

met the targets given in the report for one year perspective. The average return generated is 21%.

Calculated either on the target price in case of target met or otherwise calculated on the CMP as on 29th December 2014.

Prices as on 29th Dec.2014

Adjusted price due to stock split

*

**

***

Sr.no. Co_Name 26 Dec. 2013 Target (Rs.) Status/CMP Return

Average Return 21%

** *

***

1 Adani Ports 160.05 219.00 Target Met 37%

2 Cairn India 320.10 421.00 239.60 -25%

3 Crompton Greaves 131.90 202.00 Target Met 53%

4 Escorts 139.70 179.00 129.20 -8%

5 Essel Propack 52.55 68.00 Target Met 30%

6 M & M 959.10 1202.00 Target Met 25%

7 Punjab Natl.Bank 125.97 159.60 Target Met 27%

8 Sesa Sterlite 199.30 264.00 Target Met 33%

9 Torrent Pharma. 478.00 655.00 Target Met 37%

10 Wipro 547.65 705.00 550.40 1%

8/10/2019 Top Picks for 2015

4/14

AXIS BANK LIMTED

CMP: Rs. 494.00 Target: Rs. 663.00 Upside Potential : 34%

RECOMMENDATION: BUY

Time horizon: 1 Year

Current Mkt.Price (Rs.) 494.00

Face Value (Rs.) 2.00

52 Week High/Low 506.00/216.68

M.Cap (Rs. in Cr.) 116740.61

EPS (Rs.) 26.06

P/E Ratio (times) 18.96

P/B Ratio (times) 3.04

Stock Exchange BSE

VALUE PARAMETERS

As on Sep14 % Of Holding

Foreign 51.54

Institutions 10.82

Non Promoter Corporate Holding 1 .48

Promoters 28.88

Public & Others 7.28

SHAREHOLDING PATTERN

P/E CHART

INVESTMENT

The business of the bank increased at higher pace of 15% to Rs 525926

crore at the end September 2014. Advances increased 20% yoy at Rs

242198 crore, while the deposits moved up 11% yoy to Rs 283729

crore at end September 2014.

FThe bank expanded its Net Interest Margin (NIM) to 3.97 percent from

3.79 percent y-o-y, on the back of a 0.07 percent rise in the yield on

advances and a 0.06 percent dip in the cost of funds, largely due to

increase in the proportion on the low-cost Current Account Savings

Account (CASA) deposits which increased to 45% from 43% a year ago.

The management expects to close the fiscal with an NIM of 3.50 percent

FThe mangement expects to maintain the credit growth momentum andis targeting a 20 percent rise and expects a deposit growth of up to 15

percent.

FThe Bank is well capitalised and the Capital Adequacy Ratio (CAR) as on

September 2014 under Basel III was 14.84%.

FAs on 30th September 2014, Gross NPAs Non-Performing Asset (NPA)

and Net NPAs stood at 1.34% and 0.44% respectively. The Bank held

provision coverage of 78% as on 30th September 2014, as a proportion

of Gross NPAs, including prudential write-offs. The provision coverage

before accumulated write-offs was 87%.

FAs on 30th September 2014, the Bank's Gross NPA was Rs 3,613 crores

as against Rs 3,463 crores as on 30th June 2014. During the quarter, the

Bank added Rs 911 crores to Gross NPAs. Recoveries and upgrades

were Rs 164 crores and write-offs were Rs 597 crores.

FThe bank continued to expand its footprint and added 84 branches to

its network across the country at the end of 30th September 2014.

RATIONALE

F

Valuation

With the healthy pace of branch expansion leading to a robust

distribution network continues to be the driving force for the bank's

retail business. The bank will continue to focus on retail loans and

would change its retail loans mix to a higher return business going

forward, thus it is expected that the stock may see a price target of

Rs.663 in 8 To 10 months time frame on current P/BV of 3.04x and

FY16 (E) BVPS of Rs. 218.1.

4

Actual EstimateFY Mar-14 FY Mar-15 FY Mar-16

Net Total Income 19,799.20 22,515.80 26,548.60

EBIT 9,479.40 12,024.80 14,289.00

Pre-tax Profit 11,589.70 10,862.20 13,105.90

Net Income 6,310.10 7,191.20 8,677.80

EPS 26.84 30.52 36.87

BVPS 32.70 187.56 218.10

ROE 17.60 17.40 18.20

(Rs.in Cr.)FINANCIAL PERFORMANCE

Source: Company's Website, Reuters & Capitaline

0.00

100.00

200.00

300.00

400.00

500.00

600.00

27-Dec-11

31-Jan-12

6-Mar-12

13-Apr-12

18-May-12

22-Jun-12

27-Jul-12

4-Sep-12

10-Oct-12

16-Nov-12

24-Dec-12

29-Jan-13

5-Mar-13

11-Apr-13

20-May-13

24-Jun-13

29-Jul-13

4-Sep-13

11-Oct-13

19-Nov-13

24-Dec-13

29-Jan-14

6-Mar-14

11-Apr-14

22-May-14

26-Jun-14

1-Aug-14

9-Sep-14

20-Oct-14

27-Nov-14

1.00 1.70 2.40 3.10 Close Pr ice

8/10/2019 Top Picks for 2015

5/14

ZEE ENTERTAINMENT ENTERPRISES LIMITED

CMP: Rs. 379.45 Target: Rs. 480 Upside Potential : 27%

RECOMMENDATION: BUY




52 Week High/Low 401.60/254.70

M.Cap (Rs. in Cr.) 36442.38

EPS (Rs.) 9.05



Dividend Yield (%) 0.53

Stock Exchange BSE

VALUE PARAMETERS


Foreign 51.13

Institutions 1.39


Promoters 43.07



P/E CHART

5

INVESTMENT RATIONALE

Zee Entertainment Enterprises (ZEEL) is one of India's leading

television, media and entertainment companies. It is amongst the

largest producers and aggregators of Hindi programming in the world,

with an extensive library housing over 1.2 lac+ hours of television

content. With rights to more than 3,500 movie titles from foremost

studios and of iconic film stars, ZEEL houses the world's largest Hindi

film library.

FDuring the quarter ended September 2014, company's advertising

revenues stood at Rs 625.94 crore, subscription revenues stood at Rs

424.45 crore and the International subscription revenues was at Rs

87.2 crore. The company expects advertising revenues to see a growth

of 11-12 percent in FY15.

FThe company is planning to launch a new Hindi General Entertainment

Channel (GEC) towards the end of FY15. It will be in line with the cost

structures of any other GEC because it is a mainstream GEC launch

competing with the current incumbent players in the market.

FThe launch of new shows across network channels along with the tie up

of cricket rights and current series rights of programs has helped

ensure that in a highly fragmented environment, the network

maintained and grew its dominance. The Company aims to further

enhance the market share through a planned content lineup and launch

of new channels.

FThe company undertook various initiatives to further strengthen its

dominance in international markets by entering into deals with new

platform operators as well as launching new channels in some of the

geographies. In line with this expansion strategy, the company

launched Zee Film Hindi, Zee Lamhe and Zee Bioskop in various

geographies.

FThe company has enhanced the HD offering with the launch of &

Pictures HD. As a result of its consistent performance, the company

continues to maintain healthy operating margins.

F

Valuation

Actual Estimate

FY Mar-14 FY Mar-15 FY Mar-16

Revenue 4,421.70 4,679.60 5,437.80

EBITDA 1,204.30 1,316.20 1,594.30

EBIT 1,154.20 1,265.90 1,515.40

Pre-tax Profit 1,319.00 1,413.20 1,690.00

Net Income 892.10 915.70 1,132.60

EPS 9.19 9.36 11.46

49.33 50.15 56.97ROE 20.60 22.50 23.20BVPS

(Rs.in Cr.)

FINANCIAL PERFORMANCE


The management expects the media industry to benefit from the

improvement in overall economic environment. TV ad spends are likely

to improve and expect television media industry to grow faster than the

recent past. The viewership market share is on an uptrend, which will

help to continue to grow ahead of the market. The company will

continue to pursue growth opportunities, which would enhance long

term shareholder value. We expect the stock to see a price target of Rs

480 in 8 to 10 months time frame on a current P/E of 41.92x and FY16

(E) earnings of Rs.11.46.

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

450.00

27-Dec-11

31-Jan-12

6-Mar-12

13-Apr-12

18-May-12

22-Jun-12

27-Jul-12

4-Sep-12

10-Oct-12

16-Nov-12

24-Dec-12

29-Jan-13

5-Mar-13

11-Apr-13

20-May-13

24-Jun-13

29-Jul-13

4-Sep-13

11-Oct-13

19-Nov-13

24-Dec-13

29-Jan-14

6-Mar-14

11-Apr-14

22-May-14

26-Jun-14

1-Aug-14

9-Sep-14

20-Oct-14

27-Nov-14

17 26 35 44 Close Price

8/10/2019 Top Picks for 2015

6/14

EXIDE INDUSTRIES LIMITED


RECOMMENDATION: BUY




52 Week High/Low 183.10/99.05

M.Cap (Rs. in Cr.) 14998.25

EPS (Rs.) 6.02




Stock Exchange BSE

VALUE PARAMETERS


Foreign 17.43

Institutions 17.76


Promoters 46.00



P/E CHART

6

INVESTMENT

Exide Industries is a leading manufacturer of lead acid batteries for

automotive, telecom, traction, UPS, naval and motive power markets.

The Company sells its products under EXIDE, SF, SONIC and Standard

Furukawa Brands. In the international market, the products are sold

under DYNEX, INDEX and SONIC brands.

FThe Company plans a capex of Rs 350 crore for FY15. Of this, around Rs

200 crore is allotted for automotive segment and remaining Rs 150

crore for the industrial segment.

FThe growth in topline came on account of sales improvement across the

segments, with automotive and industrial battery segment contributed

the most. The Company revenue contribution from automotive and

industrial segment was in the ratio of 60:40.

FDuring May 2014, the company has acquired 100% ownership of ING

Vyasya Life Insurance Company, now known as Exide Life Insurance

Company Limited. The government has increased the foreign

investment in insurance sector to 49 per cent from 26 percent and this

will help the company to pool funds to enhance its insurance business

going forward.

FCapacity utilization of the company during the quarter ended June

2014 was 76% for the 4-W automotive segment. Capacity utilization

was above 100% for the industrial segment. The Company's capacity

utilization of smelter subsidiaries was almost 80%. The Company

market share stood at 63.1% for 4-W automotive segment and 66.3%

for the 2-Wheeler segment.

FRecently, the company has entered into a new Technical License and

Assistance Agreement with Shin-Kobe Electric Machinery Co. Limited,

Japan to implement new manufacturing processes for producing cost

competitive quality automotive batteries.

FThe company has made forays into new areas such as batteries of

electric and hybrid cars and two-wheelers and in the development of

environment friendly storage power alternatives. The company is the

only domestic supplier of lithium-ion batteries for electric vehicles

manufactured by Mahindra-Reva.

RATIONALE

F

Valuation

Actual Estimate


Revenue 8,308.90 7,892.20 8,908.20

EBITDA 886.50 1,006.20 1,148.70

EBIT 746.10 842.40 1,001.10

Pre-tax Profit 786.70 896.70 1,063.00

Net Income 544.70 610.30 719.50

EPS 6.41 7.11 8.47

BVPS 40.25 47.46 53.01

ROE 16.70 15.20 16.60


To maintain its leadership position, the company is continuously

upgrading its technology and also acquiring new technology to meet

the ever increasing demands of its customers. It is expected that the

stock will see a price target of Rs.212 in 8 to 10 months time frame on atarget P/E of 25x and FY16 (E) earnings of Rs.8.47.

FSome of the prominent names in the client list include Tata

Motors, Maruti Suzuki, Mahindra-Renault, Ashok Leyland,

Swaraj Motors and Eicher Motors. This provides it with a

reasonable cushion in terms of business spread among the key

players in the industry.

Source: Company's Website, Reuters & Capitaline0.00

50.00

100.00

150.00

200.00

250.00

27

-Dec-1

1

31

-Jan-1

2

6-M

ar-

12

13

-Apr-1

2

18

-May-1

2

22

-Jun-1

2

27

-Ju

l-12

4-S

ep-1

2

10

-Oct-

12

16

-Nov-1

2

24

-Dec-1

2

29

-Jan-1

3

5-M

ar-

13

11

-Apr-1

3

20

-May-1

3

24

-Jun-1

3

29

-Ju

l-13

4-S

ep-1

3

11

-Oct-

13

19

-Nov-1

3

24

-Dec-1

3

29

-Jan-1

4

6-M

ar-

14

11

-Apr-1

4

22

-May-1

4

26

-Jun-1

4

1-A

ug-1

4

9-S

ep-1

4

20

-Oct-

14

27

-Nov-1

4


8/10/2019 Top Picks for 2015

7/14

ORIENTAL BANK OF COMMERCE


RECOMMENDATION: BUY




52 Week High/Low 377.30/160.50

M.Cap (Rs. in Cr.) 10151.42

EPS (Rs.) 39.71



Stock Exchange BSE

VALUE PARAMETERS


Foreign 12.75

Institutions 20.92


Promoters 59.13



P/BV CHART

7

INVESTMENT

Oriental Bank of Commerce operates in four segments: treasury

operations, corporate/wholesale banking, retail banking and other

banking business operations. The Government of India holds 59.13%

stake in OBC (as per the shareholding patterns as on 30 September

2014).

FBusiness of the bank rose at steady pace of 7% yoy to Rs 326690 crore

at end September 2014. Deposit increased 6% to Rs 186390 crore,

while advances grew 8% at Rs 140300 crore at end September 2014.

Bank targets 10-12% advances-deposits growth for FY2015.

FThe Net interest income (NII) of the bank stood at Rs 1246.29 crore in

Q2FY2015 and the Net Interest Margin (NIM) of the bank stood 2.63%

in Q2FY2015. Bank proposes to maintain NIM in the range of 2.6-2.7%.

FAbout Rs 684 crore of restructured advances slipped NPAs Non-

Performing Asset (NPA) category in Q2FY2015 contributing large

chunk of Rs 978 crore fresh slippages in Q2FY2015. Overall slippages in

the restructured advance book stood at Rs 2799 crore at end

September 2014.

FBank has conducted fresh restructuring of Rs 714 crore in Q2FY2015.

The standard restructured advance book of the bank stood flat on

sequential basis at Rs 10804 crore at end September 2014. Bank has

restructuring pipeline of Rs 1000 crore for H2FY2015.

FThe Current Account Savings Account (CASA) ratio of the bank has alsomoved up 24.9% at end September 2014 from 24.1% a quarter ago and

24.5% a year ago.

FBanks capital adequacy ratio under Basel III stood at 10.88% at end

September 2014, while capital adequacy ratio rises to 11.55%after

issue of Tier II bonds of Rs 1000 crore in October 2014.

FBank has added 32 new branches and 35 new ATMs in the quarter

ended September 2014. Total delivery channels of the bank increased

to 4610 comprising 2161 branches and 2449 ATMs at end September

2014.

RATIONALE

F

Valuation

Actual Estimate


Net Total Income 7,072.40 7,255.40 8,264.10

EBIT 4,155.50 4,115.00 4,692.00

Operating Profit 1,580.40 1,732.10 4,788.00

Pre-tax Profit 1,580.40 1,751.70 2,271.80

Net Income 1,139.40 1,306.10 1,611.40

EPS 38.73 43.54 53.75

BVPS 418.81 462.06 504.21

ROE 9.16 7.70 11.10


With inflation consistently declining and expect interest rates cut by

RBI, the operating performance of the bank is likely to improve on all

fronts including credit growth, asset quality and treasury gains, thus it

is expected that the stock may see a price target of Rs.454 in 8 To 10

months time frame on target P/BV of 0.9x and FY16 (E) BVPS of

Rs.504.21.


0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

450.00

27-Dec-11

31-Jan-12

6-Mar-12

13-Apr-12

18-May-12

22-Jun-12

27-Jul-12

4-Sep-12

10-Oct-12

16-Nov-12

24-Dec-12

29-Jan-13

5-Mar-13

11-Apr-13

20-May-13

24-Jun-13

29-Jul-13

4-Sep-13

11-Oct-13

19-Nov-13

24-Dec-13

29-Jan-14

6-Mar-14

11-Apr-14

22-May-14

26-Jun-14

1-Aug-14

9-Sep-14

20-Oct-14

27-Nov-14

0.3 0.5 0.7 0.9 Close Price

8/10/2019 Top Picks for 2015

8/14

KARUR VYSYA BANK LIMITED


RECOMMENDATION: BUY




52 Week High/Low 584.00/310.00

M.Cap (Rs. in Cr.) 6772.05

EPS (Rs.) 36.30



Stock Exchange BSE

VALUE PARAMETERS


Foreign 33.22

Institutions 13.95


Promoters 2.22



P/E CHART

8

INVESTMENT

As on September 2014, the bank operates with 599 branch network

and 1,637 ATM across India. Going forward it proposes to add 65-70

branches in FY2015.

FThe total business of the bank as on September 2014 grew by 6.78% to

Rs. 80,383 crore. The gross deposit grew by 3.43% to Rs. 44,862 crore

while the Gross Advances grew by 11.32% to Rs. 35,521 crore. Further

the bank is expecting advances growth to pick up to 18-20 % by end

March 2015. Bank proposes to start aggressive marketing of loan

products only at comfortable risks.

FDuring the quarter ended September 2014 the net interest margin of

the bank improved 2.67% as compared to 2.51% in the corresponding

quarter last year. The bank proposes to improve net interest margin

(NIM) to 3% over next two-three quarters.

FThe capital adequacy ratio of the bank improved to 14.41% as on

September 2014 from 12.81% during the same period previous years.

The Tier I CRAR (%) improve to 13.46% from 11.74% during the

same period previous year. The Tier II CRAR (%) of the bank stood at

0.95%.

FAdditions to the restructured advances book stood at Rs 125 crore in

the quarter ended September 2014. Restructured advances book of the

bank has increased to Rs 1599 crore at end September 2014 from Rs

1491 crore at end June 2014.

FThe ratio of Gross NPA improved to 1.36 at the end of September 2014

as compared to 1.55during the same period previous year. The Net NAP

ratio increased from 0.51 at the end of September 2013 to 0.59 as at

September 2014.

FThe bank has raised Rs 625 crore through the Qualified Institutional

Placement (QIP) at an issue price of Rs. 466 per share. The fund raising

is to support its growth in the near future.

RATIONALE

F

Valuation

Improving economic condition and expectation of rate cut by the

Reserve Bank of India augers well for the bank. Moreover, bank focus on

SME (small and medium enterprises) and retail segments, will further

derive the growth of the loan book going forward. We expect the stock

to see a price target of Rs.721 in 8 to 10 months time frame on a target

P/B of 1.87x and FY15 (E) book value per share of Rs.385.65.

Actual Estimate

FY Mar-14 FY Mar-15 FY Mar-16Revenue 1,848.20 2,038.20 2,445.60

EBIT 837.80 922.20 1,173.30

Pre-tax Profit 395.50 602.60 866.40

Net Income 429.60 485.80 648.20

EPS 39.78 42.29 56.79

BVPS 310.09 351.54 385.65

ROE 13.40 13.30 14.80



1 1.35 1.7 2.05 Close Price

0.00

100.00

200.00

300.00

400.00

500.00

600.00

700.00

800.00

900.00

27

-Dec-1

1

31

-Jan-1

2

6-M

ar-

12

13

-Apr-1

2

18

-May-1

2

22

-Jun-1

2

27

-Ju

l-12

4-S

ep-1

2

10

-Oct-

12

16

-Nov-1

2

24

-Dec-1

2

29

-Jan-1

3

5-M

ar-

13

11

-Apr-1

3

20

-May-1

3

24

-Jun-1

3

29

-Ju

l-13

4-S

ep-1

3

11

-Oct-

13

19

-Nov-1

3

24

-Dec-1

3

29

-Jan-1

4

6-M

ar-

14

11

-Apr-1

4

22

-May-1

4

26

-Jun-1

4

1-A

ug-1

4

9-S

ep-1

4

20

-Oct-

14

27

-Nov-1

4

8/10/2019 Top Picks for 2015

9/14

JYOTHY LABORATORIES LIMITED


RECOMMENDATION: BUY




52 Week High/Low 300.00/171.95

M.Cap (Rs. in Cr.) 4579.30

EPS (Rs.) 7.81




Stock Exchange BSE

VALUE PARAMETERS


Foreign 14.43

Institutions 9.37


Promoters 66.78



P/E CHART

9

INVESTMENT

Jyothy Laboratories manufactures and distributes brands across

product categories as diverse as fabric care, household insecticides,

utensil cleaners, fragrances, personal care, besides marketing tea and

coffee brands. The company has 10 brands in its kitty including Ujala,

Maxo, Exo, Henko, Pril, Margo, Neem, Fa, Mr.White and Chek that are

well-known and established brands in their respective categories.

FThe management is confident of sustaining the strong revenue growth

momentum in the coming quarters on the back of innovations,

increased distribution reach and adequate promotional activities. The

OPM is expected to remain at 13.5-14% in the near future.

FThe company has re-launched Henko Matic in the premium to mild-

premium detergent segment with a new proposition. The brand was

promoted through a digital campaign, social media and on ground tie-

ups. Henko Matic has been launched with the aim of grabbing a 20%

share in the matic segment and a 10% share in the super premium

detergent segment in the coming years.

FIn dishwashing segment Pril was re-launched in August 2014 with a

new formulation. The company has also launched 225ml bottles and

pouches to attract first time users to the brand and the liquid format of

the dishwashing detergent.

FThe company is also engaged into service sector in organized laundry

to provide World class laundry at affordable price at your doorstep

through its subsidiary 'Jyothy Fabricare Services Limited'. The

management expects laundry business to be EBIDTA positive by March

2015.

FThe management said the gross margin for H2 FY15 will better than H1

with drop in key input prices including palm oil and packaging cost.

Future added that the improvement in gross margins is likely to directly

flow in the OPM, resulting in a better OPM in H2 FY2015.

RATIONALE

F

Valuation

Actual Estimate


Revenue 1,318.40 1,561.50 1,837.90

EBITDA 157.20 179.40 233.60

EBIT 132.90 152.00 216.30

Pre-tax Profit 85.80 142.80 205.40

Net Income 85.38 144.50 196.00

EPS 5.00 8.26 10.74

BVPS 40.57 43.80 48.36

ROE 12.40 19.00 24.00


The company continues to deliver superior value and strong

performance through various measures such as healthy innovation

pipeline, aggressive brand investment and focus on improvement of

margin. Company's ground tie ups and better placement of the

products is expected to capture the target markets, we expect the stock

to see a price target of Rs.351 in 8 to 10 months time frame on a three

year average P/E of 32.66x and FY16 (E) earnings of Rs.10.74.


0.00

100.00

200.00

300.00

400.00

500.00

600.00

700.00

30-Dec-11

3-Feb-12

12-Mar-12

18-Apr-12

23-May-12

27-Jun-12

1-Aug-12

7-Sep-12

15-Oct-12

21-Nov-12

28-Dec-12

1-Feb-13

8-Mar-13

16-Apr-13

23-May-13

27-Jun-13

1-Aug-13

10-Sep-13

17-Oct-13

22-Nov-13

30-Dec-13

3-Feb-14

11-Mar-14

17-Apr-14

27-May-14

1-Jul-14

6-Aug-14

12-Sep-14

23-Oct-14

2-Dec-14


8/10/2019 Top Picks for 2015

10/14

JAGRAN PRAKASHAN LIMITED


RECOMMENDATION: BUY




52 Week High/Low 154.40/83.00

M.Cap (Rs. in Cr.) 4325.04

EPS (Rs.) 7.38




Stock Exchange BSE

VALUE PARAMETERS


Foreign 13.88

Institutions 12.12


Promoters 62.60



P/E CHART

INVESTMENT

Total circulation of the company stands at 4.9 mn, which includes 3.7

mn of Dainik Jagran and rest from Nai Dunia, Mid-Day, City Plus, I-Next

everything put together. Dainik Jagran newspaper reported healthy

11.5% ad growth, aided by market share gains during the quarter

ended September 2014.

FThe circulation revenue growth during the quarter ended September

2014 was contributed by 5-6% realization improvement. The company

expects circulation growth for the current and next year to be 4-5%

with the major contribution coming from Madhya Pradesh and

Chhattisgarh.

FThe company said that it is looking to further increase the cover price,

in-line with its competitors who had already increased the price.

Current net realization stood at Rs 2.30 per copy.

FMid-Day revenue growth has been impacted because it has stooped

barter & private treaties business and continued slowdown in Mumbai

market. However, in month of October, the company has seen 25%

growth in ad revenue. The company has stopped most of the

discounted copies and it is net positive on subscription revenue. The

company said that it is focusing on improving efficiencies to drive

healthy operating profits.

FThe company has forayed into the radio industry via acquisition of

Music Broadcast (MBPL), which operates India's leading radio network

known as 'Radio City'. It is present in 20 stations across 7 states. Thenetwork has a strong national presence, with a presence in the top 14

out of 16 advertisement revenue generating markets with a focus on

SEC AB audiences. The acquisition is subject to regulatory approvals,

including from Ministry of Information and Broadcasting, and

execution of binding agreements.

FThe growth in ad revenue was contributed from sectors like FMCG,

lifestyle, BFSI and government while real estate and education sectors

were the laggards.

FThe capex for the year stand at Rs 60 crore of which it has incurred Rs

26 core in H1 FY15.

RATIONALE

F

Valuation

Actual Estimate


Revenue 1,663.10 1,837.50 2,043.50

EBITDA 382.60 452.90 529.90

EBIT 303.70 355.50 431.60

Pre-tax Profit 315.80 357.20 442.20

Net Income 236.20 247.50 306.60

EPS 7.50 7.96 9.62

BVPS 29.42 34.76 40.24

ROE 24.90 23.20 25.10


Over the years, the company has gained strong foot print in the media

and communications space. Going forward, it is expected to benefit

from the expansion in regional language newspaper readership and

growth in ad revenue. It has presence in 15 states and publishes papers

in five languages. It enjoys leadership in terms of readership among the

Hindi language newspapers. We expect the stock to see a price target of

Rs.172 in 8 to 10 months time frame on a current P/E of 17.93x and

FY16 (E) earnings of Rs.9.62.

10



0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

180.00

200.00

27

-Dec-1

1

31

-Jan-1

2

6-M

ar-

12

13

-Apr-1

2

18

-May-1

2

22

-Jun-1

2

27

-Ju

l-12

4-S

ep-1

2

10

-Oct-

12

16

-Nov-1

2

24

-Dec-1

2

29

-Jan-1

3

5-M

ar-

13

11

-Apr-1

3

20

-May-1

3

24

-Jun-1

3

29

-Ju

l-13

4-S

ep-1

3

11

-Oct-

13

19

-Nov-1

3

24

-Dec-1

3

29

-Jan-1

4

6-M

ar-

14

11

-Apr-1

4

22

-May-1

4

26

-Jun-1

4

1-A

ug-1

4

9-S

ep-1

4

20

-Oct-

14

27

-Nov-1

4

8/10/2019 Top Picks for 2015

11/14

TRIVENI TURBINE LIMITED


RECOMMENDATION: BUY




52 Week High/Low 125.95/51.00

M.Cap (Rs. in Cr.) 3486.16

EPS (Rs.) 1.92




Stock Exchange BSE

VALUE PARAMETERS


Foreign 19.03

Institutions 4.32


Promoters 70.01



P/E CHART

11

INVESTMENT

Triveni Turbine Limited (TTL) is a focused and growing corporation

which has been helping customers in achieving power self-sufficiency

as well as sustainability with engineered-to-order steam turbines upto

30 MW along with unparallel after-sales services. TTL is the market

leader in the steam turbines with state-of-the-art manufacturing

facility located in Bengaluru.

FThe standalone carry forward order book including refurbishment

orders was Rs 600 crore. And the consolidated order book as end of Sep

2014 stood at 770 crore. Standalone Order book excluding

aftermarkets as end of Sep 2014 stood at Rs 550 crore.

F

Order intake in H1FY15 was up 47% to Rs 290 crore and of whichaftermarket /refurbishment orders were about Rs 61 crore. And the

balance is product orders and of which domestic orders was Rs 90

crore and balance are export orders.

FIn domestic market the company could improve its market share as the

order finalized in Q2FY15 has been significantly higher than the

corresponding period of last year. The company believes the coming

quarters will see policy initiatives which in turn should result in fresh

investment in infrastructure and other industrial segments. This

should eventually lead to new enquiries and order finalization.

FThe profitability in export markets continues to remain very strong as

TTL has a healthy pricing advantage over global competitors. With arising share of exports as a percentage of sales, it will aid margins

positively. TTL also remains very strict about payment terms in export

markets and refuses to accept an order without getting the advance

from its customer and a Letter of Credit.

FNet profit of the company rose 56.22% to Rs 23.87 crore in the quarter

ended September 2014 as against Rs 15.28 crore during the previous

quarter ended September 2013. Sales rose 26.84% to Rs 155.61 crore

in the quarter ended September 2014 as against Rs 122.68 crore during

the previous quarter ended September 2013.

RATIONALE

F

Actual Estimate


Revenue 514.70 696.60 959.30

EBITDA 103.60 153.20 222.60

EBIT 90.05 140.70 208.20

Pre-tax Profit 99.68 146.20 215.20

Net Income 67.95 98.84 148.10

EPS 2.06 3.06 4.33

BVPS 5.30 7.30 9.67

ROE 43.40 47.20 51.10


Valuation

The company expects a strong order booking in the coming quarters

from the export market so as to have a significantly higher export order

booking for FY15. The focus of the company on the export market and

spreading its geographic reach is also gaining momentum and is

driving export order booking. It is expected that the stock will see a

price target of Rs .154 in 8 To 10 months time frame on one year average

P/E of 35.51x and FY16 (E) earnings of Rs.4.33.


0.00

50.00

100.00

150.00

200.00

2-Apr-12

4-May-12

5-Jun-12

5-Jul-12

6-Aug-12

7-Sep-12

10-Oct-12

12-Nov-12

14-Dec-12

16-Jan-13

15-Feb-13

19-Mar-13

23-Apr-13

24-May-13

25-Jun-13

25-Jul-13

28-Aug-13

30-Sep-13

1-Nov-13

4-Dec-13

6-Jan-14

5-Feb-14

10-Mar-14

10-Apr-14

16-May-14

17-Jun-14

17-Jul-14

20-Aug-14

22-Sep-14

29-Oct-14

2-Dec-14


8/10/2019 Top Picks for 2015

12/14

KALPATARU POWER TRANSMISSION LIMITED


RECOMMENDATION: BUY




52 Week High/Low 231.80/70.50

M.Cap (Rs. in Cr.) 3356.72

EPS (Rs.) 7.32




Stock Exchange BSE

VALUE PARAMETERS


Foreign 9.59

Institutions 22.44


Promoters 59.45



P/E CHART

12

INVESTMENT

Kalpataru Power Transmission Limited (KPTL) is one of the largest and

fastest growing specialized Engineering, Procurement and

Construction (EPC) companies in India engaged in power transmission

& distribution, oil & gas pipeline, railways, infrastructure development,

civil contracting and warehousing & logistics business with a strong

international presence in power Transmission and Distribution (T&D).

FThe management expects FY 2015 sales growth to be around 12-15%

and for FY 2016 the sales growth will be upwards by 15%. Moreover,

Ebidta margin of KPTL for FY 2015 is expected to be in the range of

around 10%.

F

As on Sep'14 the company has a consolidated order book of about Rs10000 crore. KPTL has an order book of about Rs 5550 crore including

new orders worth over Rs 910 crore received during the quarter. The

company expects to end the year with an order inflow target of Rs 4000

crore. If order comes, the year end order book would see a growth of

about 5% in order book.

FIn Fy 15, the management of the company expects that T&D business

would be driven by good orders and execution from international order

book. In FY 2016, it is expected that there will be good opening order

book from domestic T&D space along with continuous execution of

international orders.

FJMC Projects, where the Promoters' hold about 59.45% share, has anorder book of about Rs 4450 crore including the new orders worth Rs

278 crore, which it received during the quarter. The management

expects margin to improve further, going forward by 50 bps in JMC

Projects in H2 FY'15 and further by about 50-80 bps in FY 2016.

FNet profit of the company rose by 37.79% to Rs 42.70 crore in the

quarter ended September 2014 as against Rs 30.99 crore during the

previous quarter ended September 2013. Sales rose by 18.85% to Rs

1123.55 crore in the quarter ended September 2014 as against Rs

945.36 crore during the previous quarter ended September 2013.

RATIONALE

F

Valuation

Actual Estimate


Revenue 7,038.40 7,724.10 8,568.70

EBITDA 589.70 695.20 824.50

EBIT 440.80 541.60 655.10

Pre-tax Profit 215.30 273.70 335.70

Net Income 122.20 172.90 212.90

EPS 7.95 11.26 13.88

BVPS 136.79 148.37 160.47

ROE 6.00 8.20 9.60


The opportunities in the T&D space are likely to get impetus while the

focus of the new government on the railways and water could open

large opportunities in the infrastructure EPC business. In response to

the contraction of opportunities in the T&D space in some parts of the

globe, the management is looking for opportunities in new regions. It is

expected that the stock will see a price target of Rs.291 in 8 to 10

months time frame on a target P/E of 21x and FY16 (E) earnings of

Rs.13.88.


0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

27-Dec-11

31-Jan-12

6-Mar-12

13-Apr-12

18-May-12

22-Jun-12

27-Jul-12

4-Sep-12

10-Oct-12

16-Nov-12

24-Dec-12

29-Jan-13

5-Mar-13

11-Apr-13

20-May-13

24-Jun-13

29-Jul-13

4-Sep-13

11-Oct-13

19-Nov-13

24-Dec-13

29-Jan-14

6-Mar-14

11-Apr-14

22-May-14

26-Jun-14

1-Aug-14

9-Sep-14

20-Oct-14

27-Nov-14


8/10/2019 Top Picks for 2015

13/14

VIP INDUSTRIES LIMITED


RECOMMENDATION: BUY




52 Week High/Low 125.80/55.50

M.Cap (Rs. in Cr.) 1586.09

EPS (Rs.) 2.99




Stock Exchange BSE

VALUE PARAMETERS


Foreign 6.13

Institutions 7.58


Promoters 52.43



P/E CHART

13

INVESTMENT

VIP Industries is Asia's No. 1 luggage manufacturer. It has four factories,

which produce nearly five million pieces a year, making it the second

largest producer of luggage in the world. The company offers its

products primarily under the brands of VIP, Carlton, Skybags, Caprese,

Alfa and Aristocrat.

FThe company in April has taken avg. price hike of 3-4% and in October, it

has taken price hike of 5% across certain channels. The management is

looking revenue growth of 10-12% in FY15.

FThe Company successfully launched Ladies Hand Bags category under

the brand "Caprese" in October 2012, currently it is now available at

500 stores across the country, across several distribution channels,

including select Company-run exclusive brand stores, franchisee

stores, multi brand dealers and leading Departmental chains like

Shoppers Stop, Lifestyle and Central, and also in e-commerce sites. The

management expects sales of Rs 34 crore in FY15 and Rs 50 crore in

FY16 from Caprese. Carlton - premium brand is doing well. Skybag is

also growing faster.

FThe management will do aggressive advertisement for Carlton and

Caprese in H2. However, adverstisement- spend was under control in

H1.

FThe company's subsidiary in Bangladesh is presently operating at 60%capacity and expects to run at 100% by end of this fiscal year. Since

labour wages are going up in China, so outsourcing from China would

not be cheaper, going forward. So, the company has setup subsidiary in

Bangladesh from where it can source its soft luggage.

FThe company will benefit from its national presence, strong brands,

presence in all price categories, constant innovation and new launches.

Over the past few years, consumers in India have preferred wheel,

trolley suitcases and lightweight soft luggage.

RATIONALE

F

Valuation

Actual Estimate


Revenue 968.40 1,076.60 1,228.60

EBITDA 82.60 105.40 144.20

EBIT 65.60 81.34 117.50

Pre-tax Profit 64.00 84.39 121.50

Net Income 41.90 61.35 86.95

EPS 2.98 4.10 6.19

BVPS 20.31 22.15 24.50

ROE 15.40 19.20 25.20

(Rs.in Cr.)

FINANCIAL PERFORMANCE

The company enjoys strong brand recognition and has dominant

market share in the Indian luggage industry. Recent price hike and

increasing demand for sophisticated modes of travelling by the Indians

augar well for the company's growth prospect. Moreover, the company

generally report healthy third quarter number due to wedding and

festive season, when the demand for the company's product is huge. We

expect the stock to see a price target of Rs 149 in 8 to 10 months time

frame on a three year average P/E of 24x and FY16 (E) earnings of

Rs.6.19.


0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

27-Dec-11

31-Jan-12

6-Mar-12

13-Apr-12

18-May-12

22-Jun-12

27-Jul-12

4-Sep-12

10-Oct-12

16-Nov-12

24-Dec-12

29-Jan-13

5-Mar-13

11-Apr-13

20-May-13

24-Jun-13

29-Jul-13

4-Sep-13

11-Oct-13

19-Nov-13

24-Dec-13

29-Jan-14

6-Mar-14

11-Apr-14

22-May-14

26-Jun-14

1-Aug-14

9-Sep-14

20-Oct-14

27-Nov-14


8/10/2019 Top Picks for 2015

14/14

SMC Global Securities Limited is proposing, subject to receipt of requisite approvals, market conditions and other considerations, a further public offering of its equity shares and has filed the Draft Red Herring Prospectus with the Securities and Exchange Board of India (SEBI) and the Stock

Exchanges. The Draft Red Herring Prospectus is available on the website of SEBI at www.sebi.gov.in and on the websites of the Book Running Lead Manager i.e., ICICI Securities Limited at www.icicisecurities.com and the Co- Book Running Lead Manager i.e., Elara Capital (India) Private Limited at

www.elaracapital.com . Investors should note that investment in equity shares involves a high degree of risk and for details relating to the same, please see the section titled Risk Factors of the aforementioned offer document.

Disclaimer:This report is for the personal information of the authorized recipient and doesn't construe to be any investment, legal or taxation advice to you. It is only for private circulation and use .The report is based upon information that we consider reliable, but we do not represent that it is accurate or

complete, and it should not be relied upon as such. No action i s solicited on the basis of the contents of the report. The report should not be reproduced or redistributed to any other person(s)in any form without prior written permission of the SMC. The contents of this material are general and are neither

comprehensive nor inclusive. Neither SMC nor any of its affiliates, associates, representatives, directors or employees shall be responsible for any loss or damage that may arise to any person due to any action taken on the basis of this report. It does not constitute personal recommendations or take

into account the particular investment objectives, financial situations or needs of an individual client or a corporate/s or any entity/s. All investments involve risk and past performance doesn't guarantee future results. The value of, and income from investments may vary because of the changes in the

macro and micro factors given at a certain period of time. The person should use his/her own judgment while taking investment decisions. Please note that we and our affiliates, officers, directors, and employees, including persons involved in the preparation or issuance if this material;(a) from time to

time, may have long or short positions in, and buy or sell the securities thereof, of company (ies) mentioned here in or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company (ies)

discussed herein or may perform or seek to perform investment banking services for such company(ies) or act as advisor or lender/borrower to such company(ies) or (c) may have any other potential conflict of interest with respect to any recommendation and related information and opinions. All

disputes shall be subject to the exclusive jurisdiction of Delhi High court.

E-mail: [email protected]

Corporate Office:

11/6B, Shanti Chamber,

Pusa Road, New Delhi - 110005

Tel: +91-11-30111000

www.smcindiaonline.com

Mumbai Office:

Dheeraj Sagar, 1st Floor,

Opp. Goregaon sports club, link road

Malad (West), Mumbai - 400064

Tel: 91-22-67341600, Fax: 91-22-28805606

Kolkata Office:

18, Rabindra Sarani,

"Poddar Court", Gate No. 4,

4th Floor, Kolkata - 700001

Tel: 91-33-39847000, Fax: 91-33-39847004

SMC Research also available on Reuters

SMC Global Securities Ltd. (hereinafter referred to as SMC) is a registered Member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited and its associate is member of MCX stock Exchange Limited. It is also registered as a Depository Participant with CDSL and NSDL. Its

associates merchant banker and Portfolio Manager are registered with SEBI and NBFC registered with RBI. It also has registration with AMFI as a Mutual Fund Distributor.

SMC is in the process of making an application with SEBI for registering as a Research Entity in terms of SEBI (Research Analyst) Regulations, 2014. SMC or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing /dealing in securities Market.

SMC or its associates including its relatives/analyst do not hold any financial interest/beneficial ownership of more than 1% in the company covered by Analyst. SMC or its associates and relatives does not have any material conflict of interest. SMC or its associates/analyst has not received any

compensation from the company covered by Analyst during the past twelve months. The subject company has not been a client of SMC during the past twelve months. SMC or its associates has not received any compensation or other benefits from the company covered by analyst or third party in

connection with the research report. The Analyst has not served as an officer, director or employee of company covered by Analyst and SMC has not been engaged in market making activity of the company c overed by Analyst.

The views expressed are based solely on information available publicly available/internal data/ other reliable sources believed to be true.

SMC does not represent/ provide any warranty express or implied to the accuracy, contents or views expressed herein and investors are advised to independently evaluate the market conditions/risks involved before making any investment decision.

SMC Research Desk

top picks for 2015

Documents