Summit Securities is the holding company of the RPG–Harsh Goenka Group, and has been seeing an uptick in its stock price since the beginning of March 2017, as the companies in its portfolio have shown strength. Summit Sec has holdings in CEAT Limited, KEC International, RPG Life Sciences, Zensar Technologies, Harrisons Malayalam and STEL Holdings.
CEAT Limited, India's fourth largest tyre manufacturer, has been a fair performer in the past few quarters, although Q3 found the firm taking a hit from demonetization. Summit holds 2.37% of CEAT. The tyre manufacturer has been gaining strength, with deep market distribution and an expected doubling of production capacity for the passenger car market. The company's share price has been trading above all its SMAs, with analysts like Motilal Oswal and Chola Wealth giving the stock a buy rating, in expectation of capacity driven growth in FY18. A much awaited decline in rubber prices has also given the entire tyre industry a boost, which will help CEAT's margins in the coming quarters.
KEC International,where Summit Securities holds a 10.74% stake (Summit increased its stake in KEC from 10.5% to 10.74% between December '15 and '16), has an order book which in Q3 FY17 was up 24% YoY, giving the company a clear growth horizon for the coming quarters. Order backlog has hit a lifetime high according to KEC - it stands at at 1.3x times of the company's order sales in FY16. Customers are investing in transmission and distribution infrastructure, which means the market for the company is set to remain healthy in FY18.
Relatively, RPG LifeSciences, in which Summit Securities holds over 10.8% stake, and Harrisons Malayalam where it hods 3.95%, have performed underwhelmingly - RPG had a sharp decline in Q3 FY17 in both overall revenues and profits, and HM has had several underwhelming quarters in a row. IT company Zensar Technologies however, has logged in respectable growth in the past few quarters, and on 31st March it also announced that it would acquire Bengaluru-based retail technology provider Keystone Logic Solutions and its US subsidiary for Rs 132.4 crore, to boost its retail tech solutions. Summit holds a nearly 11% stake in Zensar.
CEAT and KEC are in particular, in sectors that look rosier in FY18 than the previous year, thanks to strong growth that is expected in the auto and infrastructure sector. Both have put Summit up going into FY18.