With a 123 year history, Britannia Industries Ltd. (BIL) is the country's largest manufacturer and distributor of biscuits, along with bread, rusk, cakes and dairy products. The company operates in two business segments: Bakery Products and Dairy Products. The Bakery Products segment manufactures and markets biscuit, bread, cake and rusk. The Dairy Products segment processes and sells milk, butter, cheese, ghee, dahi, milk-based ready to drink beverages and dairy whitener. With launch new Tiger' biscuits, BIL is expanding its...
Kansai Nerolac Paints (KNPL) is the second largest coating company in India and a market leader in Industrial Coatings, of which automotive paints constitute the majority. It came into existence in the year 1920 as Gahagan Paints and Varnishes Co. Ltd. and through various changes became a wholly owned subsidiary of Kansai Paints, Japan in 1999. It derives ~55% of its revenues from decorative paint and 45% from industrial paint. Within industrial paint, 75% comes from automotive coatings. KNPL has 4 manufacturing facilities with a capacity of 350,000 MTPA and a network of 94 depots. With the RBI's latest rate cut of 50 bps, we expect a pickup in automobile sales, aided by a slew of new launches. With expansion plans in...
Inox Leisure (INOX) is part of the Inox Group and operates as a subsidiary of Gujarat Fluorochemicals Ltd. Starting its journey with a 4-screen multiplex in Pune, it has become the second largest player in the multiplex space with a presence at 96 loactions and 372 screens at the end of FY15. It has acquired 89 Cinemas, Fame Cinemas and Satyam Cineplexes over the period. After a subdued FY15 we expect revenues/PAT of the company to grow at CAGR of 17%/115% respectively over FY15-FY17 driven by higher footfalls, increased F&B; spend and greater focus on in-cinema ad revenues. Given the potential growth in terms of screen additions, ad revenues, ATP and SPH, we assign a BUY rating for...
CCL Products India Limited (CCL), is India's largest manufacturer and exporter of instant coffee products, with a presence in ~60 countries across the world. Its coffee products include pure soluble coffee products comprising spray dried coffee powder and granules, freeze dried coffee, and freeze concentrate liquid coffee. With traction in the overall business, management expects utilization in both India and Vietnam in FY16 to rise to ~75% (~50% in FY15). EBITDAM in Vietnam operations stand at ~25% (~20% in India). With traction in Vietnam operations we expect contribution of Vietnam to top line increasing to 30% in FY17 (22.2% in FY15), leading to overall revenue growth at a CAGR of 24% through FY17. We also...
Optical fiber (or "fiber optic") refers to the medium and the technology associated with the transmission of information as light pulses along a glass or plastic strand or fiber. Optical fiber carries much more information than conventional copper wire and is in general not subject to electromagnetic interference and the need to retransmit signals. With several...
Pidilite Indisutries Limited (PIL) is India's dominant player in the adhesives & sealants segment, with its flagship product Fevicol' and other legacy products (M-Seal, Dr. Fixit, etc) that command ~70% of domestic market share and contributes around 50% to its topline. The Company operates through two major segments Consumer and Bazaar Products and Industrial Products contributing on an average of ~80% and ~20% respectively. We expect PIL to benefit over the near future on the back of (i) the strong Indian consumption story, (ii) rising demand from semi-urban and rural India, (iii) large investment in infrastructure and Housing for All by 2020 and (iv) a foreseeable surge in industrial activity. We expect...
NBCC has moved up significantly since our initial Stock Idea on July 28, 2014 at Rs 465 and reached the target of Rs 750. Now we see further upside in the stock and maintain our BUY rating and raise our target to Rs 1355. NBCC is a debt free company with a strong Order Book which is expected to grow from the current ~Rs 20000 cr to ~Rs 40000 cr by FY17E. The company appears to be set to enter a period very strong growth. With the new Government's focus on the housing sector, along with a strong probability of the company getting the land banks of sick PSUs prior to their sell-off, we believe the Real Estate segment is likely to grow dramatically....
Strong growth with margin improvement in rail logistics: The rail logistics business of the company has witnessed strong growth of 22% in FY15 with margins improving by over 600 bps on back of tariff hikes in Dec-14 and Mar-15. It has also resorted to double stacking of containers to reduce haulage charges. Though volume growth is likely to remain muted in H1FY16 due to increase in tariffs, it is expected to pick up H2FY16. However, with double stacking and higher proportion of imports handle margins are likely to be sustained. Further, government initiatives to set up Dedicated Freight Corridors (DFC) will aid to...
Exposure to fastest growing OEM's like HMSI, RE and TVS to help outperform industry: GIL continues to growth momentum across all segments with revenues growing at a CAGR of 16% (auto ancillary industry CAGR 11%) through FY10-FY15. 2W/3W segment contributes ~63% to GIL's revenue. Indian 2W/3W industry has grown at CAGR of 12% through FY10-FY15. HMCL and BAL have own subsidiaries Munjal Showa and Endurance respectively sourcing most of their requirement internally. Overall outperformance of GIL is attributed to fast growing HMSI, RE, TVS, Yamaha and Suzuki with industry excluding HMCL and BAL growing at a CAGR of 20% through FY10-FY15. HMSI, RE, TVSL and Yamaha, the key OEM's (~52% of FY15 top-line) are lined up...
Since our first coverage of VA Tech Wabag in November 2013 at Rs.487, VATW moved to a high Rs.1944, a growth of almost 300% in less than 18 months. After a bonus of 1:1, the recent correction and subsequent consolidation the stock trades at 22.4x its FY17E earnings...
