1. Top performing stocks for 2015: ICICI Bank, IDFC, Maruti Suzuki, more

Top performing stocks for 2015: ICICI Bank, IDFC, Maruti Suzuki, more

For the year 2015, Kotak Securities provides a list of 10 stocks which it expects to do outstandingly well.

Published: December 29, 2014 5:37 PM
ICICI Bank stocks, Maruti Suzuki stocks, BSE Sensex

Stocks of ICICI Bank, IDFC, Maruti Suzuki, TCS are among top performing stocks. (AP)

ICICI Bank: TP – Rs.390

ICICI Bank has continued to demonstrate its prowess in improving ALM, maintaining robust liability franchise, managing asset quality risk along with conserving capital. We believe management’s focus on stable growth with improving structural profitability is likely to continue. We value standalone business at Rs.314 (2.0x FY16E ABV) and subsidiaries at Rs.76.

IDFC: TP – Rs.172

IDFC is present in the niche infrastructure financing space and is well positioned to benefit from India’s large infrastructure opportunity. We believe, falling wholesale funding rates along with improvement in the outlook on capital market related business are future catalyst for the stock. We like its balance sheet quality where loan loss provision ratio stands robust at 3.6% (Q2FY15), providing enough cushion to its future earnings.

Maruti Suzuki: TP – 3644

We expect domestic passenger vehicle industry to do well in the next two to three years. Revival in small car demand and new launches will be the key volume growth drivers for the company. Margins, going ahead, will receive support from reduction in discounts and economies of scale. Apart from this, forex movement has also been favorable for the company and that should be positive for the margins

TCS: TP – 2786

Spends in Digital are also growing in line with expectations. In the past several quarters, TCS has reported industry – leading growth rates with sustained margins.

The global economic scenario has improved, especially in USA. While Europe is seeing deceleration in growth, the scenario may not deteriorate significantly, we believe.

L&T: TP – 1762

Pace of order intake has been good and should enable the company to meet its order intake guidance for the fiscal. L&T continues to be one of the best plays on infrastructure development in the country. In addition to this, the company would be a major player in upcoming opportunities in Defence, High Speed Rail and Shipbuilding.

Kansai Nerolac: TP – 2400

Improvement in automotive demand should benefit KNPL significantly. We also estimate KNPL to improve market share in the high margin decorative segment (currently at 15% in the country) which should aid the margins of the company. Weak crude prices and weakening prices of crude derivatives including key raw material Titanium Dioxide, which is down by 15% YoY, should improve the margins and return ratios of the company going forward.

Carborandum Universal: TP – 240

Carborundum Universal enjoys leadership position in the domestic abrasives market along with strong positioning in global electro-minerals and industrial ceramics market. It is well poised to benefit from the improved industrial outlook. Company would likely witness sharp recovery in operating margins on back of restructuring in the international business, going ahead.

Kajaria Ceramics: TP – 648

Kajaria ceramics is ideally positioned to capture the increased demand coming from housing development, development of smart cities and industrial corridors and the focus of government on Swatch Bharat Abhiyaan, with its capacity expansion plans. Along with this, company is also likely to benefit from GST implementation.

EIL : TP – 300

EIL enjoys leadership positioning in Indian hydrocarbon consultancy business. It would benefit from recovery in capex cycle by various upstream/downstream companies over the next few years. EIL has also been diversifying business into other geographies which would add to revenue stream going ahead.

Geometric: TP – 146

The management has undertaken several restructuring initiatives to improve growth, bring in predictability as well as sustain margins. These initiatives are expected to lead to improved revenue growth over the next few quarters. The order booking over past four quarters and the strong pipe-line make us optimistic on future growth prospects.

By Kotak Securities

  1. Veronica Sachs
    Feb 17, 2015 at 3:25 am
    Take a look at Piramal Ent. is a promising company with 19% ROE and from my point of view 20-30% upside for the stock price even at 19x EV/EBITDA valuation. Warburg Pincus - one of the biggest and most experienced PE funds - is still a long term investor in the company. You can find a longer discussion for investors at EL/
    Reply
    1. Veronica Sachs
      Feb 17, 2015 at 3:26 am
      intwits com
      Reply
      1. H
        Harry Potter
        Dec 29, 2014 at 10:22 pm
        L&T buzzer - Dear Investor - Watch Out - L&T top-bres were on selling spree March-2014, leading the pack Chairman Mr Naik sold his L&T shares (Rs 1200 apiece) worth 70 crores in 20 days - March 2014. Post Q1-2014 results L&T share has seen biggest intraday decline of 8 % since July 2009, Citi Group had raised multiple red flags on earnings. Hydrocarbon subsidiary suffered losses of 900 crores, sans stake at Dhamra Port (2500 crores) L&T would have posted losses. Modi Euphoria and upbeat in market saved L&T going below Rs 1300 during q2, a striking closed range of 1200 of March 2014. Part stakes at L&T Inra sold to Canadian FII - (2000 crores). Expecting VGF - Viability Gap Funding) of 3000 crores to complete Hyderabad Metro. Stake or post losses, Deep Sea or devil? Post Q2 results L&T share plummeted from high of 1673 to low of 1450 (17 Dec, 2014). By the time Q3 results are out would reach 1200 (top-bres sell price), post q3 another 8 % plunge - by Feb-2015, 5 year low of 600?------------------------------------------------------------------------Expensive CXO Maha-Kumbh-Mela at L&T - what is the number of CEOs at L&T and all its subsidiaries (138), their CTC? How far higher, this is to manage L&T group revenues of $a4 bln than Mr Sikka (aged 46) of Infosys highest paid professional CEO (Rs 30 cr) in India, entrusted with business $ 8 bln in revenues and 1.6 lakhs employees. At L&T, just Chairman Mr Naik (aged 72) and group CEO Mr Vankatramanan are pegged at 21 and 14 crores. L&T Infotech - 2 CEOs (left Oct-2014, now looking for two new), 1 COO (Infy CEO Contender. 1 CEO for L&T Tech Services. Infotech is claiming to touch $1 bln revenues since 2010, still not there. Information Age leaders, top-man of TATA, Infosys, Microsoft are in their 40s, why this super 70s at L&T? Chairman Mr Naik’s jaw-dropping musings on succession – “You find a man in the world who will kill himself four times a day, has worked for more than a hundred years-- There is no such person.-- None of us here (at senior level) are working for money”. ----------------------------------------------------------------------Infosys BPO entire top-deck got sacked (or resigned) for failing to comply with the company’s code of conduct. Any CXO/MD level official ever got fired in last 5/10 years or resigned on morals grounds? Please refer TOI article – “whistleblower was right: CBI”. Excerpts – “Golden Quadrilateral Project -- M/s L&T had misrepresented the facts”. BS Article – “Rajya Sabha nods for whistle blowers bill” – excerpts – “Prasad recalled the sacrifice of Satyendra Dubey, an Indian Engineering Service officer who was killed after he tried to reveal corruption in the Golden Quadrilateral”. Please GOOGLE – white collar criminal equivalent of rape and murder- “Cl Action Suit Seeks $100 Million for Pregnancy Discrimination, Other Violations”. Please refer International Business Times article – “$100 Million Sought as New Discrimination, Immigration Violations Complaint Filed against L&T”. Got slapped with ban by World Bank – please refer ET article – “World Bank bars L&T for 6 months over forgery”. --------------------------------------------Biggest shareholders at L&T, state owned LIC/UTI. Ministry of Corporate Affairs, PM Mr Modi, LIC/UTI should intervene to fix retirement age at L&T to 60!!,
        Reply

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