Market experts on what to expect from various sectors in 2014 _ Business Today

T ata ste e l over the pas t three quarters tata

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Unformatted text preview: ons are likely to lim it the downs ide. T ata Ste e l Over the pas t three quarters , Tata Steel has reported a better-thanexpec ted operational perform anc e, es pec ially from its European operations . W e m aintain our pos itive s tanc e on Tata Steel as its earnings growth is likely to be driven by higher s ales volum e on the bac k of 2.9 m illion tonnes expans ion in Jam s hedpur and im provem ent in profitability of European operations . CAPIT AL GOODS "W e s ee big c hanges in the c apital ex penditure c y c le in the nex t 12-18 m onths " Deepak Ladha, Ex ec utiv e Direc tor, Ladderup Corporate Adv is ory It has been es tim ated that India's c apital goods m arket c an grow from $71.7 billion in 2011-12 to $153.3 billion by 2016-17, a ypr int/201839 10/18 1/2/14 M ar ket exper ts on what to expect fr om var ious sector s in 2014 : Business Today c om pounded annual growth rate of 16%. Als o, c apital goods , infras truc ture and power c om panies are likely to benefit from polic ies that the new governm ent (after the 2014 general elec tions ) purs ues to inc reas e ec onom ic growth. Als o, the s ec tor will gain from the s pec ial ec onom ic z ones the governm ent has s anc tioned for the indus try. India's s hare of global c apital goods exports is low (0.1-0.6%). There is a huge potential for growth here. Infras truc ture and c apital goods indic es as well as s elec t s toc ks have rallied s harply of late, partly on expec tations that the NDA will be able to form a governm ent at the Centre next year. On this bas is , we s ee big reform s and c hanges in the c apital expenditure c yc le over the next 12-18 m onths . Kirloskar Oil & Engine s T arge t price : Rs 225 The s toc k m ay get a boos t from expec ted ec onom ic revival, higher governm ent s pending, s trong balanc e s heet, good c as h flow and high return on equity. Als o, the new pollution c ontrol norm s , to be im plem ented s oon, will lead to a 10-15% inc reas e in pric es of engines and 5-7% in pric es of gens ets . Praj Industrie s T arge t price : Rs 60 Praj ac c ounts for 10% of the world's ethanol produc tion. The c as hric h c om pany will benefit from the m andatory ethanol blending in petrol likely to be im plem ented s oon. For this , it is planning to s et up India's firs t plant to m ake new generation ethanol direc tly from agro-was te, a s hift from the traditional m olas s es -bas ed extrac tion. Exports , too, are expec ted to ris e as ypr int/201839 11/18 1/2/14 M ar ket exper ts on what to expect fr om var ious sector s in 2014 : Business Today m ore and m ore c ountries opt for fuel blending. Larse n & T oubro T arge t price : Rs 1,400 W hile high interes t rates and weak ec onom y are likely to have an im pac t, L&T c ontinues to m eet order inflow targets . It is expec ting to rais e Rs 4,200 c rore from s take s ale in L&T IDPL, a s ubs idiary. This will provide L&T the m uc h-needed c as h flow given that it has equity c...
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