This preview shows page 1. Sign up to view the full content.
Unformatted text preview: profitability. The pac e of m arket s hare gain will ac c elerate as it grows m uc h
fas ter than the s ys tem . The m edium -term m argin outlook is enc ouraging. Sus tained
effic ienc y gains and c ontinuanc e of benign c redit c os ts will enable the bank to m aintain high
return on as s ets . If m ac roec onom ic c onditions deteriorate, the bank's valuation prem ium will
expand further. FM CG & CONSUM ER DISCRET IONARY
"W e retain our 's ell' s tanc e on m os t fas t m ov ing c ons um er goods
firm s "
Rak s hit Ranjan, Senior Analy s t, Ins t Equities , Am bit Capital
Stoc ks of m os t c ons um er s taples c om panies have fallen 10-15%
over the pas t three m onths . W e expec t the trend to c ontinue as
earnings growth s lows due to (a) ris e in c om petition and weak
ec onom ic environm ent; (b) unlikely m argin expans ion from the c urrent high bas e and; (c )
high advertis ing and prom otion s pends to fight c om petition am id lim ited s c ope for inc reas ing
pric es . Given the expens ive valuations (average 29.7 tim es 2014-15 earnings ), we retain our
's ell' s tanc e on m os t fas t m oving c ons um er goods firm s , with Hindus tan Unilever being our
top 's ell'.
However, we prefer c om panies in entry-level dis c retionary c ons um er s egm ents s uc h as
footwear, kitc henware and paints that have s us tainable c om petitive advantages . This is due
to the following c harac teris tic s of thes e s egm ents :
a) low penetration levels ;
b) c ons is tenc y of dem and; and
c ) relatively les s intens e c om petition with three-four large players c ontrolling 70-80% m arket
in their res pec tive s egm ents . businesstoday.intoday.in/stor ypr int/201839 5/18 1/2/14 M ar ket exper ts on what to expect fr om var ious sector s in 2014 : Business Today Bata
T arge t price : Rs 1,083
Bata's bigges t s trength is its em ployee inc entive s truc ture that c reates an entrepreneurial
c ulture. It has widened its produc t bas e and is now foc us s ing on im proving brand
c om m unic ation and inventory m anagem ent, bes ides introduc ing new retail form ats , in 2014
and 2015. W e expec t 17% and 20% a year growth in revenue and earnings per s hare,
res pec tively, between 2012 and 2015.
T T K Pre stige
T arge t price : Rs 3,799
Near-term headwinds s pec ific to Tam il Nadu and Andhra Prades h and a high bas e effec t due
to s tellar s ales of induc tion c ook tops in the third quarter of 2012-13 are likely to ens ure
s lower growth during the third quarter of 2013-14. However, the c ons equent fall in the s toc k
pric e will offer inves tors an attrac tive entry point. The c om pany is on a high growth trajec tory
with s us tainable advantages over c om petition in innovation, dis tribution and brand rec all. W e
expec t earnings growth m om entum to revive from January-June 2014 onwards . OIL & GAS
"Crude oil pric es are ex pec ted to hov er between $95 and $112 in
Sudip Bandy opadhy ay , Pres ident, Des tim oney Sec urities
The year 2014 is expec ted to be a landm ark f...
View Full Document
This document was uploaded on 02/06/2014.
- Spring '14