The LKP research wing confirms that India by far is best placed in the present down-cycle which has engulfed most emerging economies. The early Diwali surprise by the RBI governor would definitely trigger a lot of positive momentum across the corporate industry over the medium term. Coupled with Cooling Oil and Commodity prices and lower subsidies and higher indirect tax revenues should enable the Government of India to meet its fiscal deficit target for this fiscal despite measures like One Rank, One Pension. With all these things factored, LKP Securities remain constructive on Indian Equities as India remains one of the few economies in the globe which can grow at 7.5%
Bank of Baroda
Picked due to a good consumer franchise and key metrics which have not deteriorated much in the midst of challenging business environment.
DCB with a market capitalization of 4000cr is well capitalized with a capital adequacy of more than 14% and has a strong presence in Maharashtra & Gujarat. Mortgage loans continues to be the priority for DCB. Expecting DCB to grow its balance sheet by 23% this year and the bank does not need capital to grow for FY15-16.
Jubilant Food Works
JFW is a proxy play on the growing consumption theme in India since it has a dominant 72% market share in the Indian Pizza market with more than 920 outlets. JFW has now opened more than 60 outlets for Dunkin Donuts and has begun the current fiscal well with a 20% growth in revenues and EBIDTA with a Same Store Growth of 4.6%
KEC International play the growth story in power transmission & distribution and Railways in India. With the low margin legacy orders behind the on-going domestic capex in T&D would in our view boost the order intake for KEC going forward
Larsen & Toubro
L&T to play the Engineering, Construction & Infrastructure theme in India and is a proxy to the revival in investment cycle and traction in Defence & Aerospace. With its order backlog at the end of the first quarter growing at more than 20% we are positive on the outlook going forward given its management bandwidth and execution capabilities.
New Business Opportunities arising from the Skill India program of the GOI and the re-structuring initiatives at two of its divisions – School Learning & Corporate Learning should in our view enable a business transformation and propel NIIT going forward.
Supreme Industries is the market leader in plastic processing with a strong brand equity and product portfolio. In our view the company is a prime beneficiary of declining crude oil prices. Supreme has an un-matched distribution network in India and has more than 25 manufacturing locations across the country. Its management bandwidth and track record of posting consistent growth is quite impeccable and is our pick to play the theme of softening oil prices
Leading Brokerage House LKP Securities has come up with 7 picks in its latest research report. The Head Research at LKP, Mr. Mr. S Ranganathan and Head Advisory at LKP of Mr. Kunal Bothra are very confident about Indian Economy going forward. They point out that there are a lot of interesting developments which have occurred in the recent times even thought market had lot of ups and downs. Global concerns have never been so visible in the recent past, and with bounties of concerns over China, sovereign downgrades of countries like Brazil etc, Currency crisis etc. Along with it the FED maintaining status quo and the RBI cutting rates despite a 14% deficiency in the monsoon it is quite evident that slowing global growth is uppermost in the mind of central bankers.
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