stock selection - india

8/10/2019 Stock Selection - India

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The Top 20 Stocks

25-08-2014 3Stock Selection

Company CAGR Sales CAGR PAT P/E Ratio Ent. Value Retention R

Mahindra &

Mahindra Ltd.22% 23% 24.5 8,20,742 75%

Motherson Sumi

Systems Ltd.62% 37% 56.0 3,23,684 69%

Eicher Motors Ltd. 31% 51% 443.5 2,62,664 87%

Amtek Auto Ltd. 26% 24% 16.1 1,01,236 97%

Lupin Ltd. 24% 30% 19.2 5,59,398 84%

Aurobindo Pharma

Ltd.21% 63% 15.7 2,65,598 83%

TorrentPharmaceuticals Ltd. 20% 29% 16.8 1,40,475 48%

Ajanta Pharma Ltd. 28% 56% 22.8 56,606 85%

Adani Ports & SEZ

Ltd.34% 32% 33.1 7,00,155 86%

J S W Energy Ltd. 37% 23% 17.8 1,70,229 58%


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The Top 20 Stocks


Company CAGR Sales CAGR PAT P/E Ratio Ent. Value Retention R

Bajaj Holdings & Invst.

Ltd.66% 23% 20.0 1,04,530 -28%

Godrej Properties Ltd. 42% 26% 35.9 54,570 81%

Titan Company Ltd. 23% 35% 43.1 3,21,794 70%

Godrej ConsumerProducts Ltd.

40% 36% 56.5 3,15,853 77%

United Breweries Ltd. 21% 38% 86.1 2,05,752 86%

Astral Poly Technik

Ltd.42% 41% 54.2 47,848 95%

Tata ConsultancyServices Ltd.

24% 29% 24.6 46,78,316 64%

H C L Technologies Ltd. 20% 25% 18.7 10,91,089 76%

Tech Mahindra Ltd. 33% 25% 23.9 5,16,103 91%

Persistent Systems Ltd. 23% 30% 20.4 45,190 78%


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Final Shortlisting Criteria

From the Top 20, stocks were individually

studied on parameters such as

Growth opportunities & Likelihood of growth

Earnings quality

Return on Equity & Its de-compisition

Relative performance to peers in the industry

Stock price trends

Risk associated with the stock



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Stock Price Movement

25-08-2014 Stock Selection 8


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Companies Not Selected

Company Reason for not selectingTata Consultancy

Services

-Growth expectations are already very high

and built into the current stock price

Persistent Systems -Outsourced Product Development a major

revenue contributor is very competitive

market & overall spend on OPD likely to

reduce

-Stock price doubled in past 1 year. Maybe

overvalued

Tech Mahindra -Growth in Sales not translating into

corresponding growth in PAT



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Adani Ports & SEZ Ltd

Logistics venture of Adani Group (Mundra Port& SEZ)

Strong earnings quality (34% CAGR in Sales &

32% CAGR in PAT)

~85% of profits retained for growth

Mar 14 Mar 13 Mar 12 Mar 11 Mar 10

Net Worth 39.28 28.41 21.61 23.11 18.45

Sales 29.30 35.42 31.66 35.37 22.68

PAT 14.94 49.01 19.38 40.69 52.02

Rate of Growth



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Company Reason for not selecting

JSW Energy - Very high sales growth but not translating

into corresponding PAT growth

Godrej Properties -Relatively small player in the industry.

Unlikely to outperform industry growth

Bajaj Holdings &

Investment Pvt Ltd

-Slow growth in auto industry

- High dividend payout (low growth

opportunities)



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Godrej Consumer Products Ltd.

Low Beta Value: Indicates The Stocks Are Less Risky

Dividend Yield Is On The Higher Side

An equitable increase in Pat corresponding to an increase in Sales

MPS Is High But So Is EPS And DPS Indicating Value For Money

Growing Rapidly: The Company's Revenue Has Doubled To Rs 7,823 Crore In

2013/14 From Rs 3,643 Crore In 2010/11 Innovation And Expansion: Almost 30 Per Cent Of Gcpl's Revenue In The Past Year

Has Come From New Products

Future Plans: We Want To Be 10 Times Our Current Size 10 Years From Now

Nisaba Godrej

P/E Beta Alpha Div Yield dps EPSValue 56.46 0.38 0.73 0.54%. 5 16.99

Year Mar 14 Mar 13 Mar 12 Mar 11 Mar 10 Mar 09

PAT 8193 8454.3 7512.4 5147.1 3395.9 1732.6

Sales 78229.4 66244.1 49866.1 37758.9 20842.8 14391.7

Rate of Growth



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United Breweries Ltd.

-High Beta (0.91) but significantly low dividend yield at

0.12%.

-High PE ratio of 86.13

-High risk

-Negative sentiments

Astral Poly Technik Ltd.Highest Beta (0.99) but significantly low dividend yield at

0.08%

Titan Company Ltd.

-A good Company to Invest in but Beta is quite high as

compared to GCPL with a marginally high Dividend Yield

hence Godrej was more secure



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Motherson Sumi Systems Ltd

High growth potential industryAuto Anciallary

Stock P/E Values close to industry P/E values

Debt/EquityNot highly leveraged companies

The dividend yieldSimilar as compared to Peers PAT and Sales CAGR for last 5 years


Stocks Price P/E P/B Beta Div Yield EPS

MothersonSumi 358 56.01 15.76 0.64 0.56% 6.4


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Eicher Motors - Very high Stock Price considering future

growth prospects

Mahindra &Mahindra Ltd

- Hasnt achieved the kind of growth in

others have achived.

Amtek Auto - Fluctuating Stock Prices



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Thank You


stock selection - india

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