Sunday, July 11, 2010
The BSE Sensex & the S&P CNX Nifty are poised to hit a new 52-week high next week. Global cues are strong with Dow Jones closing in the green for three consecutive days and the SGX Nifty closing above 5,360 in off-market deals on the Singapore Exchange on Friday.
South-based jewellery retailer Thangamayil Jewellery has introduced one, two and three-year fixed deposit schemes at interest rates of 10, 11 and 12.5 per cent respectively.
Not content with merely catching up, some mid-cap FMCG stocks have actually moved into a premium over their larger rivals in recent months. At current market prices of Rs 131, Marico Industries now trades at a PE multiple of 33 times its trailing 12-month earnings. Not only is this at a huge premium to a behemoth like Hindustan Unilever (24 times), it is also at the outer boundaries of Marico's own historic valuations. Despite the company's strong fundamentals and quality management, investors should use this opportunity to book profits in the stock.
Investors with a two-year investment horizon can consider fresh exposure to the stock of Bank of Baroda. The bank may continue to grow at higher-than-industry average rate (on the loan book front) and post strong profit growth in relation to most of its peers going forward.
Shareholders can remain invested in the stock of Lupin. Though the stock price has more than doubled since the last ‘buy' recommendation in August 2009, the sustained traction in its formulations exports and an attractive pipeline of products make a reasonable case for remaining invested. That the company has managed to keep up its earnings momentum too provides confidence.
Investors with a long-term perspective can consider an exposure in Mahindra and Mahindra (M&M). The company ended FY-10 on a strong note, posting a growth of 40 per cent in revenues and a whopping 120 per cent in profits over the previous year. Given the high base over which volumes need to grow this year, higher commodity prices and short supply of some auto components, the growth this year (2010-11) is expected to moderate to 12-13 per cent, according to SIAM (Society of Indian Automobile Manufacturers).
Investors with a two-year horizon can buy the shares of broadcast player Zee Entertainment (Zee), given its strong presence in the regional and national (Hindi) general entertainment space. The company is well positioned to drive its advertising revenues, especially after the acquisition of key channels from Zee News, in addition to the improving scenario on the subscriptions front, thanks to direct-to-home (DTH) taking off in a big way.