EquityPandit- 9 Wealth Creator Stocks For Long Term

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Stocks That Would Create Wealth In Long Term

Large Cap Recommendations

Mid Cap & Small Cap Recommendations

Date: Sunday, June 22, 2014


LARGE CAP RECOMMENDATIONS

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LARSEN & TOUBRO LIMITED

Current Market Price: Rs.1647

Larsen & Toubro is a company from Infrastructure sector. The current market

capitalisation stands at Rs 154,587.21 crore. The company has reported standalone

sales of Rs 20,079.10 crore and a Net Profit of Rs 2,723.48 crore for the quarter ended

Mar 2014.

It is expected that stocks will do well with revival of Indian infrastructure story.

If we add up dividends with price then it gives more than 35% average returns YOY

basis.

Share holding pattern suggests FII keep increasing their holding in the company while

retailers holding keep decreasing.

Mar-14 Dec-13 Sep-13

Promoter -- -- --

FII 18.47 17.85 15.25

DII 36.60 36.61 37.36

Others 44.93 45.54 47.39

Total 100.00 100.00 100.00

L&T continues to benefit with its diversified presence across various verticals of the

infrastructure sector. The same has kept it in good stead when all other infrastructure

companies are facing headwinds in gaining traction in order flows. Contrary to consensus

estimates the company has maintained its margins in the infrastructure orders. We

believe L&T's ability to grow its order book while maintaining its margins is likely to keep

the stock in good humour. We maintain our Accumulate rating on the stock.

At CMP, we recommend buying L&T with a target of 2000 in next six months & 2400 over

the year.

This stock would create wealth for investor, if invested for long term.


LUPIN LIMITED


Lupin is a company from Pharmaceuticals sector. The current market capitalisation stands at Rs

44,802.18 crore. The company has reported a consolidated sale of Rs 3,051.55 crore and a Net

Profit of Rs 563.01 crore for the quarter ended Mar 2014.

Headquartered in Mumbai, Lupin is an innovation led transnational pharmaceutical company

producing and developing a wide range of branded and generic formulations and APIs. The

Company is a significant player in the Cardiovascular, Diabetology, Asthma, Pediatric, CNS, GI,

Anti-Infective and NSAID space and holds global leadership positions in the Anti-TB and

Cephalosporin segment. Lupin is the 5th largest and fastest growing top 5 generics player in the

US (5.3% market share by prescriptions, IMS Health) and the 3rd largest Indian pharmaceutical

company by sales. The Company is also the fastest growing top 10 generic pharmaceutical

players in Japan and South Africa (IMS).

With dividend story it gave 28% returns YOY. It is very important to note that during market Bull

Run, it has seen very slow up-move and during bad time Lupin has seen sharp positive

movement. That’s the beauty of Lupin.

Shareholding pattern suggests that despite pressure in pharma shares, DII keeps increasing their

holding while FII slightly lowered their holdings.


Promoter 46.75 46.76 46.78

FII 31.86 31.92 31.45

DII 11.31 11.30 12.07

Others 10.08 10.02 9.70

Total 100.00 100.00 100.00

We strongly recommend Lupin to buy at CMP with a target of 1100 over next six month & 1400

by over one year timeframe.

It would act as a defensive stock in your portfolio and if invested for longer timeframe, it would

definitely create wealth.


TATA CONSULTANCY SERVICES LIMITED


TCS is a company from IT (Software) sector. The current market capitalisation stands at Rs

435,905.12 crore. The company has reported consolidated sales of Rs 21,293.96 crore and a Net

Profit of Rs 5,377.31 crore for the quarter ended Dec 2013.

The Management reiterated that it expects FY2015 to be better than FY2014 on the back of

strong pipeline and budget indications from clients. A healthy pipeline, broad-based deal signings,

initial signs of up-turn in discretionary spending and good traction in annuity, traditional and

transformational business - all these factors have collectively lent confidence to the company in

estimating FY2015 to be a better year than FY2014. TCS also indicated that it is reaping benefits

of investments in geographies such as Continental Europe and Latin America. The Management,

however, cited a word of caution on India business, which it expects to remain muted till

1HFY2015 due to impending elections. Over FY2013-15E, we expect TCS’ revenue to post a

CAGR of 16.5% in USD terms and of 24.3% in INR terms.

TCS gave more than 25% returns YOY basis. Despite rupee appreciation TCS saw minor

correction & stabilized around 2100-2200 levels. We strongly believe that despite rupee

appreciation, TCS margin won’t be affected much.

Recent shareholding pattern shows like FII holding decreased marginally while DII increased their

holdings in share.


Promoter 73.90 73.90 73.96

FII 16.11 16.33 16.09

DII 5.36 5.26 5.58

Others 4.63 4.51 4.37

Total 100.00 100.00 100.00

With CMP we strongly recommend buying TCS with target of 2500 over six months & 2800 over

year.

It would act as a defensive stock in your portfolio and if invested for longer timeframe, it would

definitely create wealth.


RELIANCE CAPITAL LIMITED


Reliance Capital is a company from Finance-Investments sector. The current market

capitalisation stands at Rs 15,143.76 crore. The company has reported consolidated sales of Rs

1,774.00 crore and a Net Profit of Rs 239.00 crore for the quarter ended Mar 2014.

Reliance Capital is a key financial services company of the Reliance ADAG group with interests

in insurance (life and general), asset management, consumer loans, private equity and

brokerage. In the insurance space, Reliance Life is growing faster compared with private

insurance companies. Reliance Mutual fund is one of the largest AMCs in the country with

>100000 crore of assets under management.

In past, company had underperformed but now as financial markets revive, we believe that

Reliance Capital will be the biggest beneficiary. FDI in insurance will unlock major value in

company.

Shareholding pattern suggest DII/FII decrease their holding but by keeping future aspects of the

company we believe FII holding will increase substantially going forwards.


Promoter 54.14 54.14 54.14

FII 20.29 20.82 20.31

DII 5.36 5.37 5.15

Others 20.21 19.67 20.40

Total 100.00 100.00 100.00

At CMP, we recommend buying in Reliance Capital with a target of Rs.800 over 6 months &

Rs.1000 over one year.



YES BANK LIMITED


Yes Bank is from Banks - Private Sector. The current market capitalisation stands at Rs

22,518.77 crore. The bank has reported a standalone Net Interest Income of Rs 2,568.05 crore

and a Net Profit of Rs 430.21 crore for the quarter ended Mar 2014.

Yes bank has best NPA, lowest among peers group. It has best balance sheet in private banks

and best management practice in banking industries.

Recent shareholding pattern shows huge FII interested in company and we firmly believe that as

economy cycles revives Yes bank will grow fastest in banking sector.

Jun-14 Mar-14 Dec-13

Promoter 22.23 25.55 25.56

FII 45.31 37.98 39.56

DII 20.34 20.97 19.26

Others 12.12 15.50 15.62

Total 100.00 100.00 100.00

We recommend strong buy on Yes Bank at CMP with a target of Rs.720 over six months &




MIDCAP AND SMALLCAP RECOMMENDATIONS



FINOLAX CABLES LIMITED


Finolax Cables is in the Cables - Telephone sector. The current market capitalisation stands at

Rs 2,564.79 crore. The company has reported standalone sales of Rs 642.49 crore and a Net


In the past Finolex cables gave 30% return YOY. With change in economy & power sector

revival, we believe that Finolex will be one of the biggest beneficiaries.

We expect the company’s top-line and EBITDA to post a 13.1% and 14.3% CAGR over

FY2014–16E to Rs.3,017cr and Rs.323cr respectively with EBITDA margin stabilizing at 10.7%

in FY2016E. The bottom-line is expected to post a CAGR of 11.7% for the same period due to

relatively lower tax outgo. Though the Communication cables (CC) segment has started

reporting strong performance, the Electrical cables segment, which is considered to be a stable

business of the two, is yet to witness a rebound in performance

Shareholding pattern clearly suggest strong buying from FII/DII. Also promoters increased their

stack in the company.


Promoter 35.86 35.78 35.78

FII 5.51 1.80 1.10

DII 10.60 9.88 10.21

Others 48.03 52.54 52.91

Total 100.00 100.00 100.00

At CMP, we recommend buying in Finolax cables with a target of Rs.230 in next six months &




AMARA RAJA BATTERIES LIMITED


Amara Raja Batteries is in the Auto Ancillaries sector. The current market capitalisation stands

at Rs 8,218.64 crore. The company has reported standalone sales of Rs 885.14 crore and a Net


The beauty of this stock is that it never saw bear market. On YOY, it gave over 40% returns

including dividend.

Amara Raja Batteries (AMRJ) has emerged as a formidable challenger to leader Exide

Industries (EXID), with leadership in telecom (46% share) and UPS (32% share) segments.

AMRJ is gearing up to be a leader through a combination of i) consolidating in existing areas, ii)

entering new business opportunities within battery space, mainly home UPS, Solar and Motive

Power and iii) aided by capacity and network expansion.

Within 25 years of operation, AMRJ has become India’s second-largest lead-acid Battery player

with market leadership in telecom and UPS segments.

Shareholding patterns clearly suggest interest of FII’s in the company while DII reduced their

holding in the company.


Promoter 52.06 52.06 52.06

FII 15.02 13.35 11.08

DII 11.58 12.75 14.96

Others 21.34 21.84 21.90

Total 100.00 100.00 100.00

With CMP, we recommend buy Amara Raja Batteries with a target of Rs.600 over next six

month & Rs.800 over one year time frame.


PARSVNATH DEVELOPERS LIMITED

Current Market Price: Rs.33.75

Parsvnath is in the Construction & Contracting - Real Estate sector. The current market

capitalisation stands at Rs 1,420.87 crore. The company has reported a consolidated sales of

Rs 89.38 crore and a Net Loss of Rs -26.73 crore for the quarter ended Mar 2014.

Company was a Continues under performer as real estate sector was in pressure. We believe

that over the period of time, this company will be a turnaround story and can be a potential

multibaggar. With revival in Indian infrastructure, we firmly believe that real estate cycle will also

revive.

Share holding pattern suggests promoter keeps increasing their stake in the company which

shows confidence of promoters in the company.


Promoter 74.22 73.63 73.16

FII 10.62 10.66 11.04

DII 0.11 0.10 0.17

Others 15.05 15.61 15.63

Total 100.00 100.00 100.00

At CMP, we believe that if one can hold the stock for one year it could double. We recommend

buy at CMP with a target of Rs.45 over next six months and Rs.64 over one year.


HIND DORR-OLIVER LIMITED


Hind Dorr-Olive is in the Engineering sector. The current market capitalisation stands at Rs

127.31 crore. The company has reported standalone sales of Rs 56.74 crore and a Net Loss of

Rs 35.02 crore for the quarter ended Mar 2014.

Company once called as mini L&T but vanished in year 2008 slowdown due to UPA

Infrastructure policies. This reflects in the company’s performance.

Currently company’s main plant is situated in Ahmedabad & company has some good

expansion plan in Dahej. Company recently collected Rs.100 crore from the market. Company

will revive, once government will start taking actions on infra space.

Company made low around Rs.7 & doubled in Modi rally. There is very limited down side in the

company & huge upside can be seen, if government meets market expectation.

Shareholding pattern shows DII keeps decreasing their holding while FII keeps holding steady.


Promoter 55.28 55.28 55.28

FII 3.60 3.60 3.60

DII 8.36 9.48 9.73

Others 32.76 31.64 31.39

Total 100.00 100.00 100.00

With CMP, we recommend buying in Hind Dorr-Oliver with a target of Rs.25 over next six month

& Rs.36 over one year.


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