Moneycontrol- 10 MID CAP STOCKS.pdf

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Big fish in midcap pond: 10 stocks on Credit Suisse radar

Even as frontline shares have paused for a breather,investors continue to load up on second line shares,betting on them to be relatively undervalued. Brokeragehouse Credit Suisse has listed a set of midcap stocks thatare leaders in relatively small, but growth sectors. The

overall sector growth, rising market share due to theirrelatively dominant position, margin benefits due toincreasing scale and expansion of valuation multiples areseen as the drivers for stock re-rating.

Click on the next slide to find out more...

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Cox and Kings

Rating: Outperform

Current market price: Rs 141Target: Rs 170

Outbound travel, a key focus area for C K, can witnessrobust growth relative to inbound and domestic travel. C KIndia had roughly 30% CAGR between FY06 and FY12due to market share gains from unorganized players. Thisincrease in market share is expected to continue. Highdebt levels remain the key concern in the medium term.

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Dish TV

Rating: OutperformCurrent market price: Rs 81.95Target: Rs 82

India is likely to go the wireless way (the way telephonywent) and a large share of Indias cable satellite (C S)household additions in the next few years will go to DTH.Dish TVs subscriber base is expected to grow by 15% inthe next five years. Over this period, company averagerealization per user is seen growing from about Rs 160 to

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Info Edge

Rating: OutperformCurrent market price: Rs 367Target: Rs 470

Info Edge's naukri.com is the market leader in Indiasonline job board market, with a traffic share of over

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60%.We believe that the online recruitment classifiedsmarket in India is poised for strong growth over the nextfew years driven by a large population in working age,strong growth in Indias GDP, the growing share of theservices sector in Indias GDP, and significant potential forshare gains.

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Kajaria Ceramics


Kajaria is Indias second largest tile manufacturer. Tilepenetration in India is very low and consumption canbenefit from the housing boom and commercialdevelopment in Tier II/III cities and higher consumeraspirations. The stock trades at 12.5 times FY14E

earnings and is at a significant discount to most Indianbuilding product companies and key Asian peers.

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MCX


The scope of increasing penetration is high givensignificantly lower ratio of: (1) commodity to equity trading

and (2) commodity consumed to commodity traded, inIndia as compared to global standards. Wider participationby FIs and Banks could help volume significantly.Additionally, product innovation and changes in derivativeregulations may boost volume on the Indian exchanges.

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McLeod Russel


McLeod Russel is the largest tea producer globally. Indiaand Sri Lanka contribute about 50% of global black teasupplies and can offer little additional supply due tolimited land availability. Global demand, on the otherhand, has witnessed steady growth. We expect black teasupply to lag demand for some time, helping tea prices.

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Apollo Hospitals

Rating: Not ratedCurrent market price: Rs 812.95

Apollo is among the largest hospital chains in India withover 50 hospitals, and sizeable presence in pharmacies. Inaddition to adding beds and facilities at existing hospitals,

Apollo plans to add hospitals in its existing cities andexpand into other Tier 2/s 3 cities. It plans to adopt a morecalibrated approach to pharmacy store additions from nowand plans to close non-profitable stores.

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Bata


Bata has shifted its model from in-house manufacturing tooutsourcing, and further reduced employee costs througha voluntary retirement scheme. It has exited the low valuesegment by selling its Hawaii brand and has expeditedthe launch of premium products. Additionally, it hasincreased its focus on women and children wear. It closedunviable smaller-sized stores.

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Concor(Container Corporation of India)


Concor it operates a pan-India network of 59 terminals andwagon fleet of about 250 rakes. It has a market share ofabout 75% in the overall container movement by rail inIndia. It has pricing power being the market leader. In ascenario where acquiring further land is a daunting task,possessing terminals across India is a big advantage forthe company.

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Crisil


Crisil is the undisputed market leader in credit ratings inIndia with more than two thirds of Indian corporates andmost banks rated by Crisil. Additionally, the company alsohas a sizeable presence in the rating of small andmedium-sized enterprises (SME) and corporate bonds.


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Crisil has a diversified revenue stream with over half of itsrevenue coming from other countries.


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Moneycontrol- 10 MID CAP STOCKS.pdf

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