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You are here : IndiaNotes >> Research & Analysis >> Companies >> Future Retail Ltd. >> Research

Rudra Shares recommend New Year SIP Picks for 2017

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GNFC


Company remained positive on maintaining the same level of growth in the second half of the fiscal as well. Reported the highest-ever single profit of Rs 228 Crores in Q2 FY16 since its inception in 1982. Company’s chemical & fertilizer segment performed better & remained profitable during the quarter. GNFC’s Neem Project is evidently playing a significant role in preventing the misuse of Urea . Going forward, government initiatives towards boosting the rural economy, various governments yojana would benefit the company in long run.


DCB Bank


Its business segments includes Retail, micro- SME, SME, mid-Corporate, Agriculture, Commodities, Government, Public Sector, Indian Banks, Co-operative Banks and Non Banking Finance Companies (NBFC). Banks net NPAs reduced to 0.84% from 0.87% of the total assets in Q2FY17. Posted a 31.30 % increase in net profit at Rs 48.9 crore for the quarter ended on September 30,2016.


Post demonetization banking sector would benefit in the long term as a lot of the black money is deposited in bank accounts and the excess funds in the banking system will also help address the non-performing assets (NPA) problem that many of the banks are facing due to bad loans.


Deepak Nitrite


Sorted into basic chemicals, fine & specialty chemicals and performance products, Deepak Nitrite's product portfolio consists of organic, inorganic and fine chemicals - for use in detergents, colorants, paper, agro chemicals, rubber etc.


DNL's phenol project, though imposing in size, would struggle to escape uncertainty of the external environment; no matter how benign it’s casted.


Yet resilience of its FSC business to upheavals in global crude oil markets deserve review for its profit would more than double that of other segments combined by FY19. Equity funding for the phenol project has masked much of the vivacity in earnings over the next two years.


Aditya Birla Fashion

 

Company is ready to aggressively expand its food and groceries business & plans to spend Rs 100-150 Crores every year (for the next few years) on new stores. ABRL could add 30-40 supermarkets or even more next year. It operates 487 supermarkets and 19 hypermarkets currently.


Company’s revenue increased 13% during Q2, driven by the company’s value format business Pantaloons. Post this acquisition, company further expanded its kitty with addition of Forever 21. It bought the Indian operations from Diana Retail, promoted by DLF Brands for USD 26 million (around Rs 175.52 crore). Madura Fashion & Lifestyle, which constitutes premium brands and generates three-fifths of Aditya Birla Fashion and Retail’s revenues and operating profits, grew by a tepid 5%.


Titan Company


The Tata Group company, with a market share of over 50% in the country’s organized watch market of ₹6,200 crore, coming up with the end-of-season discounts, followed by improved numbers in the last quarter this fiscal, will help change course and potentially boost sales. Moreover, Titan plans to add new products in the jewellery segment at different price points to capture higher volume growth. The company:


- is looking at the online channel as another growth engine.


- Launched its largest watch store in Hyderabad & emerged as the largest specialty watch retailer in the country, introducing over 250 models in a year,


- Announced the launch of integrated format store in Bengaluru.


- Exploring opportunities in personal lifestyle categories, special occasion ethnic wear for women, which would be piloted now. Looking at the recent launches & expansion, this would bode well for the company going forward.


Capital First


Total capital of the company has grown consistently & significantly over the past 6 years at 4.23x. Moreover, its total AUM increased 19.19x with growth in retail AUM at 172.22x from past 6 years. Its % of Gross & Net NPA reduced to 0.98% & 0.45% respectively. Number of customers financed since inception crossed 3.2 million during Q2 FY17. Capital First has improved its performance with major thrust on retail side of the business. Company changed its focus from high risk and high ticket wholesale loans to low risk and high return retail segment, Customized credit assessment and operations, Provide debt finance products to MSMEs, has low NPA with strong balance sheet & also considering macro economic factors which would benefit the company in increasing its Loan Book & further improving profits. Company may emerge as one of the strongest NBFC among its peers.


Future Retail

 

Strategic merger with Bharti Retail Limited by winning retail brands such as Big Bazaar, easy day, fbb, Food Bazaar, Home Town, eZone & Foodhall & with Bajaj Finance Ltd. ushering in a digital era of smart purchase by their customers. Along with this, Company took leadership position by being among the first to form a partnership with Patanjali Ayurved. Further, it acquired online furniture seller FabFurnish.com from its owner, Bluerock eServices Private (BEPL). Focus of the company is now on strengthening its food division after Fashion business became reasonably big. The Group is targeting Rs 1 lakh crore turnover by 2021 in the long-run.


4 Acquisitions, 1 JV & making Big Bazaar into ATM after cash crisis post demonetization, would boost footfalls directing potential customers towards it & this is expected to result in margin tailwinds in the years ahead.


ITC


Co. expects to cross Rs 10,000 crore annual revenue in its food business in the next 18-24 months which was Rs 7,200 crore in FY16, now the second largest business within ITC, with contribution of nearly 18 %. It had begun its journey in foods with biscuits, entered snacks by launching the Bingo brand and then to instant noodles through brand Sunfeast Yippee. Last year, it added juices, ghee and later expanded into dairy whitener and premium chocolates. Forayed into a premium segment in the chocolate space, where no other brand exits. The country's chocolate market is around Rs 7000 crore and growing at 10-12 % yearly . Despite slowdown ITC has shown sustained growth and has been a strong player with focus on improving its business segment and enter new segments with innovative products and to maintain its leadership position and brand image, going forward.


HDFC Bank


HDFC Bank has been one of the most resilient banks, tiding over industrywide challenges well. Steady loan growth, low delinquency and ability to safeguard margins have kept it on a strong footing. In the next few years, HDFC is eyeing at a 15-18% growth in the individual loan book. HDFC Bank boasts of a strong operating performance by virtue of rich franchise both on the asset and liability side that helps put up a superior margins show and operating profitability each quarter. The bank is confident of maintaining NIMs traction.


Post demonetization banking sector is expected to benefit in the long term as a lot of the black money is deposited in bank accounts and the excess funds in the banking system will also help address the non-performing assets (NPA) problem that many of the banks are facing due to bad loans.


Hexaware Technologies


Company opened its 2nd delivery centre in Chennai. The addition of this center in its global delivery network will further strengthen the Company's delivery capabilities in providing accelerated business process solutions for clients across industries and various geographies. Company’s Digital business is expected to comprise 80 % of incremental investment and its share in Indian IT is expected to increase from 10% in 2014 to 35 % in 2020 and 60 % in 2025. 65% of company's revenue are derived from US & 27% from Europe. The sales CAGR of the company for the past 3 years stood at 21.2% , indicating the strong performance of the company.


Timken India


Backed by Philadelphia Gears’ know-how, Timken India has set up a gear box repair facility in Raipur to serve the heavy process industry. Currently served by unorganized players, the management pegs the opportunity in the segment at Rs 2500 crore in India wherein it is looking to garner up to 15% market share in the longer term. Timken has posted positive growth & also increased exports by 8% during FY 16. Prominent segments such as exports and distribution contributed to a healthy profit margin. Strong parentage, healthy balance sheet, stable customer base, strong governance, expansion plans in addition to enhance the market share, profitability in chosen sectors, cost efficiency & after market service business would benefit company to deliver good set of numbers, going forward.


Government at the Center has been pushing some of the major initiatives to promote domestic manufacturing with 'Make in India' campaign and developing more R-urban (rural urban) societies.


PTC India


Specified as a "Financial Institution" under the SARFAESI Act,2002 would enable PFS to take effective measures related to recovery of dues/loan amount & restoration of economic value of stressed assets. Company is focusing on lowering borrowing cost in long term. Spreading its wings over diversified sectors, PFS is gradually extending its hold in the value chain from power generation to transmission and distribution assets, fuel source related infrastructure like, ports, and equipment manufacturers in power sector. During FY16, company witnessed robust growth in disbursements, which grew 75% over the last year to Rs 12088 crores, while Gross Loan Portfolio grew 84% Y-O-Y to Rs 7677 crores. Company also had robust growth in Net Interest Income, which grew by 69% over the last year. Collaboration with International Finance Corporation (IFC) to boost Financing for Renewable Energy Projects, PFS became the 1st institution in India, and the 26th globally, to sign IFC’s Master Cooperation Agreement.



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RUDRA is one of the growing & dynamic brokerage houses with a strong presence in the Retail and HNI broking segment. With over 25 years of experience and lead by a team with outstanding managerial acumen, RUDRA is a professionally managed company supported by over 100 professionals, including Chartered Accountants, MBAs and other senior executives. RUDRA can thereby cater to its clients' short-term as well as long-term financial needs through a comprehensive bouquet of investment services. RUDRA offers a diverse range of financial services, including institutional and retail brokerage of Equity, Currency, Commodities, Derivatives, Online Trading, Depository Services, Fixed Deposits, IPOs and Mutual Funds Distribution, and Wealth Advisory & Research. RUDRA is looking to become one of the biggest broking houses. RUDRA Securities Limited, is a member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited, MCX Stock Exchange, and Depository Participant of Central Depository Services (I) Limited. RUDRA can be approached online at www.rudrashares.com.

 

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