Here are four stocks to track in volatile markets:
Motherson Sumi Ltd: The big trend identified by experts is decline in commodity prices, and investors can look at stocks which will get benefited because of softening commodities.
Motherson Sumi is one such stock which matches the criteria. Along with that, there are multiple factors which are in its favour.
Its global subsidiary SMR is turning around and the management is confident that despite a visible slowdown, demand from some of their top clients, which include names like Volkswagen, Audi and Mercedes, will remain intact.
Management is also confident that at a global level, things will improve.
"The company is confident about achieving its 40% ROCE target and exceed $5bn revenue target for FY15. Domestic business has seen strong growth of over 25 per cent despite lack of car sales growth," BofA-ML said in a report.
"Improvement in margin and ROCE of overseas subsidiaries like SMR and SMP is on track. The loss making Brazil unit is a concern and may take six months to improve," added the note.
Global investment bank Espirito Santo reiterates its 'BUY' rating on the stock with a target price of Rs 276
.
Jubilant Foodworks Ltd:
Analysts say it's a great franchise and Dominos Pizza is a household name but in the near term, it appears that the stock has hit some kind of a wall. Jubilant Foodworks is a great brand. However, what is not growing for the company is the same store sales.
Same store sales for Jubilant Foodworks are not growing and the Dunkin' Donuts franchise's operating profit margins in the near term will remain under pressure.
Most of the stores currently owned by Jubilant Foodworks are due for renewals, which means operating profit margins for FY14 will be under intense pressure.
Jubilant Foodworks has not been a great wealth creator this year. Most of the brokerages, except CLSA and Deutsche Bank, are now finding little merit in advising their clients to buy Jubilant Foodworks.
Deutsche Bank maintains a 'buy' rating on Jubilant FoodWorks and has also upped the price target from Rs 1260 earlier to Rs 1300.
The brokerage see 4 key drivers of stock price in the short term - guidance on same store sales growth, new stores addition, cash utilization and lastly guidance on losses from Dunkin Donuts business.
CESC:
Calcutta Electric Supply Corporation has plunged over 10 per cent so far in the year 2013 but analysts see silver lining in the fall and expect it to bounce back in near term.
According to analysts, electricity tariffs have been hiked in Kolkata in last quarter and the effect of that will be visible in the balance sheet of CESC in the coming quarters.
CESC is also the parent company and holds majority stake in the retail chain Spencer. At a time when retail sales were subdued, Spencer bucked the trend, whereas it's larger peers Pantaloon and Shoppers Stop reported a de-growth in their same store footfalls.
The management has indicated that if not in FY14, maybe by beginning of FY15 they may seriously consider de-merging the retail arm and the electricity arm.
The company is also mulling to take Spencer public. The management sounds confident of achieving their FY13 guidance.
Experts say valuations for CESC are mouth wateringly attractive and the stock is not trading at sub-book levels. So for a company of that pedigree and for a franchise of that quality, if the stock is available below book, it is a good time to buy.
United Phosphorus Ltd:
This is one stock which has disappointed lot of fund mangers and long term investors. However, if we look at the business dynamics, there is a case for changing fortunes for the stock.
Cash flow from Brazil will improve and the company has a very strong focus on emerging markets. However, what might pose a problem for United Phosphorous is its strong ownership pattern.
Most of local and global mutual funds have a large exposure to United Phosphorus. So if the stock appreciates to Rs 130-135 in the short term, we may see some profit booking.
If the business dynamics change, such as appreciation in currency or good monsoon, there is a strong case that it might just bounce back.
Motherson Sumi Ltd: The big trend identified by experts is decline in commodity prices, and investors can look at stocks which will get benefited because of softening commodities.
Motherson Sumi is one such stock which matches the criteria. Along with that, there are multiple factors which are in its favour.
Its global subsidiary SMR is turning around and the management is confident that despite a visible slowdown, demand from some of their top clients, which include names like Volkswagen, Audi and Mercedes, will remain intact.
Management is also confident that at a global level, things will improve.
"The company is confident about achieving its 40% ROCE target and exceed $5bn revenue target for FY15. Domestic business has seen strong growth of over 25 per cent despite lack of car sales growth," BofA-ML said in a report.
"Improvement in margin and ROCE of overseas subsidiaries like SMR and SMP is on track. The loss making Brazil unit is a concern and may take six months to improve," added the note.
Global investment bank Espirito Santo reiterates its 'BUY' rating on the stock with a target price of Rs 276
.
Jubilant Foodworks Ltd:
Analysts say it's a great franchise and Dominos Pizza is a household name but in the near term, it appears that the stock has hit some kind of a wall. Jubilant Foodworks is a great brand. However, what is not growing for the company is the same store sales.
Same store sales for Jubilant Foodworks are not growing and the Dunkin' Donuts franchise's operating profit margins in the near term will remain under pressure.
Most of the stores currently owned by Jubilant Foodworks are due for renewals, which means operating profit margins for FY14 will be under intense pressure.
Jubilant Foodworks has not been a great wealth creator this year. Most of the brokerages, except CLSA and Deutsche Bank, are now finding little merit in advising their clients to buy Jubilant Foodworks.
Deutsche Bank maintains a 'buy' rating on Jubilant FoodWorks and has also upped the price target from Rs 1260 earlier to Rs 1300.
The brokerage see 4 key drivers of stock price in the short term - guidance on same store sales growth, new stores addition, cash utilization and lastly guidance on losses from Dunkin Donuts business.
CESC:
Calcutta Electric Supply Corporation has plunged over 10 per cent so far in the year 2013 but analysts see silver lining in the fall and expect it to bounce back in near term.
According to analysts, electricity tariffs have been hiked in Kolkata in last quarter and the effect of that will be visible in the balance sheet of CESC in the coming quarters.
CESC is also the parent company and holds majority stake in the retail chain Spencer. At a time when retail sales were subdued, Spencer bucked the trend, whereas it's larger peers Pantaloon and Shoppers Stop reported a de-growth in their same store footfalls.
The management has indicated that if not in FY14, maybe by beginning of FY15 they may seriously consider de-merging the retail arm and the electricity arm.
The company is also mulling to take Spencer public. The management sounds confident of achieving their FY13 guidance.
Experts say valuations for CESC are mouth wateringly attractive and the stock is not trading at sub-book levels. So for a company of that pedigree and for a franchise of that quality, if the stock is available below book, it is a good time to buy.
United Phosphorus Ltd:
This is one stock which has disappointed lot of fund mangers and long term investors. However, if we look at the business dynamics, there is a case for changing fortunes for the stock.
Cash flow from Brazil will improve and the company has a very strong focus on emerging markets. However, what might pose a problem for United Phosphorous is its strong ownership pattern.
Most of local and global mutual funds have a large exposure to United Phosphorus. So if the stock appreciates to Rs 130-135 in the short term, we may see some profit booking.
If the business dynamics change, such as appreciation in currency or good monsoon, there is a strong case that it might just bounce back.
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