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Value Research

February 2013
Volume VI, Number 8

Editorial Policy
The goal of Wealth Insight, as with all publications from Value Research, is not just limited to generating profitable ideas for its readers; but to also help them in generating a few of their own. We aim to bring independent, unbiased and meticulouslyresearched stories that will help you in taking better-informed investment decisions, encouraging you to indulge in a bit of research on your own as well. All our stories are backed by quantitative data. To this, we add rigorous qualitative research obtained by speaking to a wide variety of stakeholders. We firmly stick to our belief of fundamental research and value-oriented approach as the best way to earn wealth in the stock market. Equally important to us is our unwaveringly focus on long term planning. Simplicity is the hallmark of our style. Our writing style is simple and so is the presentation of ideas, but that should not be construed to mean that we over-simplify. Read, learn and earn and lets grow and evolve as we undertake this voyage together.
Editor Dhirendra Kumar Special Correspondent Mohammed Ekramul Haque Research & Editorial Naman Sachdev, Varun Chabba, Vikas Vardhan & Vivek Malik Design Mukul Ojha, Kiran Sindhwal, Manish Shukla Production Hira Lal
Data source for stocks: AceEquity

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COVER STORY

Bajaj Holdings & Investment, Berger Paints India, Bharat Electronics Blue Star, Bombay Dyeing , CMC, Castrol India, Century Textiles, City Union Bank, Consolidated Construction Consortium, Coromande International, Credit Analysis & Research , Crompton Greaves C u m m i n s I n d i a , D e e p a k F e r t i l i s e r s Dewan Housing, Dish TV, FAG Bearings India, FDC, Finolex Cables Glenmark Pharma, Globus Spirits, Godrej Industries, Goodyear India Graphite India, Great Eastern Shipping, Greaves Cotton, Grindwel Norton, Gujarat Industries Power, GMDC, Gujarat Pipavav Port, GSFC Hathway Cable, Havell's, Hawkins Cookers, Hexaware Technologies Hindustan Dorr Oliver, Hindustan Media Ventures, Indraprastha Gas Jet Airways, Jubilant FoodWorks, KCP, Kansai Nerolac Paints, Karu Vysya Bank, Kaveri Seed, Kirloskar Industries, LIC Housing Finance Madras Cements, Manappuram Finance, Max India, McDowel Holdings, Mcleod Russel, MindTree, Motilal Oswal Financial Services MCX , Navneet Publications, PI Industries, PC Jeweller, Pfizer, Polaris Financial Technology, Redington India, Reliance Capital, SKF, Saga Cements, Mahindra Satyam, Sayaji Hotels, Shree Cement, SML Isuzu Sun TV, Sundaram Finance, Supreme Industries, Supreme Infrastructure India, Symphony, Tata Elxsi, Tata Global Beverages Tech Mahindra, Texmaco Infrastructure, Texmaco Rail, Thermax Torrent Power, Tree House Education , TV18 Broadcast, Unitech United Bank Of India, VA Tech Wabag, Vardhman Textiles, Wabco

MIDCAP

IDEAS
of 5 winning funds
Wealth creation opportunities
BY SHREYASH DEVALKAR
Fund Manager - Equities, BNP Paribas Mutual Fund

Stocks that fired the five outstanding mid-cap funds in 2012

2012 Value Research India Pvt. Ltd.


Wealth Insight is owned by Value Research India Pvt. Ltd., 5, Commercial Complex, Chitra Vihar, Delhi 110 092. Editor: Dhirendra Kumar. Printed and published by Dhirendra Kumar on behalf of Value Research India Pvt. Ltd. Published at 5, Commercial Complex, Chitra Vihar, Delhi 110 092. Printed at Option Printofast, 46, Patparganj Industrial Area, Delhi-110092

Economic activity will pick up


BY PANKAJ MURARKA
Senior Fund Manager Equity, Axis Mutual Fund

Focus on quality companies


BY SIVASUBRAMANIAN KN
CIO, Franklin Equity - India, Franklin Templeton Investments

Still a valuation gap in mid-caps


BY DHIMANT SHAH
Fund Manager, Principal Emerging BlueChip Fund

Not defensive this year


BY R SRINIVASAN
Head - Equities, SBI Mutual Fund

Advertising Contact:
Mumbai: 22838665 / 22838198 Delhi: 22457916 / 22457918 Manuel Fernandes +91-98212-10948 Biswa Ranjan Palo +91-96640-75875

Total pages 66, including cover

February 2013 Wealth Insight 3

Columns

EDIT

24

MAINSTREET

26

STRAIGHT TALK

28

THE CHARTIST

Mid-cap masters
BY DHIRENDRA KUMAR
As ever, mid-cap investing is more difficult and simultaneously more rewarding than large-caps

Forensic clean-up
BY SAURABH MUKHERJEA
The economic downturn was a dark cloud and had its own silver lining too: cleaner account books in India

Energy: elixir of economy


BY ANAND TANDON
Core inflation is down, headlines say. Manufacturers dont have pricing power, parrot the economists. Beating this trend is the energy sector

Lagging, but solid indicators


BY DEVANGSHU DATTA
The stock market does not rise independent of other factors. Macro-economic data coming from IIP or WPI plays an equally important role

Wealth Insight Advisory

Stock Insight

20

ANALYSTS DIARY

45

MARKET COMPASS

BALKRISHNA INDUSTRIES

Dont go by the looks Update on our recent recommendations

Not treading the beaten path


In 18 years since BKT shifted to off the highway (OTH) segment, it has done enough to make a mark globally

41

STOCK ADVISORY

Not at all a value stock Mining behemoths

48

KEC INTERNATIONAL

Executioner par excellence


Though its profitability might have gone down of late, KEC has all the necessary ability to come out stronger

STOCK IDEAS
54 Ideas to delve deeper
Discount to book value Reasonable priced growth stocks High dividend yield Attractive bluechips Update on companies with moat
DISCLAIMER

Big moves Companies with negative working capital Tata vis-a-vis the Sensex Sensex at 20,000 DIIs exit the market SKS Microfinance on road to recovery Index watch

Miscellaneous

51

TORRENT PHARMA

Regaining lost ground


With competition getting stiffer, Torrent Pharmaceuticals is emphasised on increasing its coverage and building brand value

6 The tool helps in keeping a tab on


VALUE RESEARCH ONLINE

funds you regularly want to monitor and does not require looking up to each fund individually

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WORD OF MOUTH

The contents of Wealth Insight published by Value Research India Private Limited (the Magazine) are not intended to serve as professional advice or guidance and the Magazine takes no responsibility or liability, express or implied, whatsoever for any investment decisions made or taken by the readers of this Magazine based on its contents thereof. You are strongly advised to verify the contents before taking any investment or other decision based on the contents of this Magazine. The Magazine is meant for general reading purposes only and is not meant to serve as a professional guide for investors. The readers of this Magazine should exercise due caution and/or seek independent professional advice before entering into any commercial or business relationship or making any investment decision or entering into any financial obligation based on any information, statement or opinion which is contained, provided or expressed in this Magazine. The Magazine contains information, statements, opinions, statistics and materials that have been obtained from sources believed to be reliable and the publishers of the Magazine have made best efforts to avoid any errors and omissions, however the publishers of this Magazine make no guarantees and warranties whatsoever, express or implied, regarding the timeliness, completeness, accuracy, adequacy, fullness, functionality and/or reliability of the information, statistics, statements, opinions and materials contained and/or expressed in this Magazine or of the results obtained, direct or consequential, from the use of such information, statistics, statements, opinions and materials. The publishers of this Magazine do not certify and/or endorse any opinions contained, provided, published or expressed in this Magazine.Reproduction of this publication in any form or by any means whatsoever without prior written permission of the publishers of this Magazine is strictly prohibited. All disputes shall be subject to the jurisdiction of Delhi courts only. ALL RIGHTS RESERVED

4 Wealth Insight February 2013

Value Research

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