Connect with us

News

From Indian Hotels to PVR, here’re eight summer stocks for your portfolio

Published

on



With the mercury levels rising and the holiday break for schools beginning, summer stocks — be it cooling solutions or those related to holidays — tend to stand out.

It is no surprise that some stocks in the air-conditioning space have outperformed the overall market in the last couple of months. The gains could continue given that India Meteorological Department (IMD) has predicted above-normal temperatures in key regions and an extended summer season. After a forgettable CY18 due to unseasonal rains, regulations and higher raw material costs, brokerages expect a better CY19 for cooling majors on account of lower costs and a spike in demand. In addition to cooling solutions, companies in the beverages space, too, stand to gain from an expected surge in demand as summer takes hold.


The second set of companies that will benefit are those that cater to customer needs during the holiday season.

Given the school break, this is the peak travel season and companies catering to the ‘friends and family’ segment are expected to gain, especially in the hospitality and transportation segments. There are two stocks that have the largest reach, be it in the number of hotel rooms or domestic market share with a pan-India network, which should take a major share of the gains.

Leisure and entertainment activities is the other theme to find favour among investors during holidays. Companies in the quick service restaurant space, multiplex chains and personal luggage makers could see a surge in footfalls. The consumption theme for this set of stocks is expected to be driven by higher disposable income, the need for replacement, and lower penetration levels.

Indian Hotels

chart

  • Given the favourable demand-supply situation, India’s largest hotel chain should benefit by expanding from just under 18,000 rooms currently to about 25,000 over the next four years
  • The company is looking at increasing its revenue per room through higher room rates as well as improved occupancies, especially in the premium segment
  • In addition to top line growth, cost optimisation measures across verticals, including sourcing and manpower, should also help drive margins
  • The company is seeking to improve its balance sheet through monetisation of its land bank and sale and leaseback measures, besides asset-light ways such as management contracts for expansion
  • Given the revenue growth and margin gains, profits are expected to double over the next two years

Jubilant FoodWorks

chart

Jubilant has launched 10 new pizzas under its World Pizza League to cash in on the

  • on-going IPL and the upcoming ICC Cricket World Cup
  • Same-store sales (SSS) growth has been healthy in past five quarters and the trend is likely to continue
  • Extension of every day value offer to regular sized pizzas from medium sized earlier, and efforts to cut down delivery time to 20 minutes, will add to SSS growth
  • Tie-up with Pepsi as a beverage partner in November 2018 to push up margins. Also, its recent foray into Chinese food — Hong’s Kitchen — is a long-term positive
  • At 46 times FY20 price-to- estimated earnings, the stock offers favourable risk-reward to long-term investors

Voltas

Voltas

Voltas

chart

chart

chart

  • Given its portfolio and presence across cooling products, Voltas will be a major beneficiary this season
  • The leader in room air conditioners has a presence in refrigerators and other white goods through a joint venture, which will drive growth
  • The onset of summer has helped it clear channel inventories of air conditioners, which was earlier preventing it from hiking prices
  • Analysts believe the rising contribution of premium products, stable raw material prices, as well as currency, will help margins
  • Company’s projects division, too, is growing well with a strong order book and an improving margin profile, adding to overall prospects

Interglobe aviation

chart

chart

chart

  • The operator of India’s largest airline Indigo, with a market share of 45 per cent, will benefit both in domestic and international routes due to the trouble at Jet Airways
  • Greater pricing power, lower fuel costs, and rupee appreciation should improve profitability
  • After four quarters of pressure, margin is expected to rise 300-400 basis points in the March quarter
  • Given the issues related to Boeing 737 Max 8 and Airbus A320neo, supply-related issues are expected to ease a bit even as new aircraft deliveries get postponed
  • The lowest cost structure in the industry and cash on the balance sheet are the other positives

Varun beverages

  • Major beneficiary of rising sales of PepsiCo’s bottled drinks
  • Latest acquisition of franchise rights in the South and West India should help company tap 80 per cent of PepsiCo’s carbonated drinks market in the country
  • Even as Pepsi commands only 25 per cent market share in these two regions, seasonality is less than existing territories, which will improve volumes in the December and March quarters, going forward
  • Manufacturing of Tropicana for the Indian market is also a positive, given the growing preference for non-carbonated drinks
  • However, until full utilisation of plants is achieved (mid-2019), margins may remain capped

VIP Industries

VIP

VIP

chart

chart

chart

  • Strong traction for business and leisure travel along with rising disposable incomes and organised retailing have boosted demand for luggage
  • Implementation of GST helped grow market share, which, coupled with export opportunities and shorter backpack replacement cycle should help grow sales 20-30 per cent for the next three years
  • Hypermarket and e-commerce sales will also support growth
  • Focus on premium products and expansion of production facilities to avoid costlier procurement from China should improve profitability
  • Net profit is estimated to grow by 25 per cent annually over the next three years

Johnson Controls-Hitachi

chart

chart

chart

  • Growing penetration and demand for air conditioners (ACs) make the company a key beneficiary of the ongoing summer season, which is likely to be hotter than usual
  • It will benefit from premiumisation and a significant growth in inverter ACs, which have seen faster adoption across the country
  • The company is targeting 10-15 per cent annual growth in ACs over the next three years, along with big gain in market share of inverter ACs
  • Even as it achieves higher volumes in the premium segment, the focus is on improving operating performance by cutting costs
  • The company is also looking at metro projects, given the significant market potential they offer

PVR

chart

  • India’s largest multiplex operator, with a capacity of 748 screens (as of December 31, 2018) and an estimated 27 per cent market share, should benefit from higher footfalls this season
  • The recent acquisition of SPI Cinemas positions PVR as a major player in the south, thereby extending its dominance beyond the northern and western regions
  • Release of over 20 new English and Hindi films will aid volume growth in coming quarters
  • With uncertainties on issues related to allowing outside food into movie halls over, food and beverage sales should pick up
  • Recent cut in goods and services tax (GST) for multiplexes is positive
  • Debt of Rs 1,500 crore and rising interest cost are monitorables



Advertisement

News

Final approvals for Adani coal mine to be decided within 3 weeks: Australia

Published

on




The process to obtain final approvals for Indian energy gaint Adani’s Carmichael coal mine in Australia will be settled within three weeks, the leader of the country’s Queensland state said on Friday as she sought to expedite the controversy-hit project.


If given the green light, Adani could begin breaking ground at its Carmichael mine site within weeks, after more than eight years of planning.



Adani group entered Australia in 2010 with the purchase of the greenfield Carmichael coal mine in the Galilee Basin in central Queensland, and the Abbot Point port near Bowen in the north. The massive coal mine in Queensland state has been a controversial topic, with the project expected to produce 2.3 billion tonnes of low-quality coal.


In addition to its impact on climate change, environmentalists have argued the mine could do serious damage to Great Barrier Reef World Heritage Area. Another major concern about the environmental impacts of the proposed mine has been that it would wipe out the most important habitat of the threatened black-throated finch.


Queensland’s Premier Annastacia Palaszczuk announced that the two last final approvals involving groundwater and endangered black-throat finch will be settled within the next three weeks.



According to media reports, Palaszczuk said the black-throated finch plan decision is due by the May 31, the groundwater management plan decision is due by the June 13th this year.


“I know initially people thought this was months, and what I’m announcing today is it’s in a matter of weeks,” she said in Cairns.


“Everybody needs to have these issues resolved. That’s the timeframe the Coordinator General has set,” she added.


Earlier this week, Palascczuk ordered the state’s Coordinator-General to bring Adani and the state environmental authority together for discussions stating that she was ‘fed up’ with the ongoing delays.


While the post the final approval, the mining giant could start the work on the mine within weeks the coal exports could take up to two years.


“Now it’s really a case for the independent regulator to work through their internal processes and then they can make a determination and then we will be in a position to then start construction,” ABC news quoted Chief Executive of Adani Australia Lucas Dow as saying.



“We’re not expecting any significant surprises. Our construction activity will start as almost immediately as we’ve got these approvals,” he said.


Dow said over the past 18 months the company had so far produced 11 versions of its groundwater plan and seven for the black-throated finch.


The groundwater management plan has failed to meet key environmental requirements, including identifying the source of protected desert springs.


Last month, the Federal Government granted its final environmental approvals for the project days before the election was called.


While construction at the mine could begin with approvals, Adani’s proposed railway line plan is yet to be finalised.


Dow said the state’s Coordinator-General would also be publishing dates for other key activities, including the deadline of completion for the rail line’s deed of access and required sublease.


“That will also give us certainty and will also give the folks of central Queensland certainty of our project being able to proceed and deliver those jobs,” he said.



Continue Reading

News

EY working on govt’s Air India disinvestment, to issue EoI soon

Published

on




The government has put top consultancy firm EY to work for divesting its stake in flag carrier Air India and “quickly” issue expression of interest (EoI).


“EY continues to be the transaction advisor for the sale of Air India. We have been directed to close the accounts for FY19 and provide updated data for EoI to take the disinvestment process forward,” said a senior Air India official.



“Until the transaction gets completed EY is our advisor. They will be paid their fees after disinvestment process is complete. The instruction now is immediately start the process for EoI. Of course, approval of the Union Cabinet will be required for it,” he added.


The development comes close on the heels of Prime Minister’s Office (PMO) directing the Aviation Ministry to speed up the process of strategic disinvestment of Air India and three of its subsidiaries.


In a letter to Air India Chairman Ashwani Lohani, Civil Aviation Secretary Pradeep Singh Kharola had advised to finalise the financials of Air India and its subsidiaries by end of June, 2019.


“Also, the accounts for FY19 would form the basis of bidding. Therefore, it is necessary that they are prepared with utmost caution so as to reflect the correct financial status,” Kharola had written in the letter which has been reviewed by IANS.


The Aviation Secretary directed the airline to get contingent liabilities and account receivables verified thoroughly besides a physical verification of the inventories. A list of pending litigations is also required to be drawn up.


The government had last year initiated the process to sell majority 74 per cent stake in the national carrier but the plan proved a damp squib with no private investor turning up for the offer.


In view of rising fuel price and weak investment environment, the government had put the process on hold maintaining that it would be taken up after Lok Sabha elections 2019.



Continue Reading

News

Grasim Industries plans to invest additional Rs 6,400 crore to add capacity

Published

on




Aditya Birla Group’s Grasim Industries plans to invest an additional Rs 6,400 crore in expanding its capacity as its existing plants are unable to meet growing demand from the local customers.


Dilip Gaur, managing director of Grasim, said the investment would be made in the speciality fiber business, which would increase its capacity by about 40 per cent in the next two years as the company.



“We have invested Rs 7,000 crore in the last 10 years and will invest a similar amount in the next two years as demand is fast picking up. We have to divert our exports consignments to the domestic market to cater to the demand,” he said.


The additional capacity will be commissioned at Vilayat plant in Gujarat in two years. Grasim also holds stakes in Ultratech and Aditya Birla Financial Services.


ALSO READ: I-T dept slaps Rs 5,872-crore tax demand notice on Grasim Industries



Sushil Agarwal, Grasim’s outgoing chief financial officer, said as Grasim mirrors the trend in the economy, they are expecting the government’s thrust on the infrastructure sector will help it to boost demand for cement and financial services business in the coming quarters.


“With the government planning to invest heavily in building infrastructure, it would boost all our business.”


“The government’s thrust on infrastructure development like construction of cement concrete roads, metro rail networks, airports, irrigation projects and increase in the pace of execution under the low cost housing program supported strong volume off-take of cement,” the company said in a statement. “All of these are expected to result in sustained demand growth for cement going forward. This augurs well for the industry,” it said.



Continue Reading
Film News10 hours ago

Man Sues Snapchat After Baby Filter Pics Do Not Match His Childhood Pictures

News11 hours ago

Final approvals for Adani coal mine to be decided within 3 weeks: Australia

News12 hours ago

EY working on govt’s Air India disinvestment, to issue EoI soon

News12 hours ago

Grasim Industries plans to invest additional Rs 6,400 crore to add capacity

News13 hours ago

Grasim to invest additional Rs 6400 cr in expanding capacity to meet demand

News14 hours ago

Cement volume growth at 9-year high as govt schemes boost housing demand

News14 hours ago

Dish TV posts Rs 1,361.3 cr loss in Q4FY19, subscription revenue drops 5%

News15 hours ago

GVK consolidated net loss at Rs 304 cr for FY19, yet to fix divestment bid

News15 hours ago

Ashok Leyland reports 12% decline in Q4 net profit at Rs 652.99 cr

News16 hours ago

Vistara leases four 737s Jet Air flew earlier, to start new domestic routes

News16 hours ago

JSW Steel Q4 PAT halves to Rs 1,495 cr on higher expenses, lower margins

News17 hours ago

Hinduja group confirms evaluating options for Jet Airways stake

News17 hours ago

Ashok Leyland lines up Rs 2,000 cr capex for BS-VI migration, new LCV unit

News18 hours ago

Ashok Leyland’s Q4 profit declines 12% to Rs 665 cr, revenue rises by 1%

News19 hours ago

DLF targets 10% rise in sales bookings for FY20 at Rs 2,700 crore

PM Narendra Modi Movie Review
Film News22 hours ago

PM Narendra Modi Movie Review

Film News22 hours ago

Taimur isn’t allowed to eat at birthdays, says Kareena

Film News22 hours ago

Arya and Sayyeshaa joining for Teddy

SRK begins shoot for 'TED Talks' season 2
Film News23 hours ago

SRK begins shoot for ‘TED Talks’ season 2

Arjun Kapoor and Malaika Arora
Film News23 hours ago

Arjun Kapoor’s silent on marriage with Malaika

News23 hours ago

Zydus Wellness’ Heinz India and Zydus Nutrition merge post NCLT approval

News1 day ago

BOC Aviation delivers three Boeing aircraft to SpiceJet

News1 day ago

Western Digital’s investment in Indian markets at Rs 1,400 crore a year

Film News1 day ago

Wrestling legend Ric Flair hospitalized

News1 day ago

Paytm Payments Bank breaks even in 2nd year, posts FY19 profit of Rs 19 cr

News2 days ago

L&T buys over 4.5 lakh shares of Mindtree, hikes shareholding to 26.93%

News2 days ago

Nippon Life, Reliance Capital sign deal for sale of mutual fund arm

News2 days ago

Domestic pharma companies eye robust growth from US market in FY20

News2 days ago

GIC Q4 PAT down 19.7% at Rs 603 cr on provisioning for IL&FS exposure

News2 days ago

DP World-NIIF JV to acquire 76% in rail logistics firm Kribhco Infra

News4 weeks ago

IL&FS case: Govt likely to ban Deloitte for 5 yrs for alleged malpractice

News4 weeks ago

Essar Steel posts EBITDA of Rs 2K crore, may use funds to repay creditors

News4 weeks ago

L&T Finance Holdings Q4 net up 94% to Rs 548 cr on rising interest margins

News4 weeks ago

Tyre makers to invest Rs 20,000 cr in 3 years as demand sees uptick

News4 weeks ago

Intel banks on data, gaming, artificial intelligence for growth in India

News4 weeks ago

Jaypee insolvency: Lenders to meet on Apr 26 & 30 to consider revised bids of NBCC, Suraksha

News4 weeks ago

150 Air India flights delayed over server breakdown, thousands stranded

News4 weeks ago

TVS Motor picks up minority stake in IoT firm Altizon, invests over $2.5-mn

News4 weeks ago

J&J rejects report by Raj govt on presence of formaldehyde in baby shampoo

News4 weeks ago

Child rights body asks states to stop sale of Johnson’s baby shampoo

News4 weeks ago

Dr Reddy’s Laboratories, Cipla arm recall drugs from American market

News4 weeks ago

BigBasket to invest $100 mn to set up vending machines, distribution points

News4 weeks ago

McNally Bharat Engineering reclassifies EMC as its promoter shareholder

News4 weeks ago

Carr Lane enters into JV with Chennai firm to produce aerospace components

News4 weeks ago

Yes Bank clean-up to continue as Gill shifts focus to governance practices

News4 weeks ago

Dhoni moves SC against Amrapali Group over cheating, seeks Rs 40 cr in dues

News4 weeks ago

Ask SBI to release one month’s salary to Jet Airways staff: NAG to PM Modi

News3 weeks ago

Mindtree’s Q4 casts doubts on immediate gains for L&T from the buyout

News4 weeks ago

Ruchi Soya case: Lenders to meet on Friday to consider Patanjali’s offer

News4 weeks ago

Dead may outnumber living on Facebook in 50 years: Who will own their data?

News4 weeks ago

Rights issue oversubscribed, crossed Rs 25,000 crore: Vodafone Idea

News4 weeks ago

Jaypee Infra lenders reject NBCC bid, to vote on Suraksha offer: Reports

News4 weeks ago

Jaypee Infratech lenders to vote on Suraksha offer next week: Reports

News4 weeks ago

Milkbasket raises Rs 20 crore funding from Sachin Bansal’s BAC Aquisition

News4 weeks ago

Vistara may induct some of Jet’s Boeing 737s planes and its pilots: Report

News4 weeks ago

NCLAT advances hearing on Essar Steel’s resolution process to May 7

News4 weeks ago

Jet Airways staff promise to secure Rs 3,000 crore, seek SBI nod to bid

News4 weeks ago

Mahindra Lifespace’s Chennai industrial cluster eyes Rs 3,500 cr in phase-I

News4 weeks ago

Anarock revenue doubles to Rs 188-cr in FY19; brokerage drives growth

News4 weeks ago

InterGlobe Hotels plans to invest Rs 700 cr in India, add 6 hotels by 2022

Trending