Analysts' corner

Bharat Electronics
Reco price: Rs 1,631
Current market price: Rs 1,572.50
Target price: Rs 2,144
Upside: 36.3%
Brokerage: Anand Rathi Research

Bharat Electronics’ (BEL) order backlog at the end of October 2009 stood at Rs 12,260 crore, up 18 per cent from Rs 10,390 crore as on April 1, 2009. The company has seen healthy order inflows of Rs 3,950 crore in the first half of 2009-10 and expects more to follow in the second half. Nevertheless, some of the orders received also relate to “off-set clause” as per the new defence procurement policy. The brokerage feels that the “off-set provision” for defence procurement has opened new avenues for the company’s growth.

Revenues in the first half of 2009-10 have grown 89 per cent year-on-year (y-o-y) and earnings by 146 per cent. Though this growth seems exponential, it is not indicative of growth for the year and is a function of equally spread-out revenue in 2009-10, compared to 2008-09.

The brokerage has raised its target price for BEL to Rs 2,144 (from Rs 1,998 earlier), which is 17 times and 15.5 times the estimated EPS for 2010-11 and 2011-12, respectively. As BEL should continue to deliver strong growth in earnings as well as order inflows in the future, the brokerage maintains a buy on the stock.

Pantaloon Retail
Reco price: Rs 324
Current market price: Rs 335.25
Target price: Rs 400
Upside: 19.3%
Brokerage: India Infoline

Pantaloon Retail (PRIL) has begun the restructuring of its existing businesses along three verticals. This would entail firstly, the consolidation of PRIL as a pure retail play and transfer of the Big Bazaar and Food Bazaar formats into wholly-owned subsidiaries of PRIL, secondly, transfer of all non-retail businesses into a separate company and thirdly, value unlocking in the financial services businesses.

The management hinted at a possible tie-up with an international retailer to ramp up its discount food format, which could have an exposure of as high as 65-70 per cent (of sales) to food products. It said that the induction of such a foreign partner is one of the drivers for the planned Big Bazaar hive-off.

PRIL derives 30 per cent of revenues from its private labels, which has given the company leverage in its relationships with category leaders such as Nestle and Kellogg’s. PRIL is also expected to do a private-label launch in cereals. To extend the reach of its private labels beyond its own store, the company could be exploring the idea of buying out an FMCG company, preferably one focused on foods. The Big Bazaar hive-off would allow efficient use of capital, transform PRIL into a pure retail play and allow investors a direct exposure to pure discount retailing if and when Big Bazaar gets listed. Maintain buy.

Reliance Industries
Reco price: Rs 2,132
Current market price: Rs 2,125.15
Target price: Rs 1,750
Downside: 17.7%
Brokerage: Kotak Securities

Reliance Industries (RIL) did not make any acquisition-related announcement at its AGM contrary to Street expectations. The key announcements include peak gas production from KG D-6 block to be achieved by second half of 2009-10, oil production from KG block at around 8,000 barrel per day with peak production to be achieved by end of the fiscal, renewed focus on a new 2 MTPA petrochemical complex at Jamnagar, announced in an AGM two years back and commencement of exploratory drilling in Block 18 in Oman.

The brokerage has maintained its 2009-10 and 2010-11 EPS estimates of Rs 97 and Rs 138, respectively. The brokerage does not rule out the possibility of downside to the earnings estimates for 2009-10 since current chemical and refining margins are below its second half 2009-10 assumptions. It believes that its 2010-11 earnings estimates also look challenging without a very steep recovery in refining and chemical margins.

The 12-month SOTP-based fair valuation has been retained at Rs 1,750. Key upside risks are steep global economic recovery and higher than expected E&P reserves. However, the downside risks to the SOTP-based valuation include weaker than expected chemical and refining margins and unfavourable developments in the ongoing RIL-RNRL legal dispute. The brokerage maintains that the stock looks expensive.

Tata Steel
Reco price: Rs 547
Current market price: Rs 551.60
Target price: Rs 669
Upside: 21.3%
Brokerage: Edelweiss Securities

The management has guided that Corus’ capacity utilisation is likely to increase from around 56 per cent in June 2009 quarter to around 85 per cent in March 2009 quarter and maintained its 2009-10 and 2010-11 volume guidance at around 15 million tonne (MT) and around 17 MT, respectively. The management maintained that the full benefit of lower-cost coking coal and iron ore would accrue only from December 2009 quarter. Overall savings is likely to be in the range of $125 per tonne of steel.

Tata Steel might increasingly focus to reduce its debt-equity ratio albeit at the cost of dilution. The GDR issue of $500 million and the CARS to FCCB swap would reduce net debt-equity ratio from 2 in June 2009 quarter to 1.6 post the issue. Post September 2009 quarter standalone results, the management guided for reduction in debt of $1.6 billion in the next 12 months.

Recent uptick in Chinese steel prices and strong recovery in Baltic freight index continue to point towards recovery in global steel. Expect firm to moderately increasing steel prices in March 2009 quarter and then into 2010-11. With increasing volume growth, firm to moderately increasing European steel prices and reducing costs at Corus going forward, the brokerage has increased their 2010-11 EV/EBITDA estimates for Corus from 4.5 to 5.5, and maintains buy on the stock.

Jaiprakash Associates
Reco price: Rs 237
Current market price: Rs 232.90
Target price: Rs 266
Upside: 14.2%
Brokerage: Sharekhan

The management of Jaiprakash Associates (JAL) announced that the company is looking at diluting 15 per cent stake in its subsidiary, Jaypee Infratech (JIL), for Rs 2,500 crore. JIL is constructing the 165-kilometre-long six-lane Yamuna Expressway (formerly Taj Expressway) connecting Greater Noida and Agra. The company would be filing the draft red herring prospectus for JIL in a week and will hit the markets with a public offering in January 2010.

Assuming JAL makes a fresh issue of equity to raise Rs 2,500 crore, the indicated equity value of JIL works out to around Rs 16,670 crore. Accordingly, the derived value of JAL's holding of 95.5 crore of JIL's shares works out to Rs 14,005 crore. This is marginally higher than the value of Rs 14,512 crore assigned in the brokerage’s SOTP valuation of JAL.

Though it sees JAL emerging as a leading infrastructure player in the next few years, there is limited upside from the current level based on SOTP valuation of Rs 266. At the current market price, the stock is trading at 24.8 times 2010-11 earnings estimate. Maintain hold.

100 fastest growing small companies in India

Looking for the next Infosys? Well, you might be in luck. This list of fastest growing small companies might just give you the next Infosys. It is hard to pick on a single stock and hand it to the investor. But the due diligence is already done by ET and narrowed it down to 100. It’s your turn to pick your horse.

Comparing any of these companies with Infosys might not be apt because there are only 5 Infotech companies. And the comparison is merely for the potential growth of the stock.

From a possible 5000 companies listed on BSE, ET narrowed it to an exciting 100.

Here is how :

1. Of the 5000 stocks listed on BSE, only 2/3rds are actively traded stocks.
2. Of the 3300 companies above only 2300 companies are very actively traded and have historical data.
3. 2 lists were generated. One based on revenues and one based on market cap.
4. All the companies which figured in the top 10% in both the lists (too big) and the bottom 50% in the both the lists (too small and better for VC’s) are knocked off.
5. That left 1000 companies. Which filtered in the following manner :

While filtering the companies based on growth parameters, we considered only those companies, which beat the average growth rates of all the 1,000 companies. Also, we eliminated those companies that have a debt-equity ratio of more than 2.0 in their latest financial year and relatively lower interest coverage ratio. After this process, we were left with almost 300 companies. At this stage, we decided to rank the companies based on the their 3-year growth rates, the ratio of operating cash flows (actual) to cash profit (reported) and 3-year average return on capital employed (RoCE). First we arrived at rankings based on individual parameters and then came out with a composite ranking (to be read as final ranking). While arriving at the composite ranking, we assigned 50% weightage to the quality parameter ?cash flow ratio and RoCE? and rest to the revenue and earnings growth. Finally, we weeded out companies, which reported losses in recent quarters or whose growth was too dramatic (source)

Quite an intriguing way to filter out companies and arrive at a dynamic list.

These are the 100 companies which came through ETIG’s filters :

Rank	Company Name	Industry	Total Income	Op. Profit	Net Profit	Market cap	CMP(Rs)
1	Sulzer India	Capital Goods	196.3	55.77	34.12	300	895
2	Oil Country Tubular	Steel	432.71	101.05	67.7	384	83
3	Tata Sponge Iron	Steel	635.91	172.42	107.59	361	250
4	Zydus Wellness	FMCG	245.25	41.32	27.02	98	174
5	Liberty Phosphate	Fertilisers	336.95	33.34	18.16	35	24
6	Rain Commodities	Cement & Cement Products	1152.83	224.25	104.61	1276	172
7	Engineers India	Capital Goods	1903.17	367.74	388.13	6034	1157
8	India Infoline	Finance	590.61	173.28	109.14	4036	141
9	CRISIL	Miscellaneous	442.22	176.6	148.75	2795	4063
10	Praj Industries	Capital Goods	777.3	140.08	130.34	1876	97
11	Tide Water Oil	Oil & Gas	572.59	55.61	35.48	434	4840
12	KS Oils	Solvent Extraction	3396.8	374.44	182.68	2162	68
13	Relaxo Footwears	Leather & Leather Products	441.11	52.3	20.36	114	154
14	Vinati Organics	Pharmaceuticals	207.16	38.88	29.54	197	197
15	Bajaj Electricals	Consumer Durables	1823.71	189.81	95.47	1089	714
16	Nava Bharat Ventures	Diversified	1361.37	525.43	464.57	2879	367
17	Orient Paper & Industries	Diversified	1520.35	340.76	184.38	1047	52
18	IL&FS Investment Managers	Finance	99.17	54.93	36.39	950	49
19	Hawkins Cooker	Consumer Durables	253.69	35.03	22	233	458
20	Nagarjuna Agrichem	Pesticides & Agrochemicals	609.39	112.92	51.96	238	161
21	Diamond Power Infrastructure Ltd	Cables	695.45	99.56	62.49	461	200
22	TRF	Capital Goods	590.43	74.47	48.2	535	496
23	Fem Care Pharma	FMCG	118.47	10.92	9.46	253	701
24	National Peroxide	Chemicals	126.85	37.16	17.33	117	210
25	Sagar Cements	Cement & Cement Products	380.45	82.94	23.52	318	188
26	Divi’s Laboratories	Pharmaceuticals	1157.35	405.25	332.89	6866	574
27	VST Tillers Tractors	Automobiles	299.22	51.8	34.78	225	406
28	Jindal Drilling & Industries	Oil & Gas	1002.85	85.94	49.07	1396	585
29	Texmaco	Capital Goods	799.7	126.33	73.86	1577	133
30	Supreme Industries	Plastic Products	1667.19	237.94	97.38	799	324
31	Dhanuka Agritech	Pesticides & Agrochemicals	334.07	54.37	23.53	161	197
32	Bharati Shipyard	Shipping	1126.92	281.13	137.6	562	194
33	WPIL	Capital Goods	165.81	17.43	8.69	67	93
34	HeidelbergCement India	Cement & Cement Products	1003.78	163.12	157.89	1003	43
35	Havells India	Capital Goods	2238.08	218.45	153.75	1846	322
36	ICSA India	Infotech	1176.83	266.85	161.33	955	203
37	Tilaknagar Industries	Breweries & Distilleries	248.74	45.98	21.11	131	66
38	Ratnamani Metals & Tubes	Steel	896.57	142.96	63.97	467	102
39	Gujarat Fluorochemicals	Chemicals	1101.03	541.16	347.09	1762	154
40	Nitta Gelatin India	Chemicals	189.92	33.82	18.27	110	147
41	Shilpa Medicare	Pharmaceuticals	156.43	38.97	16.43	350	141
42	TTK Prestige	Consumer Durables	414.17	42.18	24.67	246	265
43	Amara Raja Batteries	Dry Cells	1331.03	200.26	108.13	1156	139
44	Confidence Petroleum India	LPG Bottling	245.31	27.54	17.98	214	8
45	Hindustan Dorr-Oliver	Capital Goods	616.66	66.33	36.88	504	133
46	Mcnally Bharat Engineering Co.	Capital Goods	1235.96	104.82	35.86	549	175
47	Best & Crompton Engg.Ltd.	Capital Goods	48.64	-39.26	-43.97	217	17
48	KPIT Cummins Infosystems	Infotech	560.02	124.62	66.46	592	78
49	Anjani Portland Cements	Cement & Cement Products	132.62	36.59	16.95	69	35
50	Gujarat Gas Company	Oil & Gas	1327.75	235.05	154.28	2584	201
51	Bayer Cropscience	Pesticides & Agrochemicals	1592.32	190.82	115.72	1464	393
52	KCP	Cement & Cement Products	361.66	100.27	66.34	354	250
53	J K Lakshmi Cement	Cement & Cement Products	1315.35	365.66	265.49	838	134
54	JK Cements	Cement & Cement Products	1591.22	380.83	176.43	899	134
55	Opto Circuits (India)	Consumer Durables	444.81	165.31	138.49	3156	204
56	Micro Technologies (India)	Infotech	232.37	100.15	58.89	159	147
57	Gujarat Reclaim & Rubber Prod	Rubber & Rubber Products	132.26	20.86	12.86	70	560
58	Geodesic	Infotech	571.66	251.67	197.34	1274	126
59	Honeywell Automation India	Consumer Durables	1075.74	175.33	114.84	1501	1699
60	Kesoram Industries	Diversified	4236.93	662.77	358.4	1643	373
61	JMC Projects (India)	Construction	1296.45	102.37	35.34	385	175
62	Orient Abrasives	Abrasives	302.3	66.39	33.28	243	21
63	TIL	Capital Goods	828.44	78.14	32.36	281	283
64	OCL India	Cement & Cement Products	1272.9	314.67	134.97	721	126
65	Gujarat Mineral Development Corpn.	Mining & Minerals	1031.75	442.89	244.1	3547	109
66	Ushdev International	Trading	1394.2	61.79	21.84	156	149
67	Sterlite Technologies	Cables	2326.23	253.16	126.83	1754	280
68	PSL	Steel	3524.37	237.42	82.44	808	163
69	UB Engineering	Capital Goods	457.03	35.68	21.9	141	79
70	Temptation Foods	FMCG	978.66	80.35	54.78	104	38
71	Panama Petrochem	Chemicals	320.06	33.95	10.21	61	119
72	Techno Electric & Engineering Company	Construction	534.76	58.27	73.6	885	143
73	Deccan Cements	Cement & Cement Products	231.51	74.69	33.86	172	238
74	Core Projects And Technologies	Infotech	378.11	106.78	84.66	1690	189
75	Aegis Logistics	Transport & Logistics	328.14	45.29	31.8	287	139
76	GEE	Electrodes	126.14	12.54	6.4	124	60
77	Nilkamal	Plastic Products	878.33	87.97	11.66	179	141
78	Torrent Cables	Pharmaceuticals	177.95	16.17	14.21	112	160
79	Maharashtra Elecktrosmelt	Ferro Alloys	343.86	43.68	40.44	1136	423
80	Jyoti	Capital Goods	257.74	22.59	4.66	56	47
81	Hitachi Home & Life Solutions	Consumer Durables	498.87	31.78	23.89	218	97
82	Glaxosmithkline Consumers Healthcare	FMCG	1863.15	313.33	224.69	4734	1182
83	Deccan Chronicle Holdings	Entertainment & Media	881.84	279.89	156.11	2873	143
84	Flawless Diamonds (I)	Diamonds & Jewellery	566.34	23.37	12.91	57	35
85	HBL Power Systems	Dry Cells	1193.11	180.97	82.84	795	312
86	Aditya Birla Chemicals (India)	Chemicals	218.54	73.95	48.61	176	73
87	Tinplate Company of India	Metals	754.25	139.77	53.27	336	54
88	Sanghvi Movers	Capital Goods	366.48	279.12	101.45	777	170
89	Venky’s (I)	Aquaculture & Hatcheries	602.59	44.71	21.99	139	168
90	Emami	FMCG	681.12	115.43	58.19	3132	430
91	Kirloskar Electric Company	Capital Goods	852.98	64.97	26.83	279	76
92	Chettinad Cements	Cement & Cement Products	1227.06	499.47	-12.61	1218	408
93	Sree Rayalaseema Alkali & Allied Chemicals	Chemicals	685.52	115.59	42.88	98	15
94	Jyoti Structures	Capital Goods	1814.54	205.88	81.57	1257	153
95	Gillette India	FMCG	691.52	158.41	113.14	3328	1087
96	GEI Industrial Systems	Capital Goods	213.65	29.63	10.41	99	69
97	Venus Remedies	Pharmaceuticals	276.21	63.35	42.27	222	225
98	Phoenix Mills	Real Estate	143.9	65.42	82.8	2509	165
99	Walchandnagar Industries	Capital Goods	626.19	53.48	26.84	835	210
100	Shiv-Vani Oil & Gas Exploration Services	Oil & Gas	775.98	266.3	93.9	1509	345

The market price of the stock is taken on Oct 8, 2009. (Source)

If you look at the list, it is dominated by Capital Goods. 18 companies on the list are from Capital Goods sector. Cement sector with 10 companies is the next dominant sector. Does that tell you something? India’s infrastructure spend is on the rise and hence the rise of smaller companies. Some part of your portfolio should be there.

There are 6 companies from each of these sectors – Chemical, Consumer Durables and FMCG. Pharma and Infotech, surprisingly has only 5 companies on the list.

My favorite stocks in the list are – India Infoline, IL&FS Investment manager, Deccan Chronicle (not because of Deccan Chargers), Geodesic and CRISIL (credit rating company). No particular reason. What’s yours?

2010 And 2011 Will Be More Difficult Than 2009: Peter Huntsman

With economic turmoil, environmental concerns and climate change occupying the hotspots, the chemical industry is poised to change globally. To

Peter Huntsman, CEO, Huntsman Corporation

know what lies ahead, ET caught up with Peter Huntsman, CEO, Huntsman Corporation—a global producer of differentiated chemicals with revenues over $10 bn annually. Excerpts.

How has the chemical industry changed in last decade?

Globally we have seen a tremendous transformation in the chemicals industry over the last decade. A few years ago the best of producers were in the North America or Europe, but today I believe the best producers are in the Middle East, China and say Reliance in India. The commodity side of the chemical industry is undergoing a difficult phase right now because the Middle East is coming up with tremendous amount of new capacities. They have the advantage of new technology, very large scale and low cost raw material .

Is the difficult phase for commodity chemicals likely to prolong further?

In the view of the new capacities coming up in the Middle East, 2010 and 2011 will be more difficult than 2009 for the commodity chemicals globally. As I look at this, this is not a case of over capacity. Much of the pain will come companies like Reliance, SABIC and others emerging market giants leveraging their geographical or feedstock advantages and investing in new technologies and new capacities. The overcapacity is going to be in countries like US, where 20-30 year old plants are operating. Suddenly, they now have to compete with units that are 5 times bigger and working on state-of-the-art technology operating out of some faraway place. I think there will be tremendous transformation in the Americas and Europe in the commodity chemicals business.

As regards Huntsman, we used to be this segment of the chemicals industry till few years back. However, when I saw these new facilities coming up in India and the Middle East, I realised there was no way our ageing plants could compete against them. As a result, two years back we got out of all those commodity businesses and moved on to the specialty chemicals.

Now most of our products are now based on technology, innovation, where the size doesn’t matter. We manufacture them India, China, Saudi Arabia, Europe but our cost is pretty much the same all around the world. That’s the difference between a commodity and specialty business.

So you think the chemical companies in the US and Europe would focus only on the specialty chemicals in the future?

Yes, I think so. The specialty chemicals industry today is 30% in US, 40% in EU and rest in Asia-Pacific . Here the competition is not on price or raw materials, but on product technology and innovation. In the commodity space if one processes two or three raw materials, we have fifty or sixty raw materials, which come together. This is an industry, which is good for companies with a global footprint and the demand for these are global.

However, the rules of the game are totally different here. The customers, suppliers, transportation needs, the development, research efforts — everything differs. Hence it is very difficult to change over from commodities to specialties quickly . Huntsman had been in this for the past 15-20 years developing new technologies and innovating, so the changeover became possible. If you are not already in it today, it is going to be difficult to get in it in future.

What are Huntsman’s plans for India?

Just ten years ago we had less than 10 employees in India. That number rose to 250 three years back and as of now we have around 1500 associates here in India. Our sales also grew rapidly in the period to nearly $500 million at present. Today nearly 50% of Huntsman’s Indian business comes from chemicals catering to the textiles industry. Within next five years we plan to double our sales in India to $1 billion. We will be investing in excess of $100 million over next five years, which will be for not just expanding capacities and strengthening the R&D , but also for mergers and acquisitions.

What role do you think environmental concerns will play in the future of the chemical industry?

Environmental concerns are surely playing a great role in the working of the chemical industry today At Huntsman we have always tried to move away from petroleum feedstock to bio-based sources such as glycerine, bio-diesel , vegetable oils and bio-ethanol , to name a few. We are also exploring other renewable fuel technologies as well as agri-feedstock to make more of our products bio-based . Other efforts include high performance lighter products for improving aircrafts’ fuel efficiency or innovative composites and resins for fuel cell applications.

Environmental issues are going to be equally important in India or China in coming years as they are in the US or Europe. If you go to Sierra Nevada mountain in California, nearly 30% of small particulate pollutants found there have their origins in the China’s coal burning power plants. Hence this is no longer a regional problem but rather a global problem. Having stringent and uniform environmental norms will certainly help the chemicals industry. This will encourage introduction of better technologies and a much more responsible attitude from the chemical companies.

What are your views on the climate change?

Well, the chemical industry can either be part of the problem or part of the solution. Right now, I believe some companies are being part of the problem while others are part of the solution. Too many countries and companies are fighting against the environmental initiatives presently. But in my opinion, we are already beyond the argument stage with climate change. Crude oil is a dangerous raw material! We need to get away from it as quickly as we can. And it is not just about pollution; dependence on oil is also putting the reins of our future economic growth in the hands of unfriendly countries.

I don’t understand why the US doesn’t take more initiatives in this area. We are 5% of the world’s population, produce 8% of world’s oil but consume 25% of the world’s oil. Why don’t we take lead in this? We don’t have any right to ask countries like India to take the first step.

... but if not oil then what?

Part of this is looking for alternatives to oil, but there is not enough solar, wind energy to replace it fully. The other part is to use oil judiciously, conserve it. But our mentality towards oil consumption needs to change. In a place like Texas when it is extremely hot in the summer, we have freezing cold inside the buildings. Do we really need that? Huntsman is one of the largest producers of polyurethane foam, which is one of the most efficient insulating materials.

We are developing paints and coatings for roofs that will be able to reflect heat in the sunlight. The oil conserved through these methods will be equivalent of taking a quarter of all cars in the world off the road. The US alone can save nearly 3-4 million barrels of oil every day, if we have the same driving standards as in the Europe — that’s more than what India consumes today.

Some change is already becoming visible. For example, in the US government’s cash for clunkers programmes, we saw people getting rid of their low mileage vehicles such as pick-up trucks and SUVs replacing them with Hondas and Toyotas. That underlines the change in the mindset. America needs to be bold and take the lead in petroleum conservation because we consume the most in the world.

Top 10 Diwali Stocks

Call them firecrackers. Diwali related stocks — paints, wood and consumer durables — outperformed all BSE Sensex, BSE Mid Cap and Small Cap indices during this year, thanks to strong domestic consumption.

According to a SundayET analysis of all stocks from industries such as paints, wood and consumer durables gave year-to-date return of 106%, whereas, the Sensex and BSE Mid-Cap Index appreciated by around 70% and 91%, respectively, during the same period. Also, these Diwali related stocks outperformed the BSE Small-Cap Index with significant margins. BSE Small-Cap Index went up by around 95%.

As far as individual companies are concerned, among consumer durables, Whirlpool of India and Gandhimathi Appliances, a key player in the stainless steel appliances segment, posted a return of 298% and 237%, respectively, during the period.

Whirlpool of India


Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price
History
Gain for year to date in %: 297.65


Gandhimathi Appliances:

Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price History
Gain for year to date in %: 236.57


Bajaj Electricals:

Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price History
Gain for year to date in %: 233.96


Symphony Comfort Systems:

Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price History
Gain for year to date in %: 214.26


Panasonic Home Appliances Ind Co

Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price History
Gain for year to date in %: 163.54


Hawkins Cookers:

Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price History
Gain for year to date in %: 161.15

Khaitan Electricals:

Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price History
Gain for year to date in %: 147.19

Blue Star:

Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price History
Gain for year to date in %: 134.43

Greenply Industries:

Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price History
Gain for year to date in %: 130.59

Novopan Industries:

Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price History
Gain for year to date in %: 127.77

The 25 winners in the slowdown - Indian companies

When the global economic slowdown hit Indian shores, the performance record of India Inc got reshuffled like a pack of cards. But there are some individual corporates who rode out the storm and have emerged as winners.

We at SundayET crunched six different set of figures and spoke to the backroom boys — and we added to that a ranking of BSE 500 companies, all this to see who in India Inc rode out the storm and came up winners in terms of overall performance. Here’s what we found: companies that managed to emerge winners or hold on to their turf, did so on the basis of a paradigm shift — or to put it simply, a change in their corporate strategy.

The winners in the slowdown conundrum that took the top 10 positions, a couple surprisingly so, include Reliance Industries, Indian Oil Corporation, NTPC, MMTC, Bharti Airtel, NMDC, State Bank of India, Bharat Heavy Electricals Limited, Infosys Technologies and Larsen & Toubro.

Following are the top 25 companies that managed to emerge winners or hold on to their turf during the global economic slowdown.

Reliance Industries:

Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price History

Ranking in 2009: 1
Net sales growth during FY09: 9.63%
Net profit growth during FY09: 2.27%

Reliance Industries, although, did not show any impressive growth figures but the absolute numbers have been so large that there was no close competition and so it made the top billing quite easily. The net sales of Reliance Industries went up by merely 10% in FY09, whereas, net profit grew by just 2%. And while stocks of Reliance Industries did not perform remarkably well during the last one-year, the market capitalization appreciated by 3%.

Indian Oil Corporation:

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Ranking in 2009: 2
Net sales growth during FY09: 16.13%
Net profit growth during FY09: -57.64%

The second ranker, Indian Oil Corporation (IOC) posted a net sales growth of 16% during FY09 against 14% a year ago. However, though there was a dip in net profit in FY09, the market performance was impressive. The market capitalization of the company went up by 48%.

NTPC:

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Ranking in 2009: 3
Net sales growth during FY09: 13.87%
Net profit growth during FY09: 10.61%

National Thermal Power Corporation (NTPC) was at third position. In fact, NTPC gave cut-throat competition to IOC. The performance of NTPC in the ranking was much better than IOC on every front, but since net sales of IOC was much higher than that of NTPC, IOC scored higher. As far as financial performance of NTPC was concerned, net sales and net profit grew by around 14% and 11% respectively during FY09.

MMTC:

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Ranking in 2009: 4
Net sales growth during FY09: 39.69%
Net profit growth during FY09: -17.49%

India's largest international trading company MMTC Limited was at fourth position.

Bharti Airtel:

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Ranking in 2009: 5
Net sales growth during FY09: 32.33%
Net profit growth during FY09: 24.02%

Telecom major, Bharti Airtel, which posted an impressive financial performance, however, failed to rake in good returns for its investors, as performance on Dalal Street was poor. The market capitalisation of the company declined marginally.

NMDC:

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Ranking in 2009: 6
Net sales growth during FY09: 32.44%
Net profit growth during FY09: 34.49%

State-owned mining company National Mineral Development Corporation Limited (NMDC) was at sixth position.

State Bank of India:

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Ranking in 2009: 7
Net sales growth during FY09: 30.31%
Net profit growth during FY09: 35.55%

Not just size but also the robust growth of State Bank of India (SBI), the largest bank in India, helped it to feature among the top ten league at the 7th position. It maintained 30% growth in its net sales and net profit. In fact, the market capitalization also increased by almost the same percentage.

Bharat Heavy Electricals:

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Ranking in 2009: 8
Net sales growth during FY09: 35.25%
Net profit growth during FY09: 9.75%

India's largest engineering and manufacturing enterprise in the energy-related and infrastructure sector, Bharat Heavy Electricals Limited (BHEL) was at eighth position.

Infosys Technologies:

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Ranking in 2009: 9
Net sales growth during FY09: 29.50%
Net profit growth during FY09: 30.18%

Bangalore-based multinational information technology services company Infosys Technologies was at ninth position.

Larsen & Toubro:

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Ranking in 2009: 10
Net sales growth during FY09: 35.65%
Net profit growth during FY09: 60.19%

India-based conglomerate in engineering and construction sector, Larsen & Toubro was at tenth position.

ICICI Bank:

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Ranking in 2009: 11
Net sales growth during FY09: 0.99%
Net profit growth during FY09: -9.61%

Among the other top rankers in the banking industry was ICICI Bank with 11th position.

Steel Authority of India:

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Ranking in 2009: 12
Net sales growth during FY09: 9.93%
Net profit growth during FY09: -18.07%

India's largest integrated iron and steel producer Steel Authority of India (SAIL) was at 12th position.

Bharat Petroleum Corporation:

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Ranking in 2009: 13
Net sales growth during FY09: 16.72%
Net profit growth during FY09: -53.44%

State-owned oil retailer Bharat Petroleum Corporation Limited (BPCL) was at 13th position.

Tata Consultancy Services:

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Ranking in 2009: 14
Net sales growth during FY09: 22.49%
Net profit growth during FY09: 4.16%

Asia's largest provider of information technology and business process outsourcing services, Tata Consultancy Services (TCS), was at 14th position.

ITC:

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Ranking in 2009: 15
Net sales growth during FY09: 9.88%
Net profit growth during FY09: 4.60%

Indian conglomerate ITC Limited, which previously stood for Imperial Tobacco Company of India Limited, was at 15th position.

Hindustan Petroleum Corporation:

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Ranking in 2009: 16
Net sales growth during FY09: 13.05%
Net profit growth during FY09: -49.34%

State-owned oil marketing company Hindustan Petroleum Corporation Limited (HPCL) was at 16th position.

Reliance Communications:

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Ranking in 2009: 17
Net sales growth during FY09: 1.45%
Net profit growth during FY09: -9.03%

Anil Dhirubhai Ambani Group's Reliance Communications (formerly Reliance Infocomm) was at 17th position.

HDFC Bank:

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Ranking in 2009: 18
Net sales growth during FY09: 61.47%
Net profit growth during FY09: 41.18%

Among the other top rankers in the banking industry was HDFC Bank with 18th position. HDFC Bank not only showed healthy financial results but also gave good returns in terms of appreciation in the market capitalization . It gave a return of over 30% in the last one year. Paresh Sukthankar, executive director, HDFC Bank said, “What really helped us was not what we did during the slowdown period itself, but what we did not do during the preceding boom period. We moderated our growth rates in certain areas while continuing to invest in growing businesses. We almost doubled our distribution network from 761 to 1,412 branches organically and through the Centurion Bank of Punjab (CBoP) merger. As retail loan demand picks up, we are extremely well entrenched as a market leader in almost all the loan products. In the wholesale customer segment, we see growth in transactional banking, working capital and term loans, and treasury products. With a wider distribution network, multiple customer and product franchises, a growing retail deposit base and a strong capital adequacy ratio of 15.7%, we are well positioned to grow at a healthy clip, particularly as the economy picks up further.”

Housing Development Finance Corporation:

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Ranking in 2009: 19
Net sales growth during FY09: 36.38%
Net profit growth during FY09: -6.31%

The HDFC Gourp holding company Housing Development Finance Corporation Limited (HDFC) was at 19th position.

Wipro:

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Ranking in 2009: 20
Net sales growth during FY09: 20.06%
Net profit growth during FY09: -2.92%

Azim Premji-owned Indian conglomerate in IT sector, Wipro Limited, was at 20th position.

Hindustan Unilever:

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Ranking in 2009: 21
Net sales growth during FY09: 15.37%
Net profit growth during FY09: 10.56%

The almost recession-proof FMCG sector ensured that there was not much of an impact on Hindustan Unilever (HUL). Not just in terms of financial performance, it also fared well in the equity market. Its net sales and net profit grew by 15% and 11% respectively in FY09. Consequently, the company bagged 21st position. Said Harish Manwani, chairman of HUL in the AGM, “India is a diverse country but all of them hope for a better life hence we focus on a strategy called ‘straddling the pyramid.’ Under this we focus on every category.” He further explained it by giving an example; “Wheel caters to the bottom of the pyramid, Rin serves mid-segment and Surf Excel serves the upper strata. Also, in other categories — Hair, Oral Care and Tea — we use the lucrative prices and small unit packs to serve the whole pyramid. In order to lower the cost, we started a new model called ‘Go-To-Market’.”

GAIL (India):

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Ranking in 2009: 22
Net sales growth during FY09: 32.60%
Net profit growth during FY09: 7.77%

India's largest natural gas transportation company GAIL (India) Limited, previously known as Gas Authority of India Ltd, was at 22nd position.

Sterlite Industries (India):

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Ranking in 2009: 23
Net sales growth during FY09: -8.55%
Net profit growth during FY09: 29.93%

Sterlite Industries India Limited, a subsidiary of diversified and integrated metals and mining group Vedanta Resources plc, was at 23rd position.

Maruti Suzuki India:

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Ranking in 2009: 24
Net sales growth during FY09: 13.22%
Net profit growth during FY09: -29.59%

In the auto sector, which was one of the major losers in the slowdown battle, Maruti Suzuki India, the largest domestic car manufacturer, ranked 24th despite the fact that its net profit declined by almost 30%. On the other hand, it showered investors with good returns in the equity market. In the last one year, it gave a return of around 40%. A company spokesperson of Maruti Suzuki India said that reaching new markets, improved products, service development and increasing exports helped them to get the higher ranking. “To sustain the sales level, we penetrated the unexplored local rural market. We also launched a brand new engine (K series engines) and two global car models: A-star and Ritz. Apart from this we enhanced our after sales service network across the nation to support the increasing volumes of sales. On the production front, we expanded our capacities to reach a million units annually. These factors have helped us and we are proud to register an all-time high sales figure of 7,92,167 units during 2008-09.”

Jindal Steel & Power:

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Ranking in 2009: 25
Net sales growth during FY09: 41.44%
Net profit growth during FY09: 24.21%

India's third largest steel manufacuturing company Jindal Steel & Power Limited was at 25th position.