HotChips - Bajaj Finserv & Cox & Kings

COX & KINGS            BSE Code: 533144           Volume: 3791         CMP: Rs 374

Cox & Kings (C&K) is planning to add 150 franchisees in the next 12-18 months. These franchisees are expected to contribute 15 – 18 per cent of total revenues in the next two to three years. C&K is scouting for global acquisitions to drive its growth and strengthen its position as a leading tour operator in the country. For this purpose, C&K has raised Rs 1200 crore through an IPO, GDR and internal accruals. With acquisitions, starting of a luxury train and the visa processing facility, it is believed that the company is in a sweet spot to benefit from growth in inbound, outbound and domestic travel. Its chartered air-line business, corporate travel, foreign exchange, inbound travel and MICE business are contributing significantly. The MICE business is growing very rapidly in India. Its global presence gives a competitive edge and synergetic advantage to the company against its peers. Looks like a good medium-term investment opportunity.

BAJAJ FINSERV     BSE Code: 532978  Volume: 250000   CMP: Rs 532.25

The most important factor for recommending this company is the recently announced focus on non-banking finance companies being provided with banking licences. On the financial front, the company’s performance may not look good, but the company has a huge growth potential. The company has witnessed a strong NII growth of 51 per cent on a YoY basis on robust loan growth and the loan book stands at Rs 6710 crore at the end of Q3FY11. The deployments also witnessed a strong YoY growth driven by strong disbursements in mortgages and consumer durable loans. Both the life and general insurance arms have witnessed strong revenues. The growth in the insurance segment was mainly driven by improvement in average assets under management and cost control. The company looks to be an ideal candidate to find its place in one’s portfolio for a medium-term perspective.