Hot Chips - Stock Recommendations For Your Portfolio

DSIJ selects 2 aggressive stocks picks in every issue, with a 7-15 day horizon based upon the bullish trend during that period. For this issue, we are recommending companies from the food & beverages and auto ancillaries sectors.

GLAXOSMITHKLINE CONSUMER
BSE Code: 500676 | Volume: 343 | CMP: Rs 2647

GlaxoSmithKline Consumer Healthcare is planning to focus on the breakfast and snack segments as its next growth drivers in India. The change in the consumption pattern of the Indian consumers towards nutritious products provides a huge scope for the company in the said segments going forward. It is planning to roll out a slew of products that will be positioned as healthy and nutritious. The existing products like Horlicks, Horlicks Biscuits, Boost, Maltova, Viva, Crocin, Eno and Iodex are all well-established brands with a prominent market share in their respective categories.

The company is investing heavily in north and western India to gain market share, as it is heavily dependent on the southern and eastern regions as of now. For this reason, it has planned a capex of Rs 400 crore over the next couple of years to compete with its peers in this sector. Investors can look at the scrip from a medium-term perspective.

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BALKRISHNA INDUSTRIES
BSE Code: 502355 | Volume: 11636 | CMP: Rs 260

With an order book of Rs 1400 crore, Balkrishna Industries is all set to enter the next orbit of growth. Its greenfield expansion project of 120000 MTPA is progressing well, and is expected to be completed by H2FY13, which will provide the company with incremental revenue generation scope, and will in turn, act as a trigger for the stock. The up-move in the volumes can be attributed primarily to the de-bottlenecking and upgradation activities undertaken by the company across all its manufacturing facilities. As a result of this, the total achievable capacity has increased to 144000 TPA as compared to 120000 TPA earlier.

For the current quarter, the agricultural segment constituted 63 per cent of its revenues, followed by off-the-road tyres (33 per cent) and others (four per cent). The management is confident that there will be no impact of the Euro zone crisis on its overall volumes, as the company is aggressively focussing on other geographies. Investors can look at the scrip from a medium-term perspective.

*Highest price after our recommendations
(Closing price of June 13, 2012)

The scrips in this column have been recommended with a short-term investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.