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 Chemical and Agriculture sectors.

PIDILITE INDUSTRIES
BSE CODE: 500331 | Volume: 135614 | CMP: Rs 211

Pidilite Industries is well poised to be a worthy investment option for investors. Its flagship product Fevicol reported a very strong volume growth of 13-14 per cent in sales during Q1FY13. The company recently hiked its product prices by two per cent to tide over higher raw material prices. In the construction chemicals business, it has clocked a 30 per cent CAGR over the past five years. The company expects similar growth to continue going forward. Its international units are also doing well on the revenue as well as the EBITDA fronts. Brazil, of course, has been an exception, which is undoubtedly expected to deliver results but maybe a couple of years down the line. Carpenters form the single largest customer segment for Pidilite. B2C currently forms around 80 per cent of its turnover. The capex plans for tFY13 stands in the range of Rs 125-150 crore. One can look at the scrip from a medium-term perspective.

TATA GLOBAL BEVERAGES
BSE CODE: 500800 | Volume: 1138283 | CMP: Rs 145

With multiple acquisitions of different sizes and scales over a period of time, Tata Global Beverages has emerged as a branded player with diversified revenue streams across geographies. A focussed strategy of category expansion and innovative new beverage products such as Tata Water Plus and Tetley Chai Latte will continue to drive the company’s growth ahead. Key strategic alliances will also create new opportunities for future development. Earlier this year, it entered into a 50:50 JV with US-based Starbucks Coffee Company as well as a JV with Pepsi Co India to launch health beverages. These alliances are likely to add to its financials going forward. In Q1FY13, the topline went up by 18 per cent to Rs 1725 crore, following favourable translation impact and improved performance in most major markets. The bottomline stood at Rs 153 crore, up by 55 per cent mainly due to improved operating performance. One can look at the scrip from a medium-term perspective.