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 Healthcare and Entertainment sectors.

IPCA Laboratories
BSE CODE: 524494 | Volume: 17384 | CMP: Rs 448

Ipca Laboratories has witnessed a consistent improvement in its profitability along with strong growth in its business. The key business segments of the company, viz. its international formulation business and the domestic formulation business are likely to do well over the next couple of years. Going forward, there is a healthy ramp-up expected in IPCA's international formulations revenues. Though small in size, branded formulations is one of the most profitable businesses for IPCA, with an EBITDA margin of around 28 per cent. The US market remains its key growth driver over the medium-to-long term. The company has a very small base and strong vertical integration capabilities that offer it a cost advantage. With regard to the domestic formulations business, the company has consistently outperformed the industry in the past, led by a rising share of chronic segments, product selection, an increase in the field force and brand building activity. These factors will be major triggers for the stock going forward. One can look at the scrip from a medium-term perspective.

DISH TV INDIA
BSE CODE: 532839 | Volume: 343451 | CMP: Rs 78

With around 23 per cent share in gross subscriber additions in the six player DTH market, Dish TV is likely to witness better growth going forward. Incremental subscribers from digitalisation would further pump up its base. The DTH industry has garnered around 20 per cent of incremental analogue subscriber during Phase I of digitisation, and a similar share in Phase II also cannot be ruled out. The package price hikes initiated in July 2012 have started to yield results. The reported average revenue per user (ARPU) for the company improved from Rs 152 in Q4FY12 to Rs 159 in Q2FY13, and a further improvement is expected. Dish TV is a market leader in the DTH industry, with a market share of around 25-26 per cent. Dish TV also has the highest HD channel capacity of 40 channels. A strong distribution network is an added advantage. One can look at the scrip from a medium-term perspective.