Stock Recommendations For Your Portfolio

MAGMA FINCORP | BSE CODE: 524000 | Volume: 2578 | CMP: Rs 88.60  

Magma Fincorp’s diversified network of 263 branches will help it improve its market share and increase its reach and disbursement going forward. The company now offers loans against cars, commercial vehicle, tractors, Used CVs, construction equipment, SMEs, gold loans and home loans. This kind of product portfolio is likely to provide the company a balanced loan book growth whenever there is a slowdown in one of the products. It is being said that the addition of new high volume and high margin businesses like gold finance, general insurance and housing finance will reduce volatility due to product cycles which in turn will ensure cross selling of products by leveraging the existing branch network and resources. The general insurance business is also doing well since its inception in September 2012, as it has achieved a premium collection of Rs 100 crore. The acquisition of GE Money housing finance and GE Money financial services is a strategic fit for entrance into housing finance market which will create value going forward. One can look at the stock from a medium-term perspective.

The consolidated revenue for Idea Cellular grew by 8.7 per cent on a sequential basis, mainly driven by an increase in its wireless revenues which grew by more than 10 per cent on a QoQ basis. Also, revenues from the established and new circles grew by eight per cent and 12.5 per cent respectively on a QoQ basis. The better EBITDA which grew by more than 13 per cent on a QoQ basis has been quite encouraging. It has reported a 8.5 per cent growth in minutes on network to 143.1 billion, led by 5.7 per cent sequential increase in MoU to 406. The subscriber base grew substantially by 7.7 million on a QoQ basis in Q4FY13. But there has been a significant improvement in the share of VAS which improved to 15.2 per cent as against 14.6 per cent in Q3FY13, driven by robust data growth. Idea reported 4.1 million active 3G subscribers as against 3.7 million subscribers in Q2FY13. We feel that with the better results, it is going to outperform its peers in the near term. One can look at the stock from a medium-term perspective.