Tuesday, April 28, 2009

>Smart Ideas (LKP SHARES)

MAY 2009

Focus Issue of the Month

We have analysed the composition of India's GDP and attempted to present the opportunities in each of the components in the wake of the ongoing slowdown in the focus issue for this month.

Company Reports

Integrated business model with robust order booking, which in our view should grow, going forward as revenues from government contracts start kicking in and the company would strengthen its market leadership. BIL growing at 75% and trading at 5xFY09E is an attractive investment bet.

With a dominant position in the railway haulage business we expect Concor to benefit from the growth in the logistics space driven by port capacity additions.

We expect the domestic rural demand to partly offset the lower growth in overseas business going forward given its large share in the ruralmarket and niche positioning.

FAG Bearings
Most profitable and de-risked bearing company trading at 4.5xCY'10E earnings is well placed to capitalize on an upturn in demand from its well diversified user industries.

The market leader in tyres should be done with the higher raw material inventory this fiscal and in our view the first half has seen the worst at MRF.

MIC Electronics
The pioneer in LED having seen the worst of the global credit crunch on its overseas business is beefing up its product offerings for the emerging opportunities in India.

SKF India
Investment phase in a highly challenging business environment would in our view enable the market leader to reap the benefits from next fiscal onwards.

Although gas supply and tariff structure regulations remain a concern, we believe that newer sources of gas supply would add to the top-line and we remain optimistic.

To see full report: SMART IDEAS