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 Cement and Healthcare sectors.

JUBILANT LIFE SCIENCES
BSE Code: 530019 | Volume: 18095 | CMP:171

Jubilant Life Sciences has been able to consistently improve its business over the last five to six quarters. For Q1FY13, its topline grew by 31 per cent on a YoY basis, which was driven by a strong pharma business and a fairly steady performance of its ingredients business. Its EBITDA margin improved by a huge 222 basis points on a YoY basis during the June 2012 quarter. The management expects a strong revenue growth of more than 20 per cent in FY13, along with stable margins.

The company has brought down its capex plan for FY13 to Rs 350 crore as against an average Rs 500 crore that it spent over the past five years. The company has a robust pipeline of products, with 20 approved ANDAs in the US of the total 48 filed. The API filings are also impressive, with 58 USDMFs. We believe that the company is likely to keep up with its performance going forward too and beat the street’s estimates. One can look at the scrip from a medium-term perspective.
 

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ULTRATECH CEMENT
BSE Code: 532538 Volume: 18857 CMP: Rs 1614

UltraTech Cement’s performance for Q1FY13 has been above street estimates with an EBITDA/tonne of Rs 1235 against an estimated Rs 1100. This was mainly driven by higher realisations and costs which were in line with expectations, translating into a PAT of Rs 780 crore. The volumes stood at 10.33 MT and the blended products’ realisations came in at Rs 4913/tonne.

The grey cement realisations have improved by around six per cent on a YoY basis. The topline stood at Rs 5074 crore which grew by 17 per cent, and the PAT stood at Rs 780 crore which grew by 14 per cent on a YoY basis. The EBITDA margins stood at of 25.5 per cent, witnessing a healthy improvement of 180 basis points QoQ. According to the management, the cement industry is likely to grow by over eight per cent in connection with the government’s focus on infrastructure development. One can look at the scrip from a medium term perspective.