Stock Recommendations For Your Portfolio

Kansai Nerolac Paints | BSE CODE: 500165| Volume:175 | CMP:Rs 1076.00

With the festive season sounding its bugle, it is a good time to look for stocks in the paints sector. Kansai Nerolac Paints is one stock from this sector that is likely to catch the attention of investors. The volumes in the counter have seen an uptick, which proves our point. After some not so encouraging numbers in Q1FY14, the stock has remained an underperformer and the prices have corrected considerably. The company’s foreign promoters, viz. Kansai Paints Company, currently have 69 per cent stakeholding in the company. Following the recent development, where the RBI has allowed non-residents who are controlling shareholders in a company to buy additional stake in the market through the FDI route without needing prior RBI approval, the promoters can now increase their stake to 75 per cent. This can act as a trigger for the prices in the near-to-medium term. The volumes growth of the company is also likely to improve going forward. Thus, the stock can be a good medium-term pick

Mahindra & Mahindra Financial Services| BSE CODE: 532720| Volume:79000| CMP:Rs 254.00

Mahindra & Mahindra Financial Services is a company poised for better growth, given its deep rural penetration and niche operating model. It is well placed in terms of its asset-liability management profile coupled with adequate pricing power. This is also likely to mitigate the impact of the rising cost of funds. The rural markets are helping the company to maintain its market share in the car/auto segments. The tractors segment has bounced back and is registering above average growth. Commercial vehicles and construction equipment, however, are facing some pressure, though small CVs have remained steady. The management is expecting around 20 per cent growth in the car segment and is working hard to maintain their market share and increase the reach further. The company is also focusing on the used vehicles segment, which is likely to be value accretive going forward. The strategy of making deeper and broader inroads will also help offset competitive pressure going forward. One can consider investing in this stock from a medium-term perspective.