Stock Recommendations For Your Portfolio

Amara Raja Batteries | BSE Code: 500008 | Volume: 12165 | CMP: Rs 320

Amara Raja Batteries (ARBL) has posted a decent set of numbers in Q2FY14, which itself is enough to bring it to the notice of investors. During the quarter, the company witnessed a 12.3 per cent growth in its topline on a YoY basis to touch at Rs 810 crore. This was mainly driven by the strong demand in auto replacements and a good performance of the industrial segment, both registering double-digit growth. ARBL has reported robust EBITDA margins, which stood at 17.6 per cent, higher by 120 basis points YoY. The primary reasons behind this were better gross margins due to a lower share of traded revenues and higher share of auto replacement sales. With a good product portfolio, higher replacement exposure and decent industrial demand, the company is likely to be more in focus with the investor community as compared to its peers. The stock has long been consolidating in a range. Following the Q2 results, the markets are expecting it to take a northward trajectory in the near term. One can look at the stock from a medium-term perspective.

VST Tillers Tractors | BSE Code: 531266 | Volume: 4164 | CMP: Rs 598  

VST Tillers Tractors is another company that is likely to remain in limelight after reporting a strong performance for Q2FY14. During the quarter, its revenue grew by 71.2 per cent on a YoY basis to stand at Rs 152.1 crore and the bottomline showed a whopping growth of 175 per cent YoY to stand at Rs 18.1 crore. These numbers were driven by strong sales volume growth in power tillers. In September quarter, this segment witnessed 87 per cent YoY growth in sales volumes, while the volumes growth for tractors sold was at 42 per cent YoY. Despite a decent demand, the tractor sales were affected in H1 by disruption in the supply of critical components like steering. However, with the recently introduced 22 HP tractor, which has received an encouraging response along with the existing 18.5 HP model, VST expects to sell over 8000 tractors in FY14 as against 3370 in H1FY14. The EBIDTA grew 172 per cent on a YoY basis to Rs 26.73 crore, and its EBIDTA margins were also higher at 17.6 per cent. One can look at the stock from a medium-term perspective.