Stock Recommendations For Your Portfolio

Motherson Sumi Systems | BSE Code: 517334 | Volume: 162039 | CMP: Rs 194

Motherson Sumi Systems’ (MSS) posted robust results for the quarter ended December 2013. Its consolidated revenues grew by 19.9 per cent on YoY basis to stand at Rs 7990 crore. The revenues posted by the company have been well above the street expectations. Coming to the operating profit front, the EBITDA margins expanded by 200 basis points on YoY basis to stand at 9.6 per cent for Q3FY14.The bottomline grew by 65 per cent on YoY basis to stand at Rs 230 crore. The better than expected performance is led by SMR (Samvardhana Motherson Reflectec). SMR posted 10.1 per cent adjusted EBITDA margin. Its revenues were boosted by higher utilisation at its newer plants and better forex realisations which were up by 30.2 per cent on YoY basis. The other division SMP (Samvardhana Motherson Peguform) registered an adjusted EBITDA margin which improved by 190 bps on YoY basis. Recovery in European automotive production ahead could benefit both these companies. One can look at the stock from a medium term perspective.

Glenmark Pharmaceuticals | BSE Code: 532296 | Volume: 126557 | CMP: Rs 549  

The quarterly numbers for Glenmark Pharmaceuticals has remained robust for December 2013. The revenue for Q3FY14 grew by 20 per cent on YoY basis. The performance was mainly driven by better show that the company’s European operations have witnessed. In this region the business grew by 58 per cent on YoY basis. Its API business (excluding USD 1 million from Crofelemer API supply to Salix) grew 48 per cent, while domestic business grew 15 per cent on YoY basis, led by strong growth in covered therapies. This is notable as the industry has witnessed slowdown. Also, in this quarter we have seen the US operations turning after remaining stagnant for the past six quarters. Given the fact that the US is one of the key growth drivers, it is imperative that the approval/launch run-rate picks up in this market for the company’s valuation to sustain going forward. One can look at the stock from a medium term perspective.