5 shares for financial freedom this independce day

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Stocks for Financial Freedom 5 This Independence Day

Transcript of 5 shares for financial freedom this independce day

Stocks for Financial Freedom

5

This Independence Day

About

It is India's largest private sector entity. Over the years, RIL has grownthrough backward integration in energy chain (textiles, petchem, refiningand E&P) and is now expanding to organized retail and 4G throughReliance Jio. It operates one of the largest refining capacity at a singlelocation and is the largest producer of polyester fiber and yarn

Investment Argument

Considering the strong balance sheet, we expect significant benefits to thecompany on account of these expansions. These investments have apotential to increase the profit of the company by more than double innext 3 to 5 years.

Risk

Since the company has made a huge capital expenditure in its 4G businesswhich involves huge depreciation charge initially leading to pressure onmargins. Also lower crude price will lead to lower profit for energybusiness.

Financials

Reliance Industries

FY CMP Sales OPM EPS PE BVPS PBV EV EV/Sales ROE

2014 03 1,000 4,34,460 8 64 16 614 2 3,44,516 0.8 10

2015 03 1,000 3,75,435 10 73 14 675 1 3,47,436 0.9 10.8

About Apollo Tyres Ltd, is a leading manufacture of Tyres with presence in India,Europe and South Africa

Investment Argument

The company is expected to benefit from rebound in demand for newautomobiles in India. In addition, recent sustainable lower rubber pricesare likely to result significantly better margins in aftermarket. Apollo Tyreshas not participated in the rally of tyre stocks, hence is available quietcheap in comparisons to peers like MRF

RiskApollo Tyres has been recently losing market growth to peers in India. Inaddition any slowdown in Europe may have a significant impact on thecompany.

Financials About

Apollo Tyres

FYCMP Sales OPM EPS PE BVPS PBV EV EV/Sales ROE

2014 03 203 13,412 14 21 9.86 90 2 11,356 0.8 23

2015 03 203 12,726 15 20 9.93 99 2 11,349 0.9 20.6

About

It is the largest Indian bank, with an asset size of ~20lakh cr and thebroadest network of ~16,300 branches. It has diversified businessesthrough life insurance, asset management, credit cards and capitalmarkets space and five regional subsidiary banks

Investment Argument

Despite being a PS, SBI has significant amount of fee income similar toprivate banks. As a result of its diversified business, there is significantvaluation in its other businesses such as insurance, capital markets etc.We expect a turnaround in economic cycle, which will help SBI to growfaster due its strong balance sheet

RiskPublic Sector Banks have weak asset quality so any delay in economicrecovery may impact SBI. Also SBI is looking to grow its home loan book, ifthere is a slowdown in real estate prices, it would have a negative impact

Financials About

State Bank of India

FYCMP Sales OPM EPS PE BVPS PBV EV EV/Sales ROE

2014 03 270 1,89,062 57 19 14 195 1 2,18,531 1.2 10

2015 03 270 2,07,974 53 22 12 213 1 2,21,320 1.1 10.5

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About

Tata Motors DVR is a share with differential rights. It is traded in similarway to how Tata Motors share is traded which own British automobilegiants Jaguar and Land rover. Tata Motors also has a major presence inTruck and Bus segment in India

Investment Argument

Tata Motor DVR trades at 33% discount to main shares, whereas globallyDVR shares trade at a very small discount to the main share. Also thestock is trading in single digit PE of less than 7, in comparison to 20 for theautomobile industry

RiskThere is a bit of uncertainly about the future growth in China for Jaguarand Land rover. Evoque sales have not been as per expectation in Chinaleading to negative sentiment on the stock

Financials About

Tata Motor DVR

FYCMP Sales OPM EPS PE BVPS PBV EV EV/Sales ROE

2014 03 260 2,32,834 15 43.6 5.96 227 2 1,40,038 0.6 22

2015 03 260 2,60,734 15 43.53 5.97 195 2 1,39,502 0.5 25.1

About

It is a global generic pharma company with main business on the US,Europe, Russia and India. Finished dosage and API account for major partof revenues, with up to 60% of sales from overseas operations. It offers aportfolio of products and services including APIs, custom pharmaceuticalservices, generics, biosimilars, differentiated formulations and NCEs

Investment Argument

It aims to scale up its billion dollar US business on the back of a strong product pipeline (68 ANDAs are pending approval, of which, 43 are Para

IVs and 13 are FTFs). The Management expects that domestic business is likely to rebound due to a) field force expansion, b) new product launches

(including biosimilars) and c) focus on brand building

RiskSince it has an significant exposure to Russia and other markets in the

same region, its business got impacted due crisis in Ukraine

Financials About

Dr Reddys Laboratories

FYCMP Sales OPM EPS PE BVPS PBV EV EV/Sales ROE

2014 03 4,066 13,359 24 114 36 461 9 71,467 5.3 25

2015 03 4,066 14,819 17 130 31 653 6 71,739 4.8 19.9

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