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 IT and FMCG sectors.

KPIT CUMMINS INFOSYSTEMS | BSE Code: 532400 | Volume: 1849000 | CMP: Rs 102

KPIT Cummins Infosystems (KPIT) has beaten its guidance for FY12 and has further improved upon what it expects in FY13. Accordingly, the management sees a revenue growth of 2.5x more than the NASSCOM estimates. The company expects 32-35 per cent YoY growth in USD terms to touch USD 408-418 million, whereas its guidance for PAT points to a 15-20 per cent YoY growth in INR terms for the current fiscal FY13. This expectation is based on the assumption of the INR/USD rate being at 50. The guidance also factors in other issues like the visa wage hike expected to kick in during Q1FY13. The revenues from the inorganic route are expected to be around USD 40 million in FY13. Revolo, the hybrid car kit, has initiated 200 vehicle conversion projects in April 2012 for trial upto six months. The interest of OEMs in this product too has been high after the Auto Expo earlier this year. Discussions with government on this front are progressing as per the plans. One can look at the scrip with a medium-term perspective.

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HINDUSTAN UNILEVER | BSE Code: 500696 | Volume: 405000 | CMP: Rs 425

FMCG giant, Hindustan Unilever, has come up with a good performance for the quarter ended March 2012. The core soaps and detergents segment, which contributes to around 49 per cent of its revenues, outperformed the industry by registering 28.4 per cent YoY growth. The personal products segment performed well, led primarily by a strong growth in skin care, which saw double digit growth in all the key brands – Fair and Lovely, Vaseline and Ponds. The operating margins for the quarter expanded by 130 basis points, fuelled by an 80 basis points reduction in overhead costs and advertising spends. The expansion could have been even better but for the 70 basis points increase in raw material costs. These factors are likely to act as catalysts that will create further interest in the stock going forward. One can look at the scrip with a medium-term perspective.