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 glass and banking sectors.

PIRAMAL GLASS
BSE Code: 532949 | Volume: 11030 | CMP: Rs 96.50

With a complete transformation of its product bouquet, Piramal Glass (PGL) is shifting from the commoditized low margin Speciality Food & Beverages and Pharma segments to the stable high margin Cosmetics & Perfumery (C&P) segment. The company is attempting to enhance the share of C&P segment to upwards of 50 per cent going forward. PGL has reported an improvement in EBIDTA margins to 21 per cent in Q1FY13 on a QoQ basis. Its Sri Lankan subsidiary reported a robust 31 per cent operating margin as it could successfully pass on the rise in energy costs that had impacted its Q4FY12 performance. The company has completed majority of the capex with the Greenfield addition of C&P capacity and realignment of four existing furnaces. This will allow the company to debottleneck supply in the C&P segment and exploit the huge opportunity and enhance its own competitive edge in both premium and mass segments. One can look at the scrip from a medium term perspective.

CITY UNION BANK
BSE Code: 532210 | Volume: 23271 | CMP: Rs 50

The Q1FY13 results of City Union Bank were slightly better than street expectations. Net Interest Income showed a healthy increase of 15 per cent on a YoY basis for Q1FY13 while PAT grew 26 per cent on a YoY basis. Strong growth in the fee income and significantly lower provisions translated into the banks increased bottom line for the June quarter. Advances grew 33 per cent while Deposits increased 25 per cent on a YoY basis for Q1FY13.

The bank continues to maintain a healthy provision coverage ratio, which is much higher than the required norm. Total slippages during the quarter amounted to Rs 45 crore, however, since a high proportion of loans (around 97 per cent) are secured, the bank should be able to manage its asset quality concerns. One can look at the scrip from a medium term perspective The scrips in this column have been recommended with a short-term investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.

*The scrips in this column have been recommended with a short-term investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.