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 Banking and FMCG sectors.

KARUR VYSYA BANK
BSE CODE: 590003 | Volume: 12530 | CMP: Rs 439

Karur Vysya Bank (KVB) has adopted a five-point strategy to improve its operational efficiency. The bank has given importance to five thrust areas, which include improvement in the CASA ratio, recovery of NPAs, improving fee-based income, opening new branches and leveraging technology to the maximum. The bank has a network of 451 branches across 13 states and three Union Territories. To strengthen its retail banking arm, it has launched a few new products in FY12. Its educational loans and the NRI home loans offerings have received a good response, and these products are likely to be beneficial going forward too. The bank is following a cautious approach and has shifted its focus to its asset quality. On the performance front, KVB has posted healthy growth over the years. Its interest income reported a CAGR of 30.4 per cent over FY06-12 and its net profit grew at a CAGR of 25.7 per cent over the same period. Investors can look at the scrip from a medium-term perspective.

GODREJ CONSUMER PRODUCTS
BSE CODE: 532424 | Volume: 9619 | CMP: Rs 675

The domestic businesses of Godrej Consumer Products have been the mainstay of its overall business model. But with a presence across global geographies, a better performance on the international business front cannot be ruled out. On the domestic front, its business has witnessed double-digit revenue growth (in its core product categories) consistently over the past several quarters. The revenue growth is likely to be maintained on the back of the high growth of the household insecticides segment and the soaps business. On the international front, the integration of the company’s existing operations with its recent acquisitions in Africa (Darling Group) and Argentina (Cosmetica Nacional) is expected to bring synergies and drive revenues over the next few quarters. One may see a series of new products over the next couple of years, which will benefit the company further. Investors can look at the scrip from medium-term perspective.