Hot Chips - Stock Recommendations For Your Portfolio

COX & KINGS
BSE CODE: 533144 | Volume : 29758 | CMP: Rs 137

The Indian operations of Cox & Kings (C&K) are expected to post 21 per cent revenue CAGR driven by rising disposable incomes and a growing share of the organised travel segment. With the acquisition of Holidaybreak (HBR), the company has opened four new operating divisions, viz. education, adventure, short hotel breaks and camping, which have leading positions in UK and other major European markets. These divisions are likely to provide better growth opportunities for the company going forward. In August 2012, C&K roped in a PE fund to invest USD 138 million to acquire a minority stake in Prometheon Holdings UK, which owns a stake in HBR. The investment proceeds would largely be used to retire debt raised by Prometheon for the acquisition of HBR. With the onset of the festive/holiday season, the stock is likely to witness better movement going forward as far as its price is concerned. One can look at the scrip from the medium-term perspective.

JK LAKSHMI CEMENT 
BSE CODE: 500380 | Volume: 37042 | CMP: Rs 122

With a strong presence in the northern, eastern and western regions of the country, JK Lakshmi Cement (JKLC) is likely to benefit from improved demand in its key markets, which in turn would support higher dispatches and realisations. The improvement in the demand outlook of real estate and the commencement of new infrastructure projects is likely to benefit companies like JKLC. It is nearly doubling its capacity to 10 mtpa by FY15, which includes 2.7 mtpa expansion plans in Durg (Chattisgarh), establishing its presence in the high yield eastern market. Higher demand coupled with a tight demand‐supply scenario is likely to translate into better utilisations, which will improve the pricing power for producers catering to these regions. The company trades at a significant discount to its south-based peers in terms of EV/tonne basis. One can look at the scrip from a medium-term perspective.