Two stocks that can help make money in medium to long term: Siddharth Sedani, Anand Rathi
In a chat with ET Now, Siddharth Sedani, Anand Rathi, says Britannia Industries and UPL are the two of his wealth creation ideas.
Edited excerpts:
What is the first stock you recommend from the FMCG pocket?
First is Britannia Industries. If you look at the Q4 numbers, the volume growth is expected to be around 4% and revenue growth around 18.5%. Demonetisation will impact the numbers a little bit but overall if you look at the January to March quarter, in terms of rising input prices, it is negated and offset by the hike in input costs. The premiumisation of the products has helped gain a market share for Britannia and they have increased their market share by 150 bps against Parle. Overall, in terms of new product launches and product mix, Britannia looks very interesting with a medium to long term horizon and a target of Rs 3750.
Why are you recommending UPL at current levels?
UPL is my second wealth creation idea. We are quite optimistic on the rural theme. We believe in terms of agri inputs and crop protection, UPL fits the bill. Exports account for 75% odd production , while 20-25% is for domestic market. We believe UPL can grow 19% CAGR in terms of sales is concerned for next two years. Margins can be intact around 22% to 23% in terms of EBITDA operating margins. With 13 times FY19 valuation, UPL in terms of rural theme and agri inputs looks very interesting with a target of Rs 1095.
Edited excerpts:
What is the first stock you recommend from the FMCG pocket?
First is Britannia Industries. If you look at the Q4 numbers, the volume growth is expected to be around 4% and revenue growth around 18.5%. Demonetisation will impact the numbers a little bit but overall if you look at the January to March quarter, in terms of rising input prices, it is negated and offset by the hike in input costs. The premiumisation of the products has helped gain a market share for Britannia and they have increased their market share by 150 bps against Parle. Overall, in terms of new product launches and product mix, Britannia looks very interesting with a medium to long term horizon and a target of Rs 3750.
Why are you recommending UPL at current levels?
UPL is my second wealth creation idea. We are quite optimistic on the rural theme. We believe in terms of agri inputs and crop protection, UPL fits the bill. Exports account for 75% odd production , while 20-25% is for domestic market. We believe UPL can grow 19% CAGR in terms of sales is concerned for next two years. Margins can be intact around 22% to 23% in terms of EBITDA operating margins. With 13 times FY19 valuation, UPL in terms of rural theme and agri inputs looks very interesting with a target of Rs 1095.
