10000 to 4crs in 18 months 1000rs to 50crs 300% returns 75% promoter holdings A 50 bagger A sureshot 5 bagger Analysis Another fraud? Auto ancillaries Bank sector Blind sell Brand plays Broking Bse Nse Buy calls cements Ceramics/tiles Counters I don't like Debt free businesses Delisting candidates demerger bets Disclosure- I own them Domestic consumption plays E-Commerce pick Education Exit at rallies Famous analysts Famous stocks FMCG Footwear future multibaggers Gems andJewellery Hidden gems High conviction ideas High dividend plays High potential small caps High ROE stocks Holding companies Hotel sector How they looted you.. Indian stock market Infrastructure sector Interesting Microcaps IT KPO Landbank plays largecap ideas Less than 5 PE stocks Liquor Logistics Market lessons Market outlook for 2013 and 2014 Market underperformers Meeting with the CEO Metals Monopoly businesses My 5 baggers My Favourite counters My paid stock recommendations My stock picking techniques nse bse tips Oil exploration Operator calls Paints Penny stock outlook penny stock updates Pharma sector Poultry stocks PSU Publicity freaks Real estate Renewable energy plays Safe bets Sell recommendations Share market Live shipping stocks short term call SOTP plays stock tips stock under 10rs Stocks to watch out for Strong bonus candidates Takeover candidates TATA product tea Textiles The 13 bagger The 45 bagger Trading companies Transformers Turnaround bets Tyres Uncertain/Risky business models Unique businesses

Search This Blog(Over 800 companies covered in the blog).

Archives : Old artciles

Saturday, October 10, 2009

ITC and United Spirits:Future growth prospects and outlook

1)Scripscan:ITC Ltd

Story:FMCG stocks have dropped on rainfall concerns; so has ITC, despite no correlation between cigarette sales and monsoon. There is concern that competition will increase for ITC as Marlboro cigarettes, earlier available via imports, will now be produced and distributed locally, by Godfrey Phillips India.I believe the impact on ITC will be minor and stretched over a long period. If this happens, ITC has the flexibility to offset it with price increases without affecting volumes meaningfully. The company has already implemented an average price increase of 5% (Bristol and Goldflake Kings prices taken up 10-20%) which is factored into the forecasts. The potential for price increase on other brands (Scissors, Navy Cut, Capstan), which represent a third of sales and which have seen no price hikes for over two years, represents scope for EPS upside of 5% on an annualised basis in the estimates.A good hold as of now.

2)Scripscan:United Spirits Ltd

Story:United Spirits reported consolidated PAT loss of Rs 410 crore during FY09 which is disappointing. This loss was largely on account of certain non-recurring charges at Whyte & Mackay. Adjusting for the non-recurring expenses, PBT was Rs 280 crore during FY09 (-39% y-o-y).I believe this could be on account of a rupee depreciation versus the US dollar and higher working capital loans.I await more details from the FY09 annual report which is not yet available. While there is a probability of write-backs for forex losses as current forex movements have turned favourable, UNSP''s plans of de-leveraging could limit the extent of write-backs. In case of pension liabilities, if losses continue then the company will have to make increased contributions to meet the deficit. The company has also made some changes in the balance sheet in terms of increase in investments, reversal of goodwill, and accounting of IPL franchise rights as intangible assets to be amortized over 50 years and increase in liabilities due to IPL franchise ownership.I hope to get detailed disclosures on the same in the annual report in order to assess the impact of these changes in the balance sheet. Pending concerns on balance sheet leverage are likely to cap gains from any improvement in domestic operations. News flow on UNSP''s efforts to de-leverage should keep the stock volatile in the near term.A sell on rally counter as of now.

Important Disclaimer&Privacy policy

This blog does not share personal information with third parties nor do we store any information about your visit to this blog other than to analyze and optimize your content and reading experience through the use of cookies.You can turn off the use of cookies at anytime by changing your specific browser settings.This privacy policy is subject to change without notice and was last updated on 20.3.2013. If you have any questions, feel free to contact me directly here: Investment in equity shares has its own risks.Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that I consider reliable. I,however,do not vouch for the accuracy or the completeness thereof.This material is for personal information and am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.The stock price projections shown are not necessarily indicative of future price performance.The information herein, together with all estimates and forecasts, can change without notice.

Subscription to Arunthestocksguru

Enter your email address:

Delivered by FeedBurner