Daily Recommendations

Hameed
MARKET BUZZ:

(May not be useful for day-traders.)

Ruchi Soya-Sowing Success

India is the world's fourth largest vegetable oil economy as also the most fragmented one. Ruchi Soya is our bet to drive the consolidation as indeed the shift towards branding in the agri-business has commenced. In a perceived commodity business, the company has exhibited 41% revenue and 30% profit CAGR over the last 15 years.

Business growth will be driven by an increase in per capita income and a shift in consumer preference towards the healthier Soya and other refined oils. Ruchi Soya is a totally integrated play with global scale capacities, strong market understanding, strategically located plants and a growing branded portfolio. At 9.6x FY06E earnings, 5.7x EV/E and 0.4x branded sales; we see value.

Vegetable oils - the opportunity: India is the fourth largest vegetable oil economy with an annual turnover of US$16bn and an EXIM trade of US$3.5bn. Per capita consumption of edible oils and fats, at 12kg/year, is 60% lower than global averages.

India is among the fastest growing markets witnessing a shift in consumer preferences towards the healthier soya and other refined oils. The macro environment has turned favourable with legislation being inclined towards restricting the sale of `loose oils'.

Ruchi Soya - from trading to manufacturing to branding: Ruchi Soya - a pioneer of the soya revolution in India - is migrating its business model from trading to branding.

Given its market leadership status, economies of scale, strategically located production plants, completed capex and strong brands, we see a sharp push-up towards branding in the coming years. We expect 30% 3-year CAGR in branded sales; which would substantially alter the earnings quality.

A branded play trading at commodity valuations - Buy: In a `perceived commodity' business, Ruchi Soya has consistently delivered. We believe the current market capitalization of Rs 5 bn does not justify the scale of its operations (Rs 37bn) as indeed undermines the importance of Rs10bn branded sales. At an EV/E of 5.7x, PER of 9.6x FY06E earnings and market cap/branded sales of 0.4x, we see immense value.

BUY with a 12 month price target of Rs 350, an upside of more than 23 per cent

DBhat:
Rajshree Sugar: (52.65) After heavy consolidation between 62 & 44 on 200dma stock has come out & inching up indicates it's all set for a third dynamic bull wave.

Just grab this 15% dividend paying SUGAR sector stock keeping stop loss of 49 on a closing basis.

All set to shoot up to 92 & 108 in next very few days.
Stock traded both at NSE & BSE: 500354.

Dhunseri Tea: (67) After heavy consolidation between 87 & 50 on 200 dma the stock is all set for third dynamic bull wave.
*Just visit www.bseindia.com & see the mind-boggling results.
* Net Profit up by 325%

* Promoters holding 71.83%
Just grab this 15% dividend paying TEA sector stock keeping stop loss of 63.
All set to shoot up to 110 & 123 in very short span of time.
Stock traded at BSE only: 523736.

Asethi:
Guess if u can ??
1)A sugar stock , name starts from D... now @ Rs. 24 will zoom to Rs. 35 , 40 level very soon.
*Traded @ NSE & BSE.
*Buy this stock in TONS................................... UPPER-FREEZE will continue.
*Yes , all Sugar stocks looking hot only.
2)Who makes Doctor soap ??Stock traded @ BSE...... from this level of Rs. 50 will zoom to 75 , 80+ very very soon. Stock name starts from P