Fw: Express Idea: Auto Component Sector; Call Success and Updates: Oil India, Lumax Auto

 

Express Idea: Auto Component Sector - Set to Zoom Indian auto sector after witnessing tough times in the past couple of years is set to see strong revival from H2 FY15. The key drivers for this growth include 1) improvement in consumer sentiment, 2) pause in diesel price hikes, 3) peaking out of interest rates, 4) pick up in industrial and infrastructure activity and finally 5) partial lifting of ban on mining activities. Internationally too, while developing economies in Africa, Middle East and rest of Asia continue to see strong growth, US is showing robust recovery and Europe is showing signs of stability. Such scenario, we believe, provides large business opportunities for Indian Auto Component manufacturers, which over the years have built a strong reputation with domestic OEMs and also globally. The large caps auto component players, on this premise, have seen a strong re-rating in the past few months leading to widening of valuation discount for small players. Here we pick three such stocks viz Banco Products, MM Forgings and Phoenix Lamps. Recommendation Summary Company CMP (Rs) Target (Rs) Upside Exit trigger* (Rs) Banco Products 155 190 22.6% 130 MM Forgings 447 540 20.8% 375 Phoenix Lamps 133 160 20.3% 110 Horizon: 1-3 months * Exit trigger is the price level below which investor should exit position

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Call Success & Update: Oil India Reco Price Rs600, Previous Target Price Rs650, New Target Price Rs720 We had recommended a BUY on Oil India in Q3 FY14 result update released on February 13, 2014 with a price target of Rs550. We extended the target to Rs600 in a call update released on May 14, 2014 and further to Rs650 in a call update released on May 19, 2014. The stock surpassed our target in today's trading session. We advise investors to hold on to their investments in the company as we remain bullish on its future prospects for a target of Rs720.

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Call Success: Lumax Auto Technologies Reco price Rs200, Call Closure price Rs245 We had recommended a BUY on Lumax Auto Technologies in an Express Idea released on Septermber 02, 2014 with a price target of Rs245. The stock surpassed our target in today's trading session yielding 22.5% return in three trading sessions.

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Warm Regards, Amar Ambani