Diwali Picks By Religare Securities Ltd

Diwali Special Picks - 2014
Buy Axis Bank Ltd For Target Rs.480 CMP 401.60
Buy Ipca Laboratories Ltd For Target Rs. 870 CMP 686.35
Buy Lupin Ltd For Target Rs.1645 CMP 1347.15
Buy Marico Ltd For Target Rs.365 CMP 300.85
Buy Wipro Ltd For Target Rs.700 CMP 565.90

Axis Bank Ltd
Buy Axis Bank Ltd For Target Rs.480 CMP 401.60
• Axis bank aims to increase its share in the financial services sector by continuing to build a strong retail franchise. The segment continues to be one of the key drivers of the Bank’s growth strategy, encompassing a wide range of products delivered through multiple channels to customers.
• The bank has been consistently delivering better-than-industry growth due to its strong retail focus. The performance of the bank was led by strong increase in margins, higher loan growth and improvement in CASA and expense ratio. The bank expects its loan growth to be 20% higher than the industry growth. The stressed loan accumulation may lower than forecasted as the economic conditions improve from here.
• The bank expects that corporate fee income to pick up in H2FY15 on account of increasing demand for corporate loans.

Ipca Laboratories Ltd
Buy Ipca Laboratories Ltd For Target Rs. 870 CMP 686.35
• IPCA Labs posted strong financial numbers in Q1FY15. Its Sales grew by 16% to Rs 935.96 crore (YoY). The growth in sales was broad based on the back of good growth in formulations and APIs. PAT grew by 103% to Rs 145.49 crore (YoY).
• Growth in US market is the major driver for its business and it expects high growth in the next couple of years. Though the company has approval for 18 products from 38 Abbreviated New Drug Applications (ANDAs) filed so far, it has commercialized only 7 and planning to launch few more in the next 3-4 months.
• The Company expects that this year its domestic branded business to grow by 15-17%. The Domestic API business is also expected to grow by 12-13%.

Lupin Ltd
Buy Lupin Ltd For Target Rs.1645 CMP 1347.15
• The US is the largest market for the company accounting for nearly 40% of its revenue. It is planning to improve its share to 50% by developing new limited competition therapies, such as oral contraceptives, dermatology and respiratory care drugs.
• The company plans to maintain an annual launch rate of around 20 products a year and looking at 25% growth in the US generic market. The company is also expanding its footprint in Japan and expects to file 15 new products in the country over the next two years.
• The Company has a pipeline of 116 products (including products approved but not launched) that address a market opportunity of close to USD 80 billion. Of these, 29 ANDAs are first-to-file opportunities addressing a market size of close to USD 15 billion. The Company has 12 exclusive first-to-file opportunities addressing a market opportunity valued at around USD 2 billion.

Marico Ltd
Buy Marico Ltd For Target Rs.365 CMP 300.85
• The company plans to double its revenues over the next four years driven by a mix of organic and inorganic growth. It plans to become an emerging market MNC with focus on Asia and Africa in key categories of hair care, skin nourishment and male grooming.
• During 12 months ended June 2014, Parachute along with Nihar increased its market share by 50bps to 56%. Parachute's share in the rural markets, in the range of 35% to 40%, is lower than that in the urban markets, thus providing potential headroom for growth.
• Saffola Oats, has emerged as a strong no.2 brand in the oats category with a value market share of 17%. Focus on value added offerings in the oats segment has enabled the company to capture 51% share in the flavored oats market.

Wipro Ltd
Buy Wipro Ltd For Target Rs.700 CMP 565.90
•  Wipro’s consolidated sales grew 16% to Rs 11245.50 crore on YoY basis for the quarter ended June 2014. Its net profit jumped 30% to Rs 2103.2 crore. On the back of strong wins and healthy deal pipeline the company expects growth rates to improve from 2Q onwards.
• Wipro signed many large deals recently. The recent deal wins would help improve sequential growth rates from Sep'14 quarters and thereby lend visibility. Further a pickup in tech spending in the domestic IT market could aid revenue growth in H2FY15.
•  The Company sees a significant rise in business confidence in developed markets as well as India. It is expecting strong demand in the verticals of healthcare and life-sciences, manufacturing and hi-tech. However, weakness in retail continues and the company sees problems in this area persisting for another quarter.