Defensive Stock Picks
These are called safe stock pick because downside is limited to these stocks taking into consideration its growth and past records. But as entire market are still bearish due to slowdown in economy all over the world including India.
So buying few stocks at a time is advisable instead of buying in bulk in single trade.
Profits
1. Despite the high input costs (steel, aluminium, copper and rubber), the company managed to enhance its margins from 11.9% to
13.1% in FY08 by price increases, improving process efficiencies and supply chain rationalization.
2. The company is pinning its hope on rural connect programme launched in December 2007, wherein it is planning to tap 23,000
villages with a population of around 5,000 each, tie-up with regional non-banking financial institutions and launch 11 new models
over the next one year to do the trick.
Manufacturing
Tax breaks on the Haridwar facility, which started production in April 2008 and the price hikes (about 3 per cent) in the last four months should enable the company to overcome the problem of higher raw material costs going forward. Higher volumes from the Haridwar facility with an installed capacity of 500,000 (to be increased to a million units by the end of this year and 1.5 million thereon) will help bring down costs due to economies of scale. Post these expansions, the company will have a total annual capacity of 4.5 million units from its three manufacturing units.
Hero Honda
Returns
Buy near Rs 600.
Returns - 40 to 50 %
Duration - 2 to 3 years.
40% Target acheived in month of Feb 2009
Next Target
It has support levels at Rs 850, Rs 750 and Rs 650.
Watch these levels and try to buy at lower rate for good long term returns.
Taking into consideration Rs.600 as buying price following are the returns
164% Target acheived in month of 19 May 2009. It went high till Rs.1587 (Updated - May 2009)
(Updated - Mar 2009)
Defensive Stock Picks
Stock Market Indian
Your Way To Earn
Welcome to the Indian Stock Market
About company
The company manufactures two wheeler’s such as,
CD Deluxe (97.2 CC)
Glamour (124 CC)
Splendor + (97.2 CC)
Passion plus (97.2 CC)
Hunk (150 CC)
CBZ X-treme (156 CC)
Karizma (225 CC)
Recently the company has launched Splendor NXG bike and Pleasure Scooter.
Increase in Sales
1. Hero Honda has led from the front with its sales volume jumping 19 per cent to
14.81 lakh units for the first five months of the current fiscal year.
2. While the high interest rates have dented the fortunes of other two wheeler
players who get 50 per cent of their revenues from sales driven by credit (loans),
Hero Honda’s lower dependence (just 15 per cent of total sales) and rising
demand from rural markets, which contributes half of its sales, have helped it to
give a stellar performance so far.
3. Due rise in interest rate the sharp dip in the share of the entry segment saw the
executive bike share move up to 57 per cent from 52 per cent in FY07.
4. The premium segment, which is the least affected by higher interest rates, saw a
growth in volumes and market share. This segment has a 13 per cent share of
the motorcycle volumes, up from 11.1 per cent in FY07.
5. In the premium segment, dominated by Bajaj Auto, it increased its share from 15
per cent to nearly 24 per cent, thanks to the launch of Hunk and higher sales of
CBZ X-treme and Karizma.
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