Leading FII Credit Suisse has the following two picks in India,
Emami (16% potential upside): It is a player in the FMCG sector in India with market leadership in niche categories like cooling oils, balms and fairness creams. Its unique portfolio of products with high market share helps in largely side-stepping intense competition. Emami has one of the highest net cash positions, dividend payout ratios and ROE. With growth momentum coming back, expect the stock to at least trade in line with its larger mid-cap peers. The stock is valued at 24x one-year forward earnings, in line with our target multiple for its mid-cap peers. Target Price is 690 on EPS expectations of 21 and 26 for FY 13 and FY 14 respectively.
Hexaware Technologies (36% potential upside): It is a mid-sized IT services company with a niche positioning in PeopleSoft implementation, a focus in segments such as asset management and airlines and a strong presence in geographies such as Germany. The stock performance has been tepid recently, given the earlier stock price performance and due to a muted September quarter. The stock is trading at 7.7x 2013 consensus estimates and a 5.5% 2012 dividend yield which we think are attractive. Our target price is Rs145, which presents 30% upside to the current market price.
