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Long Term Game

Hyderabad-based VST Industries is popular with mutual funds, which held 8.58% stake end June 2015. The business comprises cigarettes and unmanufactured tobacco. Presence is largely in the value or affordable segment, with brands such as Moments, Special and Charms. Discriminatory and exponential excise hike on 64-mm cigarette in FY 2015 adversely affected the sales volume, which declined 6.9% to 7,540 million pieces. The UK-based British American Tobacco owns 32.16% stake, with a representative on board. There is no debt on the balance sheet, with current investment of Rs 171.2 crore and cash of Rs 42 crore.

NRB Bearings is another stock popular with the institutional investors. Mutual funds held 15.42% stake end June 2015. Incorporated in 1965, the leading manufacturer of ball and roller bearings commands a market share of around 13% in the domestic organized sector. The three subsidiaries are SNL Bearings, NRB Bearings (Thailand) and NRB Bearings Europe GmbH. In a positive development, NRB Bearings (Thailand) reported operating profit in FY 2015. The leveraged balance sheet, with a debt-to-equity ratio of 1.36 times, is a negative. Bonus shares in the ratio of 1:1 were issued in CY 2010.



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