The Outperformers 2019

The Outperformers (11-20)

These companies have been ranked based on their stock's excess return over the Sensex for a five-year period

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Published 2 years ago on Aug 12, 2019 13 minutes Read

In Outlook Business’ third edition of The Outperformers, these are the companies that have managed to beat the market over a five-year period, creating significant value for their shareholders. Honeywell Automation

As an automation and software solutions company, Honeywell Automation (HAIL), over the years has employed its technological expertise in various industries, be it safety and surveillance products for aircrafts, parking management or fire prevention in the upcoming smart city projects. It has successfully managed to look beyond its home turf — the oil and gas industry. In 2017, it also ventured into the B2C sphere by launching an air purifier. 

This adaptability is paying off well. Its revenue CAGR over FY14-19 was 13%, while its profit CAGR was 25.73% during the same period. The strong performance has rewarded its shareholders too. Over these five years, the stock return has been 49%.

With the automation sector witnessing growth from the increasing investments, HAIL is at an advantage since it is a leader in industrial automation and IoT. It also has a strong network, reaching over 20 cities directly and around 35 cities through distributors.

Analysts maintain ‘buy’ on the stock with a target price of Rs.27,450 valuing the stock at 45x its FY21E earnings. As of June 28, 2019, the stock closed at Rs.24,823.

Britannia Industries

Even as Britannia engages in an intense battle for expanding its market share in the biscuits segment, it is also eyeing transformation into a total foods company. To accomplish its mission, the firm has been adding more variants in biscuits, fixing product gaps in cake portfolio and making strong inroads in newer categories like dairy beverages, cream wafers and salty snacks. The company expects to take the contribution from product innovation to 7.5%-8%

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