A good consumer stock

Hitachi Home & Life Solutions Ltd.
Current price – 195
Target – 320
Time frame – 1 year

India is globally known for its huge consumer growth and increasing consumers in higher segments. 10 years before only high end people use to afford AC and mobiles now its becoming very common. Outsourcing jobs has created a all new era of consumerism and people in India have stared going for quality over price and this number is increasing day by day.

Hitachi has its niche in domestic AC segments and is known for its quality and hitachi really stands out amongst its competitors likes LGs and Samsungs. As per the recent announcement made by the company Hitachi is reaching for a 12 percent share of the Indian air-conditioner market by the end of 2011.Hitachi currently holds a seven percent share by volume - and a ten percent share by value - of the domestic AC market that sold about 3.2 million units last year and is valued at Rs 5,500-6,000 crore, growing at over 20 percent annually, said the company. Company execs unveiled Hitachi's new offerings for the 2011 season that strengthen its affordable lineup and also add models to its premium segment.The split and window AC models launched for Kolkata on Wednesday range from Rs 19,990 to Rs 49,990. The company, known for its relatively high end offerings, was stressing on the "mass premium" segment with the new entrants, officials said.By the end of the current year, the company wants to take in 10 percent of the AC market by volume and 12 percent by value, Managing Director Motoo Morimoto said. Hitachi also plans to expand its production capacity since it will exhaust the current volume of 4 lakh units annually within this year. The company already owns two facilities in Gujarat and Jammu and said it will announce expansion plans by March end. 

Valuation wise its currently trading at single digit PE which is very rare for any consumer company with quality management, DE ratio is as low as .4. These all factors make it a good buy at current level of 195, though in the current volatility stock can go bit lower but in the long term its a good story to buy.

Thanks.