COMPANIES

WITH MOATS

The watch list

Being near-monopolies, these companies have high chances
of delivering consistent returns

T
he concept of moats was popularised by Warren
Buffett. In business, a moat means a competitive
advantage or a barrier to entry. Companies that
enjoy moats have a near-monopoly. They ensure
consistency of returns. Hence, moat investing is a
sophisticated form of fundamental investing.
In the 2016 anniversary issue of Wealth Insight, we
had presented the latest list of moat companies in
India. The following watch list gives moat companies
with their updated numbers. Many of these companies
have high valuations, which may not make them an
ideal buy currently. WI

Companies with moats

Company name Sector ROE (%) Price to book Price to earnings 5Y median P/E Price (`) 52-week high-low (`)

AIA Engineering Capital Goods 18.1 4.66 33.9 22.5 1,462 1702-1276

Amara Raja Batteries Automobile 20.3 4.75 29.6 30.3 798 955-665

Asian Paints Chemicals 27.8 12.94 53.2 51.3 1,120 1261-954

Bajaj Auto Automobile 24.0 4.56 22.3 20.4 3,012 3473-2695

Bajaj Corp FMCG 44.8 10.90 33.8 27.6 490 525-343

Bajaj Finance Finance 21.7 6.00 39.9 27.5 1,643 1989-1020

Bayer CropScience Chemicals 14.9 7.35 47.6 35.8 3,835 5050-3685

Bharat Electronics Capital Goods 17.6 4.66 23.0 21.9 153 193-135

Blue Dart Express Logistics 34.5 17.86 79.1 75.5 4,417 5422-3831

Bosch Automobile 19.0 6.25 43.1 48.2 19,447 25245-18602

Britannia Industries FMCG 37.0 18.03 59.5 41.4 4,715 4964-3052

Castrol India Automobile 115.2 18.50 27.3 32.4 191 227-172

Colgate-Palmolive FMCG 50.5 16.50 46.2 44.2 1,066 1176-886

Container Corporation Logistics 9.7 3.34 28.9 27.8 1,292 1500-922

CRISIL Ratings 36.2 13.60 46.8 44.8 1,988 2070-1752

Cummins India Automobile 17.5 5.89 33.3 31.7 848 1096-767

Dabur India FMCG 29.0 10.66 46.3 39.5 340 368-264

Divis Laboratories Healthcare 22.0 4.75 31.2 26.4 1,020 1142-533

Emami FMCG 20.2 12.69 73.1 50.3 1,064 1428-990

Essel Propack Plastic Products 19.6 3.84 26.2 15.2 285 317-226

46 Wealth Insight March 2018

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 COMPANIES
WITH MOATS

Company name Sector ROE (%) Price to book Price to earnings 5Y median P/E Price (`) 52-week high-low (`)

Exide Industries Automobile 17.1 3.32 27.7 24.0 210 250-193

GSK Consumer Healthcare FMCG 22.2 8.37 41.1 37.7 6,495 6799-4856

HCL Technologies IT 28.5 3.66 14.2 16.0 914 1042-797

HDFC Bank Bank 18.4 4.82 29.2 24.1 1,880 2014-1360

Hero MotoCorp Automobile 33.7 5.71 20.1 20.4 3,464 4200-3074

Hindustan Unilever FMCG 67.8 37.23 57.1 42.5 1,336 1415-841

HDFC Finance 15.6 4.26 19.2 20.1 1,814 1982-1361

Indraprastha Gas Inds. Gases & Fuels 19.5 6.18 32.7 15.6 295 344-194

Infosys IT 22.0 3.19 15.5 18.1 1,130 1220-862

ITC FMCG 24.3 6.76 29.4 30.6 264 353-250

Marico Agri 37.5 13.33 49.2 42.3 306 348-266

Maruti Suzuki Automobile 21.7 6.60 35.0 28.4 8,742 10000-5804

MRF Automobile 18.7 3.24 29.0 12.3 70,649 74499-49600

Navneet Education Media & Entertainment 28.4 4.02 20.7 17.1 137 194-135

NBCC Realty 21.9 9.38 46.7 45.8 197 292-161

Nestle India FMCG 31.8 21.21 59.2 61.1 7,523 8001-6085

Oracle Fin Services Software IT 31.1 7.80 27.8 24.7 4,000 4376-3300

Pidilite Industries Chemicals 28.2 11.82 52.6 44.7 898 972-666

Power Grid Corporation Power 16.8 2.00 12.4 13.9 194 226-188

P&G Hygiene & Health Care FMCG 39.9 45.16 70.9 51.6 9,267 9900-6668

Schaeffler India Automobile 14.2 5.25 37.4 34.6 5,354 5960-3993

Siemens Capital Goods 15.7 5.64 38.3 48.7 1,251 1470-1123

SKF India Automobile 14.0 5.37 33.6 32.5 1,846 2010-1428

Sun Pharmaceutical Healthcare 22.5 3.61 64.8 38.7 561 728-433

Sundaram Finance Finance 15.0 4.40 31.7 32.4 1,628 2085-1357

TCS IT 33.6 6.90 21.9 22.2 2,924 3255-2255

Titan Company Diamond & Jewellery 18.1 14.60 65.8 42.8 802 938-421

Zee Entertainment Media & Entertainment 38.8 7.16 20.3 32.8 567 619-477

Data as on February 19, 2018

March 2018 Wealth Insight 47

Subscription copy of [pankaj_ca@yahoo.com]. Redistribution prohibited.