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The GRS Solution | Here are top 20 wealth creating stocks

Here are top 20 wealth creating stocks | The GRS Solution:-

Traders might have to brace for tough days ahead of expiry on Thursday but any dips are a welcome opportunity for investors to go shopping for their favourite stocks
The index which looked like is on its way to reclaims Mount 10K on Monday saw a cut of over 100 points which took the index below its crucial support levels of 9880, and 9800. The index also closed below its crucial 50-days exponential moving average (DEMA).
Traders might have to brace for tough days ahead of expiry on Thursday but any dips are a welcome opportunity for investors to go shopping for their favourite stocks. The GRS Solution
The foreign institutional investors (FIIs) continued to dump Indian equities for the 12th consecutive session in a row. They have pulled out over Rs14,000 crore from Indian equity markets so far in the month of August, according to provisional data.
Bears are likely to maintain their hold on D-Street because one think which equity markets participants do not like is uncertainty.
History suggests that whenever there has been an environment of uncertainty risk off trade picks off which fuels rally in safe havens such as gold and US Treasuries.
“I think the negative news related to geopolitical tension and corporate earnings (Q1FY18) has already taken by the market. But, yes if tension escalates then it may affect the market sentiment further,” Sanjeev Jain, AVP - Equity Research at Ashika Stock Broking Ltd told Moneycontrol.
“However, for long term perspective, we are confident in the Indian equity market. The Indian government has taken a number of initiatives like Implementation of GST, RERA and empowered RBI to take necessary steps to initiate the NPA resolution process etc. may improve the Indian economy for sustained growth over the long term,” he added.
Jain further added that investors should keep the focus on the companies which are fundamentally sound and strong management. Federal Bank, Ashok Leyland, Kaveri Seeds, Mahindra & Mahindra, SBI, NBCC, ITC and Reliance Industries look good for long term perspective.
We have collated a list of 20 stocks from various experts which investors could buy on dips:
Analyst: Hitesh Agrawal, EVP & Head – Retail Research, Religare Securities
Eicher Motors
Eicher Motors dominates in the premium motorcycles segment with 95 percent market share in India. The company's capacity expansion plan, focus on increasing the dealership network and new launches which augur well for its future earnings.
Company's healthy earnings growth, debt free balance sheet, and robust return ratios make it a perfect candidate for medium-term investment horizon. We have a BUY rating on the stock with a price target of Rs40,467.
APL Apollo Tubes
APL Apollo Tubes is the market leader in the Indian ERW (Electric Resistance Welded) pipe industry with a market share of ~15 percent. With the upcoming capacity expansion, entry into new markets (East India), branding, innovation, and technology capability (DFT and in-line galvanizing), it is well placed to benefit from strong demand outlook for its various products.
The stock is available at less than 11x its FY20E earnings, which is fairly attractive considering robust demand outlook, improving the balance sheet and rising profitability. We have a BUY rating on the stock with a price target of Rs2,352.
Mold-Tek Packaging
Mold-Tek Packaging manufactures and supplies pails for paint and lube industries and packaging containers for food and FMCG industries.
The company has been focusing on the new growth sector i.e. Food and FMCG segment. We believe growth will come from these segments, while Paint and Lube will continue to remain steady.
Considering strong balance sheet, robust return ratios, low debt and proactive management, we have a BUY rating on the stock with a price target of Rs340.
Analyst: Pankaj Pandey, Head-Research, ICICI Direct
SBI
The merger with associate banks has resulted in a large non-performing assets (NPA) stress and subsequently muted profits. However, factoring long term synergies and cost benefits, the structural value remains intact, despite near term lower return ratios.
Subsidiaries value unlocking (Life IPO) and sale of non-core investments can provide a fillip. We have a target price of Rs340 per share, valuing the merged bank at 1.6x FY19E ABV and subsidiaries at Rs64 a share.
L&T
A pick-up in the domestic execution trends along with continued focus on reasonable margin orders, disciplined working capital, and monetisation of non-core assets will all work in conjecture to improve return on equity (RoEs).
We expect RoEs to improve 300 bps in FY17-19E to 14.4 percent. This is expected to be achieved on the back of 16.2 percent PAT CAGR over the same period.
L&T is the best way to play the recovery of the Indian capex cycle. Hence, we have a BUY rating on the stock with a target of Rs1430.
Sagar Cement
Sagar Cement has a capacity of 4.3 MT in southern India. The entire southern region is expected to grow at 8.0 percent in the coming years.
Considering this and coupled with capacity expansion (from 4.3 MT to 5.8 MT), we expect revenues to grow at a CAGR of 16.9 percent over FY17-19E.
In addition, cost rationalisation through the installation of WHR, synergies at BMM and acquisition of grinding unit should help in margin expansion ( an increase of 360 bps to 17.2 percent over FY17-19E), going forward.
Our target price for the stock is placed at Rs1025/share (i.e. valuing at FY19E EV/EBITDA of 13.1 and EV/tonne of US$72/t).
Graphite India
The fortunes of the graphite electrode sector have been on an uptrend. Over the last few months, the spot graphite electrode prices registered a notable increase.
The key triggers have been 1) consolidation of graphite electrode market globally, 2) ~20 percent of the global graphite electrode capacity (ex. China) shutting down in the last three years, 3) increase in steel production through EAF route (outside China) coupled with an increase in global steel prices, 4) Closure of steel capacity in China leading to a decline in exports of both steel and graphite electrodes from the region.
Hence going forward, we expect Graphite India to capitalize over the favorable demand-supply scenario and report robust earnings growth led by volume increase and improved pricing. We value the company at 10x FY19E EV/EBITDA thereby arriving at a target price of Rs28
Phillips Carbon Black
It is the largest manufacturer of carbon black domestically which is used in the manufacturing of tyres. The company has successfully turned around its operations with operational efficiencies and economies of scale resulting in 480 bps improvement in EBITDA margins in FY17.
Healthy cash flow generation is being used to retire debt with consequent Debt to Equity ratio at 0.7x (FY17). We expect the trend to continue over FY17-19E which amidst remunerative brownfield expansion and absence of DTA provisioning to result in exponential growth in PAT over FY18E-19E.
We value the company at Rs825, i.e. 15.0x P/E on FY19E EPS of Rs55.0/share and assign a BUY rating on the stock.
Analyst: Siddharth Sedani, Vice President - Equity Advisory at AnandRathi
Bharat Forge
We remain optimistic on Bharat Forge on the back of company’s revival in demand from the US; however, while demand in domestic is unlikely to be robust in near term, improving sentiments globally and revival in commodity should result in healthy order inflow for the company.
Finolex Cables
We believe that Finolex Cables is in a better position to leverage its operational efficiency as well as healthy balance sheet. We, therefore continue to maintain our “BUY” rating with target price of Rs. 640.
Apollo Tyres
Coming quarters are expected to see a combination of lower rubber prices and re-stocking in Apollo Tyres’ India business, leading to revenue acceleration and a higher margin. We have a buy rating on the stock with a target of Rs366.
UPL
UPL is well poised to post stronger growth in Q2 on the back of a pickup in demand post-GST and healthy performance of Glufosinate in Americas along with higher acreages of key crops like cotton.
We have a buy rating on the stock with a target price of Rs 1095.
Dalmia Bharat
The stock outperformed its peers with its industry-leading profitability. Dalmia is expected to clock a strong performance in FY19, driven by strong growth and prices in the South and East, its key markets.
Its corporate restructuring programme, continuous focus on cost efficiency and balance-sheet de-leveraging are other key positives. We have a buy rating on the stock with a target price of Rs 3202.
Analyst: D K Aggarwal, Chairman, and MD, SMC Investments and Advisors Ltd
Bharat Electronics
Government’s greater emphasis on ‘Make in India’ initiative in Defence sector provides a great opportunity for the Company to enhance its indigenisation efforts and to address the opportunities in Indian Defence sector.
Healthy order book and orders in the pipeline, capacity enhancements and creation of new test facilities help the company in achieving the targeted growth and also would continue to drive the growth in the coming 4 to 5 years.
Engineers India
The company has a healthy balance sheet and strong cash balance. The company is best placed to benefit from a revival in Oil & Gas capex, given its dominant position in the segment.
The company’s order inflows have improved in the last one-two years. The company has a healthy mix of domestic and overseas orders.
Hindustan Zinc
The company is focusing on value-added products such as die cast alloys in zinc and value-added products in silver. Management expressed confidence that in the next 3-5 years, all zinc slabs will be rolled into valued-added products.
Moreover, it would maintain operational growth over the next few years as it executes the next phase of growth, which will enhance global market share in zinc, lead, and silver.
Reliance Capital
The company has made significant progress during the year FY17 towards improving operational performance across its all core businesses and is fully geared to capitalize on its growth aspirations.
With current businesses largely in steady state, increasing market share, the strong balance sheet would bring healthy growth prospects for the company. Also, the implementation of GST will boost the earnings of the company going forward.
Analyst: Dinesh Rohira, Founder & CEO, 5nance.com
M&M
Having a diversified product in its portfolio coupled with its geographic presents, the company has intensified its market share during the few quarters period.
With supremacy over tractor industry and aggressive approach in product-line, M&M has positioned itself as a behemoth in the Indian Automotive Industry during past quarters reflected in its quarterly performance.
ADF Food
ADF Food with its unique product mix coupled with increasing preference of customer towards its new proposition, the company has reported an uptick in performance on a quarterly basis.
Having its USP with respect to product offering along with penetration focused across rural-urban, it is expected to continue its growth streak.
Hindustan Unilever
After struggling to surpass its previous growth performance, the company reported an increase in sales volume despite a challenge opposed by demonization followed by changing tax regime.
As wholesale channel expected to normalize post-GST over a period of implementation, the company will experience a volume growth driven by organized segment from with a wide range of product portfolio to offer.

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  1. Rudra Investment Market Research – SEBI Registered Investment advisory Company In India. Our experts provides trading recommendations in Stock, Commodity and Currency Market.

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