Rupee, crude movement to be keenly watched; these 3 stocks to bet on for short term

Sumit Bilgaiyan

Quarterly earnings, trend in global markets, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs) will dictate trend on the bourses next week. The movement of rupee against the dollar and crude oil prices will be monitored keenly.

Brent crude hovers near $80 per barrel mark. Spike in oil prices raises India's import bill as the country imports majority of its crude requirements. A weak rupee raises the cost of importing crude oil.

On the earnings front PSU majors will announce their results. On Monday, NTPC and capital goods giant L&T will come out with March quarter earnings. While, M&M, Coal India, Power Grid and OMC giant BPCL will declare their results on Tuesday.

From Friday, Auto companies will start posting their monthly sales numbers.

Here is the list of stocks to bet on in short term:-

L&T Infotech has posted better-than-expected performance across all fronts during Q4FY2018. Revenue growth was driven by broad base which led to constant currency revenue growth of 4.5 percent QoQ and 18.7 percent YoY while USD revenue increased by 5.3 percent QoQ and 21.6 percent YoY.

Excluding one-time commercial settlement of Rs 61.7 crore, LTI reports EBIT margin to 15.9 percent QoQ, an improvement of 100bps. Net profit during the quarter increased 19.5 percent QoQ to Rs 338 crore.

Strong growth traction in BFSI continued as constant currency revenue grew by 9 percent QoQ due to inorganic revenue which is followed by hi-tech and M&E and manufacturing growth.

Management remains optimistic of remaining in the industry’s top quadrant in terms of revenue growth in FY19 similar to FY18 led by recent deal wins, higher large accounts mining and higher digital revenue mix and growth. We are recommending a Buy at current price.

We are quite bullish on Escorts. Its tractor business is likely to witness another year of healthy double digit growth in FY19 due to strong rural sentiments on back of higher farm incomes and projection of normal monsoon for third consecutive year.

We are projecting double digit growth in volume led by new product launches and increased focus on exports. Construction equipment segment is witnessing robust demand traction with 29 percent YoY growth in FY18 which we believe will continue in future.

We expect slight dip in EBITDA margins due to rising raw material cost which will put weigh on margins though we are closely watching for average realization. We have a Buy call on Escorts.

Indiabulls Housing has reported robust core operating performance. Its AUM grew strongly by 34 percent YoY. Disbursements for the quarter were up 30 percent YoY due to 50 percent+ YoY growth in core home loans which drove 34 percent AUM growth.

Management has cited for strong traction in affordable housing finance. Loan mix and borrowing mix both were steady. Management targets to gradually increase the share of securitization in its loan book from 10 percent currently to 20 percent over the medium-to-long term.

Indiabulls Housing’s transformation from a diversified lender to a focused mortgage player has yielded returns, with healthy RoE and RoA. The ability to manage spreads will be key to watch out. We have a Buy call on Indiabulls Housing Finance.