Experts have advised investors to not get rattled by volatility and continue to stay invested in high-quality names with steady balance sheets and management.
The market's gains between last Dussehra and this have been muted — the Nifty and Sensex are up 6 and 10.4 percent, respectively — compared to the year before when the market clocked returns of about 25-30 percent.
The Nirav Modi scam and the IL&FS issue, along with its accompanying liquidity crisis, have weighed on the market this year.
Experts have advised investors to not get rattled by volatility and continue to stay invested in high-quality names with steady balance sheets and management.
On the occasion of Dussehra, here's a list of 9 stocks picked by a few analysts Moneycontrol spoke to.
Analyst: Siddharth Sedani Vice-President, Equity Advisory, Anand Rathi Shares and Stock Brokers | Investment horizon: 1 year
Asian Paints | Target: Rs 1,471
The company's vast distribution network gives it an edge over its peers. Anand Rathi expects the Indian paints industry to grow at around 8-12 percent over the next few years amid growing demand.
Aditya Birla Fashion and Retail | Target: Rs 237
Its brand portfolio consists of Madura Lifestyle, Pantaloons, fast fashion and its newer businesses. Strengthening its private-label mix by improving its price-value proposition and network expansion — adding 40-50 stores a year for Pantaloons. The management expects its innerwear division to grow 2x in FY19 to Rs 200 crore, driven by its foray into women’s innerwear.
Aarti Industries | Target: Rs 1,600
The firm is one of the largest producers of benzene-based derivatives in India, with a global footprint. Continual capex has enabled Aarti to grow continuously.
The scale-up in its business and the new toluene setup offers assurance of an over 20 percent CAGR in the next three years. The management’s focus is on performing segments and maintaining profitability and hiving off its non-performing segment.
Biocon | Target: Rs 823
The key developments during the quarter were approval of Fulphila (Pegfilgrastim) Biosimilar co-developed by Biocon and Mylan for launch in US markets. We expect the company to grow at a CAGR of around 29 percent over the next two years which should also improve better profit margins going ahead.
Zee Entertainment | Target: Rs 530
Zee is uniquely positioned in the media sector due to its leadership in the various sub-segments – specifically regional content. Favorable ad-market context, market-share rise, regional expansion aiding advertising growth. The company has launched Zee5, expected to break even in the next 3-5 years.
Analyst: Sumit Bilgaiyan, Founder, Equity99
Reliance posted a double digit growth rate for the third consecutive quarter. In Q2FY19, there has been a rise in exports (by 45.5 percent) due to higher petrochemical product volume and prices. The retail business is growing at a rapid pace (115 percent+ Y-o-Y ).
We believe that its petrochemicals business will continue to grow, owing to the current levels of rupee and price of crude oil. Owing to the festive season ahead, we expect Reliance Retail to continue its growth momentum while the third revenue driver digital services business will also keep on expanding as the value-added services will be charged going ahead.
Reliance industries will continue to grow at a double-digit rate even in the coming quarter and is a value buy at current price levels (especially after the recent correction from price levels of Rs 1,250 ) as it still trades at a deep conglomerate discount of Rs 1,151 and PE levels of 21.3.
Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
The firm had posted better-than-expected performance across all fronts during Q1FY2019. Revenue growth was driven by broad base, which led to constant currency revenue growth of 5.1 percent QoQ and 22.9 percent YoY.
The company had registered double-digit sequential growth in BFS and high-tech and media space. This quarter also the industry experts suggest that maximum projects were awarded in BFSI space and we expect L&T Infotech to benefit from this trend and continue its growth momentum. The results are also expected to be boosted on account of the weakened rupee.
Also, the firm’s diversified approach is expected to pay off and the digital mix strategy is expected to work in this Quarter too. We believe the stock is a value buy at current P/E levels of 25.9x. It is also a high dividend paying stock, L&T Infotech has paid 2150 percent dividend for FY18. Owing to these factors we are recommending a buy for medium to long term.
Being one of the biggest manufacturers and exporters of synthetic food colours, it enjoys a considerable market share. The firm had been looking forward to capacity expansion and clearance of its 3rd plant at Dahej provides it a strong stimulus for growth.
Being placed in an industry with high entry barriers it has a considerable pricing power. Apart from these factors depreciating rupee provides a conducive environment for an export-led growth.
Currently, the stock is trading at Rs. 146.8 well below its 52-week high of Rs 236 and at a P/BV of 1.8x and it trades at a considerable discount to its nearest peer Vidhi
Owing to the high operating margin of Dynemic products, current capacity expansion, depreciating rupee and cheaper valuation compared to its peers we recommend a buy on Dynemic products
Analyst: Astha Jain, Senior Research Analyst, Hem Securities
The company has a robust order book and recently clocked orders from central govt to modernise & automate five ports. It has also signed partnership pact with security arm of Israel govt run Israel Aerospace industries to develop technical security solutions.
Company’s approximately 40 percent of revenue comes from Telecommunication vertical & this vertical is bottoming out after witnessing slow down from last three years.
Hence, going forward, this vertical will contribute to the company’s growth. On the financial performance front, company’s topline & bottomline have witnessed CAGR of more than 20 percent since last 5 years which infuse optimism in the company’s fundamentals.
On the valuation front, the company is reasonably valued at P/E multiple of 17-18. Hence, we recommend a long-term buy on the stock with a price target of Rs 840 for a time horizon of a year.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on Moneycontrol are their own, and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
