5 MUST HAVE STOCKS IF NIFTY CORRECTS POST RBI RATE CUT

The major event that took place on 4th October 2016 is the Reserve Bank of India’s (RBI) fourth bi-monthly monetary policy meeting. The RBI after the third bi-monthly monetary policy on 9^th August 2016, decided to keep the policy repo rate unchanged at 6.5 per cent. The RBI in its monetary policy review yesterday cropped its key lending rate or the repo rate by 25 basis points to a six-year low of 6.25 per cent, from 6.5 per cent. Banks are anticipated to pass on the RBI rate cut to customers. Yesterday’s rate decision, the first in the tenure of new RBI chief, Urijit Patel, commenced a new era for the central bank. Today’s policy decision was for the first time initiated by a six-member panel called the monetary policy committee or MPC; the decision was taken by the RBI governor alone.

The BSE Sensex opened 91.19 points, or 0.32 per cent, up at 28425.74 on Wednesday, whileNifty opened 37.20 points, or 0.42 per cent, up at 8806.35.

Here are the five stocks you must have in your portfolio if Nifty corrects post RBI Credit policy.

Escorts Limited

On 5^th Oct, the stock dipped 1 per cent, opened at Rs. 410.80.

Escorts traded at Rs. 393 beating its previous one-year high on 27th Sept trade. On 3^rd Oct, it followed the same by trading at Rs. 409. On 4^th, Escorts share price went as high as Rs.414.20, breaking its last record high. Currently, Escorts share price is trading at Rs. 404.60.

Performance
	YTD	1-Month	3-Month	1-Year	3-Year	5-Year	10-Year
Escorts Ltd	136.71	22.38	82.34	161.55	67.09	41.62	12.17
S&P BSE Small Cap	10.86	3.78	10.41	18.67	33.28	14.1	7.79
S&P BSE Auto	22.98	2.09	15.13	31.26	26.07	21.86	15.5

 

Escorts Limited, one of India’s leading engineering conglomerates operates in the high growth sectors of agri-machinery, construction. While the strong sales number posted by Escorts in the month of September was largely driven by pre-festival exuberance, industry growth also has been fairly good for the last 5-6 months. The company had disclosed a net profit of Rs 35.2 crore for the corresponding period of previous financial year. Turnover increased by 9.3 per cent to Rs 1,051.4 crore in quarter ending June 2016 as compared toRs 961.4 crore in quarter ended June 2015.

Edelweiss Financial Services Limited

Intraday on Wednesday, Edelweiss share price is quoting above 0.55 per cent at Rs. 121.80.

Performance
	YTD	1-Month	3-Month	1-Year	3-Year	5-Year	10-Yea
Edelweiss Financial Services	110.09	9.5	62.22	103.98	59.99	35.29	-
S&P BSE Mid Cap	21	1.9	13.71	24.4	33.08	17.5	10.07
Nifty Financial Services	14.72	-1.32	10.54	15.62	22.82	16.71	14.87

 

Caisse de Dépôt et Placement du Québec (CDPQ), the 2nd largest pension fund in Canada, has inked a long-term partnership with Edelweiss Financial Service Ltd in order to invest around Rs.5,000 crore (nearly $750 million) in stressed assets and specialized corporate credit in India, in the coming four years.

CDPQ has also agreed to attain a 20 per cent equity stake in Edelweiss Asset Reconstruction Co. (EARC). This will permit EARC to access CPDQ’s funding and invest in new stressed asset companies it acquires from banks and also offer necessary capital in assets that will be available on EARC’S book.

The stock traded on its fresh one year high value at Rs. 126.00 on 3rd Oct 2016. The stock volume too spurted by more than 2.27 times.

 

The other shareholders in EARC will be a Scandinavian insurance company with a 4 per  cent stake, 16 per cent will be held by Indian investors and the balance by the Edelweiss Group.

Thirumalai Chemicals Limited

Thirumalai Chemicals share price rolled below 0.76 per cent, intraday on Wednesday. The stock opened at Rs. 650.00 against its previous closing at Rs. 644.30.

Thirumalai Chemicals has grown into a diverse and respected enterprise, expanding into the manufacture of many other critical Industrial Chemicals: Maleic Anhydride, Fumaric Acid and Malic Acid and various Fine Chemicals and Derivatives.

The total income from operations dipped 26 per cent. In the current June quarter it stood at Rs. 167.94 cr against Rs.227.04 cr in the corresponding period last year. 

The Net Profit fell by 13.8 per cent in the June quarter and stood at Rs. 15.48 cr versus Rs.17.96 cr in the same period last year.  Nonetheless, since Dec, 2015 quarter its net profit has shown an upward movement. Therefore, the company is showing positive growth.

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The stock traded at its new 52 week high value at Rs. 667.35 and settled at Rs. 644.30.

Triveni Engineering & Industries Limited

Performance
	YTD	1-Month	3-Month	1-Year	3-Year	5-Year	10-Year
Triveni Engineering	37.79	13.51	-9.47	122.12	68.31	23.08	-1.55
S&P BSE Small Cap	10.86	3.78	10.41	18.67	33.28	14.1	7.79
S&P BSE FMCG	8.49	-3.59	-0.8	9.83	7.99	17.24	15.33

 

Triveni Engineering & Industries Ltd was incorporated in the year 1932, is a Small Cap company (having a market cap of Rs 1528.32 Cr.) operating in Sugar sector. For the quarter ended June 30, it disclosed a huge rise in standalone net profit at Rs 42.80 crore. The company had noted a net loss of Rs 93.48 crore in the same period of previous financial year. On the other hand, total income from operations shot up to Rs 600.86  crore during the quarter under review as compared to Rs 504.68 crore in the year-ago period.

Peer comparison
	Market cap (Rs Cr)	Revenue (Rs cr)	Net profit (Rs. Cr)	Net margin (%)	ROE (%)	Price to book	Price to earnings
Triveni Engineering	1,506.40	2,011.20	103.2	5.08	-1.5	2.18	11.71
Balrampur Chini Mills	2,668.13	2,909.84	282.86	9.57	8.44	1.99	9.43
Bannari Amman Sugars	2,196.42	1,381.92	106.2	7.65	0.11	2.2	20.68

 

Chemfab Alkalis Limited

Chemfab Alkalies Limited was incorporated in the year 1983, is a Small Cap company (having a market cap of Rs 293.45 Cr.) operates in Chemicals sector. For the quarter ended 30th Jun 2016, the company has noted standalone sales of Rs. 30.36 Cr., up 32.46 per cent at Rs. 22.92 Cr from the corresponding quarter last year. Furthermore, the company has reported net profit after tax of Rs. 6.19 Cr. in latest quarter. 

 

Key Ratio 

 

The stock is quoting at Rs. 320.50, on 5th Oct, opened at Rs. 323.60 against its previous closing of Rs. 319.45.

Escorts, Edelweis, Thirumalai Chemicals, Triveni Engineering and Chemfab Alkalies areMultibagger stocks for this quarter as identified by Dynamic Levels research analysts. These are well analysed multibagger stocks, based on analysts’ technical and fundamental research, these stocks have traded in very high volumes. As observed, these companies multiply their earnings per share every year and bears great potential to grow in the long run.