A correction in the Indian equity markets over the past two trading sessions, the Sensex is down 4.3 per cent and the Nifty down by 4 per cent, has made shares of some of the good companies more attractive mostly Mid-Caps. These are companies which will probably either remain unaffected by the current cash crunch in the market or will see minimal impact.
Large Caps:
SUN PHARMA
Sun Pharma share price had almost halved from its peak in April 2015. The current price factors in most of the negatives. Sun Pharmaceutical has said it is anticipating 8-10 per cent revenue growth this financial year. Also, there could be triggers such as US clearance for its Halol facility and development in the US business from limited competition specialty products. These and an escalating US dollar make it a good bet. Sun Pharma is also the top 500 recommendation by Dynamic Levels for the quarter.
SBI
India’s largest lender State Bank of India is most probably the biggest beneficiary from the deposit rush driven by demonetization as it’ll significantly reduce the cost of funds. With 18 per cent share of bank deposits, which is expected to increase now, after the demonetization tremors calm down, it may lead to increase in SBI’s investment book, which mainly consists of government bonds at a time when yields are falling, resulting in treasury gains. Today, SBI share price opened with the rise of almost 2 per cent against 1 per cent of Nifty50 Index and is the top 500 stock identified by Dynamic Levels for the quarter.
Mid Caps:
GILLETTE
Gillette is yet another top 500 recommendation by Dynamic Levels for the quarter. The company is unlikely to see much influence from the current cash situation. Gillette share price is down 25 per cent from its all-time high and with the recent correction, at a 5-year-low price-to-earnings (P/E) multiple. On a yearly basis, Gillette has seen margins improving and strong earnings growth. The stock has given 100% returns once in every three years since 2009.
HONDA SIEL
The company, which sells pumps and farm equipment, is witnessing a rapid rise in exports of around 23 per cent quarter on quarter and 44 per cent year on year in the September quarter. Exports account for almost half the revenue and will keep on to growing given its Japanese parent is increasing its manufacturing base in India. Today, Honda Siel share price opened with the rise of almost 3 per cent. It is also the multibagger recommendation by Dynamic Levels.
J KUMAR INFRAPROJECTS
With more money with the government, the infrastructure space is likely to get a boost. J Kumar is one of the very few infra companies with a debt-free balance sheet. This will let it bid for more projects. Although in past two trading sessions J Kumar share price has taken the hit, yet it is expected to bounce back significantly. J Kumar has strong fundamentals and hence is quoted as the top 500 performing stock for the quarter by Dynamic Levels.
Small Cap
TECHNOCRAFT
Technocraft is yet another top 500 recommendation by Dynamic Levels for the quarter. Its businesses of drum closure, scaffolding and textile are export-oriented. Its scaffolding business has acquired approvals to operate in the US and Europe. The US accounts have now more than 35 per cent of this business compared with 10 per cent last year. With President-elect Donald Trump’s plan to invest $1 trillion in infrastructure, Technocrat will be one Indian company to watch out for. Today, Technocraft share price opened with the rise of almost 2 per cent as compared to that of 1 per cent of Nifty.
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