The Nifty has rebounded over 3.5 per cent in the last six trading sessions after hitting nearly eight-month lows earlier this month. Sharp gains in Reliance Industries and buying in banking stocks are the reasons for the latest rally in markets, analysts say.
Market analyst Sandip Sabharwal told NDTV that investors should not expect significant downside risk in equity markets as green shoots in investment cycle are visible. He advises buying capital goods and infra.
Here are his stock picks:
1) Larsen & Toubro: The stock can give strong returns.
2) Road construction companies such as Ashoka Buildcon, MBL Infra and IRB Infra are likely to gain as there is clear path of growth for these companies.
3) PSU banking stocks: They have seen strong correction over the last six months. Some PSU banking stocks, where CEOs and chairmans will be appointed soon, can rally 15-20 per cent in the short-term. "Two of the largest state runs lenders such as Bank of Baroda and Punjab National Bank will see their heads getting appointed over a month's time frame and this could spark a rally," Mr Sabharwal said. However, he added that he will not buy PSU banks on the back of fundamentals and would prefer private banks such as ICICI Bank.
4) Sintex Industries: The company was under pressure due to FCCB conversions, but has showcased a turnaround. The stock trades at 5-6 times to its earnings whereas most midcap stocks trade at 20-25 times of earnings.
5) Praj Industries: There has been significant turnaround in operations and its balance sheet is clean. The company has cash of close to Rs 300 crore on books and has order book of Rs 1,200 crore.
6) Jain Irrigation: Restructuring is likely to take place and the food business will be hived off. The market cap of the entire company is less than the market cap of its food business.
Disclaimer: Investors are advised to make their own assessment before acting on the information
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
