The Stocks To Buy For Samvat 2074
Dilip Bhat, Sudeep Bandhopadhyay and Hemang Jani tell you their favourite stocks for Samvat 2074
Following a strong run since the start of 2017, India’s benchmark indices are trading near all-time highs, with the S&P BSE Sensex gaining 25 percent year-to-date. Investors have also shown strong appetite for primary market offerings as the number of these issues has doubled since 2016.
In this backdrop comes the new Samvat, the first day of the Hindu calendar year, when it is considered auspicious to buy stocks.
BloombergQuint spoke to three market experts – Hemang Jani, Dilip Bhat, and Sudeep Bandhopadhya – on the stocks they are betting on for Samvat 2074.
Dilip Bhat
To pick and try to make money in this over-valued market is going to be challenging.
Bhat’s top pick is engineering conglomerate Larsen & Toubro Ltd. where he expects a 20 percent profit growth over the next three to four years.
L&T is “well positioned” to capture opportunities rising from the government’s thrust on infrastructure in an attempt to revive private investments, Bhat said. It’s one of the few companies which have the balance sheet strength to take on big projects and that will provide the potential upside, he added.
Bhat's second pick is financial services firm Capital First Ltd., a stock he said is “in a sweet spot” right now and poised for a 35-40 percent earnings growth.
Sudeep Bandhopadhyay
If you pick good companies, in good sectors where there is growth, only sky is the limit.
Bandhopadhay’s top pick is biotechnology firm Advanced Enzymes Ltd. where he sees “a long runway of growth”. The company is one of the largest enzyme manufacturers in the world and has a strong product pipeline with estimated sales of $2 billion, Bandhopadhyay said.
He expects the stock to give a 30 percent return in a year’s time.
SP Apparels is his second pick on account of a “good balance sheet” and “reasonable valuations”. The company operates “in a very niche segment” and could gain up to 20 percent by next Samvat, Bandhopadhyay said.
Hemang Jani
Companies with better business models and growth visibility are the ones which I’d go with.
Private sector lender IndusInd Bank Ltd. is Hemang Jani’s favourite pick for the new year. It’s been one of the best performing lenders over the last two years and the stock has outperformed the Nifty Bank index, Jani said.
The merger with microfinance company Bharat Financial Inclusion Ltd. will also have “distinct advantages” as it will lower the cost of funds and improve the bank’s capital adequacy ratio, he added. The stock could deliver a 22 percent return over the next one year but failure to sustain the growth momentum will pose a challenge, Jani said.
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Jani’s second favourite is drugmaker Aurobindo Pharma Ltd. which has outperformed its peers. He expects an 18 percent upside to the stock from current levels. According to him, most of the derating of pharmaceutical stocks is over but regulatory hurdles still remain a key risk.
Watch the full show here.
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