Three Veteran Analysts’ Top Stock Picks To Ride The Rally
BloombergQuint spoke with three market veterans for investment ideas to ride the market rally in Samvat 2077.
The Covid-19 pandemic disrupted the world economy in Samvat 2076, causing volatility in equity markets.
The pandemic triggered a global selloff, with the Nifty 50 Index tumbling 40% from the record high till its March low. The Indian equity benchmark has since seen a one-way rebound, wiping out losses to hit a new record.
BloombergQuint spoke with three market veterans on investment ideas to ride the rally. Sudip Bandhopadhyay, group chairman of Inditrade JRG Group; Vinay Khattar, head of research at Edelweiss Investment Research; and Deepak Shenoy, chief executive officer at Capitalmind, suggest their picks for Samvat 2077.
Here are the stocks they are betting on and why:
Sudip Bandhopadhyay
State Bank of India
- Strong retail credit growth momentum.
- Overall economic recovery leading to possible improvement in asset quality and potential recoveries through the NCLT process.
- Strong liability profile with adequate capital and opportunities for raising fresh capital through public market and/or disinvestment in subsidiaries.
- Strong performance of subsidiaries.
DLF
- Pick-up in both residential and commercial demand.
- Significant unused land parcels in Gurgaon and New Delhi.
- Reduction of fixed cost and opportunities of further improvement in debt position through land monetisation.
ITC
- Strong free cashflow from cigarettes business to continue in the foreseeable future.
- Improving FMCG performance including wider margins.
- Significant undervaluation compared to peers.
Vinay Khattar
Zydus Wellness
- New leadership talent, launch of international business and extension of different product categories.
- Launch of smaller product stock keeping units and distribution muscle from parent Cadila Healthcare.
- Heinz Acquisition in 2019.
- Expect sales growth of 10% and PAT growth 47% CAGR.
SBI Card
- Competitive advantage of its parent’s distribution network.
- Gaining volume market share, improving average spend per card.
- Current return on asset and return on equity sustainable.
- Ample capital adequacy, liquidity and comfortable provisioning.
- Expect PAT to register 25% CAGR over FY20-23E.
Rosari Biotech
- Considerable focus on research and development.
- Home personal and performance chemicals turnover up 5 times.
- Seeding other areas for future growth – like personal care segment.
- Balance sheet is debt free with high return on capital employed.
- Revenue, EBITDA and PAT to compound by 22%, 24% and 26% over FY20-23E.
- Capacity slated to more than double by Q4FY21 supporting growth.
Deepak Shenoy
Naukri (Info Edge)
- Gives us both the online recruitment business, and about 20% of Zomato, a similar percentage of PolicyBazaar and a bunch of other startups.
- Now a quasi-venture capital fund with ownership across the startup ecosystem.
Nasdaq 100 (ETF or Fund)
- Allows participation in innovation in the U.S. technology companies.
- Will get companies like Apple, Microsoft, Zoom, Tesla, Google , Adobe, AMD and Intel.