Rupee is playing havoc in the market tanking equities to low points. In a jittery mood, most investors are seen selling stocks to get away from the falling market. The last week seem to be a little different. The RBI's move to siphon away dollar demand from oil companies worked wonders for the second day in a row as rupee ended Friday's session with an 85 paise gain. Dalal street also rallied with Sensex hitting a double-century and Nifty ending up 62 points. However, this is just a technical pullback beginning September series and the economy is in doldrums. In what could be seen as more proof that India’s economy is firmly in the throes of a severe slowdown, in the first quarter of FY14, GDP growth has come in at a lower-than-expected 4.4 percent. This is the slowest pace of quarterly growth clocked in 4 years and the third quarter in a row that growth has remained below 5 percent. In this time of crisis, SMC Investments feels that the economy would do better in the coming three to four quarters. The brokerage has cherry picked few stocks that have fallen more than the correction required in the short term and are expected to gain handsomely provided the investments horizon is between one to three years. Here are 10 stocks for you to buy now.
Tata Motors Target: Rs 390 Potential Upside: 34% Rationale: Higher volumes in Jaguar Land Rover, a richer product mix and favourable exchange rate resulted in very stronguperformance, both in terms of operating and financial margins. Going forward strong growth outlook in Jaguar Land Rover and new launches in the domestic market would help the company to maintain sustainable growth both in terms of revenue and profitability.
Lupin Target: Rs 893 Potential Upside: 16% Rationale: As the company has the richest pipeline of products and filings as compared with the other Pharma companies, the stock looks appealing. Meanwhile the consistent product launches and increasing its access to other countries like Japan, which is the world's second largest Pharmaceutical market, is likely to depict the growth story of the company. However, the New Drug Price Control Order in India may stand as a hurdle to the company.
Zee Entertainment Target: Rs 262 Potential Upside: 18% Rationale: The management is hopeful of the investments that the company is making to grow its business and market share. Content-focused approach combined with better monetisation of subscription revenues, especially from digital markets, will contribute to the company
Punjab National Bank Target: Rs 650 Potential Upside: 50% Rationale: The bank expects to maintain margin at around 3.5 percent going ahead and is hopeful of ending the year with 10-12 percent growth.
Motherson Sumi Target: Rs 310 Potential Upside: 64% Rationale: The company has been receiving new orders across segments /geographies and steadily improving profitability at global subsidiaries, despite an uncertain macro environment. The company plans to invest Rs.800 crore in four-five new manufacturing plants. Of the total, Rs. 650 crore is earmarked for overseas markets such as Germany, China and the US, where it has got several new orders from the automakers like Volkswagen.
Tata Global Target: Rs 182 Potential Upside: 33% Rationale: The company continued to make steady progress in the tea, coffee and water categories, through innovation, category expansion and strategic alliances. Further the company has plans to make new launches which would drive the future revenue growth of the company.
United Phosphorous Target: Rs 175 Potential Upside: 22% Rationale: The company has registered steady growth both in terms of revenue and profitability in the last few years. It is expected to continue its growth momentum going forward on the back of revival in the global agriculture sector and favorable climatic conditions for agriculture in India.
Oriental Bank of Commerce Target: Rs 205 Potential Upside: 62% Rationale: The bank has been showing an improvement in its core operating parameters including asset quality and improvement in NIM over the past few quarters. This is one of the fastest expanding midsize public sector undertaking (PSU) bank. Bank has conducted fresh restructuring of advances worth Rs 419 crore in the quarter ended June 2013 nearly half of restructuring in previous quarter ended March 2013.
Bajaj Corp Target: Rs 295 Potential Upside: 21% Rationale: The company will seek inorganic growth opportunities in the FMCG and hair oil market as part of growth strategy. The inorganic growth opportunities will focus on targeting niche brands, which can benefit the company's strong distribution network. The company is the 3rd largest player in the overall hair oils segment. The company's product portfolio includes Bajaj Kailash Parbat Thanda Tel, Bajaj Almond Drops Hair Oil, Bajaj Brahmi Amla Hair Oil, Bajaj Amla Shikakai Hair Oil and Bajaj Jasmine Hair Oil. Additionally, it has then 4 new products ready since last 2 - 3 years, which are now in the various testing phase.
Alembic Pharma Target: Rs 159 Potential Upside: 22% Rationale: The company has reported robust growth both in International Generic Business and branded Formulation Business in the last few years. Going forward, the Launch of 20-25 new products in the Branded Formulation Business and Expanded annual production capacity in International Generics business would help the company to boost sales momentum and brand build up.