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Jan 15, 2017, 01.18 PM | Source: Moneycontrol.com

Money spinners: 9 stocks IIFL is bullish on for 2017?

The brokerage firm says that even on assuming only 12 percent Nifty earnings growth in FY18 due to spill‐over of demonetisation, valuations are factoring much damage at price to earnings (PE) of 17 times.

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Money spinners: 9 stocks IIFL is bullish on for 2017?

The brokerage firm says that even on assuming only 12 percent Nifty earnings growth in FY18 due to spill‐over of demonetisation, valuations are factoring much damage at price to earnings (PE) of 17 times.

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Nasrin Sultana (more)

Special Correspondent, Moneycontrol.com |

According to IIFL, India’s value proposition across all dimensions-demographics, domestic growth and liquidity, macros, pro‐reform government is the most impressive among emerging markets. It feels that will bring the FPIs back to India. It believes investors will look to FY19 as a more appropriate indicator of value for Indian equities.

The brokerage firm says that even on assuming only 12 percent Nifty earnings growth in FY18 due to spill‐over of demonetisation, valuations are factoring much damage at price to earnings (PE) of 17 times.

So, here are stocks to invest in 2017

Apollo Tubes

Target: Rs 1275

Upside: 34 percent

Reasons: It is strongly placed to benefit significantly from the improved industry outlook, additional capacity in place and opening up of new business avenues.Despite the strong growth prospects, it is currently trading at a valuation of 5.2 times on FY19 EV/EBITDA.

Can Fin Homes

Target: Rs 2100

Upside: 23 percent

Reasons: Over the longer term, we see elevated NIM, strong loan growth driven operational efficiencies and leverage optimisation driving the franchise RoE towards the majestic 25 percent mark.

Carborundum Universal

Target: Rs 328

Upside: 30 percent

Reasons: Higher execution coupled with expansion in margins would lead to 14 percent operating profit CAGR over FY16‐19. With earnings CAGR of 25 percent over FY16‐19, valuations are cheap at 17 times FY19 P/E.

Great Eastern Shipping Company

Target: Rs 530

Upside: 38 percent

Reasons: It has a sound track record of timing its ship sale and purchase. The number of its vessels will soon rise to 44 from 27 (FY14) after aggressive acquisitions in past 2‐3 years. Recent strength in dollar index augurs well for the company.

Gulf Oil Lubricants

Target: Rs 858

Upside: 27 percent

Reasons: With its marketing strategies, the company will continue to deliver 2‐3 times industry growth. With margin improvement, IIFL expects a net profit CAGR of 21 percent during FY16‐19. It believes the sector can command valuations akin to FMCG companies.

IPCA Labs

Target: Rs 720

Upside: 32 percent

Reasons: IPCA may witness 12 percent revenue CAGR along
with margin uptick from operating leverage in the next three years. Domestic business would be driven by cardiovascular, pain therapies and record anti‐malaria sales

Mahindra Holidays and Resorts

Target: Rs 500

Upside: 27 percent

Reasons: Expect annuity fees and resort income to sport a faster 15 percent and 23 percent CAGR respectively. It is the market leader in the vacation ownership (VO) industry with 0.2 million members and a portfolio of 46 resorts. It has a 3,000 room inventory.

Minda Industries

Target: Rs 423

Upside: 30 percent

Reasons: Valuations look attractive considering an expected 26 percent earnings CAGR during FY16‐19, marked improvement in return ratios, significant improvement in balance sheet strength and robust cash generation.

PNC Infratech

Target: Rs 136

Upside: 29 percent

Reasons: PNC will be a strong beneficiary of the pickup in order awarding in the roads segment. The asset light model would also help the company to bid for more orders without stretching its balance sheet significantly.
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