Taking the broader view into perspective, Nifty is well placed above all major moving averages and until 10800 holds any dip is likely to bought into.
Slowdown in global economy is evident with factors such as lower GDP number for China, surge in US trade deficit to a record high, disappointing US jobless data and subdued Asian cues. Besides, decoupling on the domestic front is expected.
We suggest accumulating quality stocks in fewer quantities. Awaited elections, if favourable, then one can lock on the stated gain.
Around USD 2.37 billion were poured in by FIIs in the equity market in February, indeed this healthy buying still exists in March as well. It increases sentiment as FII “net seller” has now been the “net buyer” in the equity market.
Also, upswing in Nikkei India Composite PMI output index from 53.6 in January to 53.8 in February reflected a stronger and accelerated increase in private sector activity in the country. Strengthening of rupee at 70/dollar level followed by softening in crude oil prices to provide further comfort.
Furthermore, as inflation rate is already lower than estimated, RBI is expected to lower the interest rate in May thereon. With this, liquidity crisis is expected to polish off sooner than later.
The Pulwama attack, or to be slated as Indo Pak tensions, is mark under controlled. War situation has presently blown off. Intrepid actions taken by the current government on the same embark favourable winning chances in the upcoming elections.
On an upside, if 11,050 is traded on higher side, we can expect the rally to continue till previous top i.e. 11,118 and above this any breakout could result in pre-election rally till 11,324 and 11,550. Taking the broader view into perspective, Nifty is well placed above all major moving averages and until 10,800 holds, any dip is likely to bought into.
Here are the top stock trading ideas which can give good returns in the long term:
Exide Industries: Buy | CMP: Rs 224 | Target: Rs 262 | Return: 17%
Q3 numbers for Exide did not turn out to be very fruitful. Net profit stood at Rs 155 crore, mainly due to higher tax rate. Revenue stood at Rs 2497 crore against Rs 2278 crore, registering growth of 10 percent against previous year. EBITDA margin improved marginally 11bps at 12.5 percent against 12.4 percent in the previous year quarter primarily due to higher other expenses. Though, volumes in Automotive, Motorcycle, UPS and Solar Batteries in Q3 have grown well.
Going forward, the company’s cost control measures and technology up gradation strategies would help to improve the bottom-line. Also, tie up for batteries having lithium-ion cell technology at its plant is expected to become operational by mid-2020 would add to improve company’s performance and lower the raw material cost to some extent.
As, electric vehicles to be the next leg for growth combined with 2W growth expected to remain strong in the years to come due to increase in consumption & rural income. We remain positive for the sector and Exide industries to maintain its market share.
However, continued escalation in lead prices remains a major concern. Adding to that, muted auto sales numbers and competition pressures are also pulling back the margins.
Asian Paints: Buy | CMP: Rs 1384 | Target: Rs 1575 | Return: 14%
Asian Paints delivered Q3 results in line with our expectations; Volume growth has also picked up significantly, though business continued to face pressure from rising raw material prices.
Although crude oil prices were uptick during Q3 results, it had softened currently and is expected to remain range bound which would help improving the margins front.
Going forward, the commissioning of the Mysore plant as well as Vizag plant on board is expected to hit the market. Having said that is not enough, to stand out of the queue, it has entered home décor business as well- AP homes, to bring décor options under one roof and is planning to open up four more stores by the middle of July next year.
Also, company’s products & market strategies are well on streamed. It has been repeatedly throwing various campaigns. One amongst is Royale Health Shield as the Gold Standard for aesthetics and protection for every home with Anti-Bacterial technology, keeping in mind consumer awareness and choices that are safe and hygienic, to establish.
Moreover, campaign launch to establish Ultima Protek as the ‘Gold Standard’ in protection for the exteriors of every home is expected to gain consumers traction. We expect all this efforts could make Asian Paints a unique moat among other competitors and outperform ahead.
The author is Senior Research Analyst at Rudra Shares & Stock BrokersDisclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.