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Last Updated : Apr 14, 2018 01:03 PM IST | Source: Moneycontrol.com

Be cautious as volatility to increase on earnings; 3 fundamental picks can give up to 18% return

Here is the list of three fundamental picks which can give up to 18% return in short term.

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Sumit Bilgaiyan

Next week will be quite important for Indian stock market due to results heavy week. On Monday, the market will react on Infosys’s quarterly earnings.

Apart from that many prominent midcap companies will be out with numbers like Cyient, DCB Bank, ICICI Securities, Jay Bharat Maruti, 5PAISA Capital, CRISIL, Muthoot Capital, Tata Sponge.

Thursday, 19th will be the most crucial day for the market as two major Nifty companies, IndusInd Bank and TCS, will declare their quarterly numbers.

Apart from numbers, PM Narendra Modi will be visiting Sweden and UK from April 16 to 20. This visit will be closely watched as world markets are grappled with geopolitical tensions.

In the coming week, China will declare it’s GDP data that is expected to be around 6.7 percent YoY in Q1 while March IIP growth may slow. Bank of Indonesia will likely keep its policy rate unchanged at 4.25 percent at the April meeting.

Coming week is results-heavy and market has already rallied a lot. It is advisable to be cautious at this level. We might see increase in the volatility in India and as well as global markets.

We are closely watching at the levels of 10,360 on downside and 10,600 on upper side.

Here is the list of 3 fundamental picks which can give up to 18% return in short term:

Bombay Dyeing | Rating – Buy | Target – Rs 295 | Return – 18%

Bombay Dyeing is a Wadia group company with broadly three business segments - polyester, textile and real estate. Interest in the company is primarily on account of the real estate business, however just to touch upon the other segments, they are the India's 4th largest producers of polyester staple fiber, textile business consists of their "home and you" brand in retail distribution and a manufacturing.

The textile business has a wide range of products such as stylish linen, towels, home furnishing, leisure clothing, kids wear and many more range of products which are available across it 350+ exclusive BDML Retail and 2000+ multi brand outlets.

The revenue of the company has grown at a CAGR of 14 percent over past 5 years due to significant marketing efforts and improved product mix. The company has shifted it's strategy to branded retail segment which will be much profitable business considering the demand for retail branded products.

We have buy rating on Bombay Dyeing with target price of Rs 295 in short term. Long term is also looking positive.

Future Market Networks | Rating – Buy | Target – Rs 147 | Return – 9%

Future Market Networks Limited (FMNL), formerly Agre Developers Ltd, was incorporated in 2008. The company provides retail infrastructure and infra logistics. It has created a capital-light, partnered real estate development model, focussed on retail real estate, infra-logistic parks and the development of wholesale markets.

It is building capacity and enabling the infrastructure for future markets in a more efficient and cost effective manner. The Narendra Modi led government has put a lot of thrust on infrastructure development since it is critical to economic growth.

Logistics and wholesale trade infrastructure form the backbone that India needs to move its consumption-led retail growth story forward. However, since most of our infrastructure, especially wholesale trade markets, was designed and built decades before liberalization began, there is an urgent need to boost the wholesale trade and retail infrastructure network capacity to meet the demands of growth over the next decade.

We believe FMNL has potential to garner maximum benefits this due to it’s unique business model of creating a network of new markets by integrating and better organizing the modern wholesale trade, retail and logistics infrastructure in India.

FMNL has very smartly implement a logistics infrastructure strategy that maximizes efficiency and develops a wholesale network that enhances wholesale trade experience. It bridges the gaps in infrastructure or logistics to ensure supply remains in tandem with consumer demand.

Due to this unique business model and strong visibility of growth we are recommending a Buy with target price of Rs 147 in short term and long term is also looking bullish.

Bhagyanagar India | Rating – Buy | Target – Rs 55 | Return – 12%

Established in 1985, Bhagyanagar India Limited (BIL), the flagship company of Surana group, is engaged in Copper and Wind Power business. Recently it has announced demerger of it’s solar and real estate business into two separate companies which will create a lot of value for it’s shareholders.

Post this scheme of arrangement Bhagyanagar India will be focused on copper business. It will continue to enhance it’s product mix according to the requirements of OEM clients. Bhagyanagar is looking at a minimum of 10 percent volume growth in this year.

The situation post GST looks very promising. The company currently has an overall installed capacity of 9 MW comprising of 7 wind turbines in state of Karnataka and 6.4 MW comprising 5 wind turbines in Tamilnadu. We have a Buy recommendation with target price of Rs 55, stoploss Rs 47.

Disclaimer: The author is Founder, Equity99. 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.
First Published on Apr 14, 2018 01:03 pm
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