Kshitij Anand Moneycontrol News
The Bharatiya Janata Party (BJP) is all set to form the government for the fifth time in Gujarat. It was a close fight between the incumbent part and the opposition Congress. But, the ruling party pulled ahead after crossing the halfway mark.
Latest trends showed the BJP leading in 104 seats and the Congress ahead in 76 in the state of Gujarat. The party has also fallen short of its 2012 tally of 115 seats, but that was something which market had factored in.
The ruling party which had a stronghold in the state since 1995 had to overcome anti-incumbency and discontent over demonetisation and GST. But, going forward, it will not be easy as Congress is likely to put up a good fight.
“The results were not according to expectations for BJP which shows that the even the ruling government can’t take things for granted. They have to be on their toes and perform,” Nirmal Jain, Chairman, IIFL told CNBC-TV18
“As far as the market is concerned there are several other factors such as global liquidity, domestic money flowing into mutual funds, commodity prices are stable after peaking out etc.,” he said.
Even though the index might move in a range, investors should focus on Gujarat-based stocks which should continue their winning momentum up till general elections 2019.
We have collated a list of top 9 stocks from different experts which could give up to 46 percent return in next 12-24 months:
Analyst: Achin Goel, Head of Wealth Management and Financial Planning at Bonanza Portfolio
Adani Ports and Special Economic Zone: BUY| Target Rs468| Return 16%
Adani Ports and Special Economic Zone Ltd (APSEZ) is the integration of 3 verticals consisting of Ports, Logistics, and Special Economic Zone. The company has a pan India presence in 10 locations with the flagship Mundra port in the Gulf of Kachchh, also India's largest commercial port.
During FY 13-17, company’s revenue has grown at a CAGR of 24% and PAT has grown at a CAGR of 25%.We are expecting company’s revenue to grow at 18% CAGR for next 3 years. We recommend a BUY call on APSEZ at a PE 15x of FY20 EPS with a target price of Rs468.
Gujarat Heavy Chemicals: BUY| Target Rs452| Return 46%
Gujarat Heavy Chemicals Limited (GHCL) is a well-diversified group with an ascertained footprint in Chemicals, Textiles, and Consumer Products segment.
In Chemicals, the company mainly manufactures Soda that is a major raw material for Detergents & Glass industries and Sodium Bicarbonate (baking soda).
Its Textiles operations is an integrated vertical set up which commences right from the spinning of fiber (yarn), weaving, dyeing, printing till the finished products, like sheets & duvets, take shape which is primarily exported worldwide.
Consumer Products operation is another business for GHCL where it is a leader in manufacturing and selling Edible salt, Industrial grade salt and Honey in the country.
During FY 13-17, Company’s revenue has grown at a CAGR of 6% whereas net profit has grown at a CAGR of 52% as profit margin improved from 2.9% to 12.7%.
We are expecting company earnings to grow at 18 percent CAGR for next 3 years as demand for chemicals and textiles in India will be strong. We recommend a BUY call on GHCL at a PE 9x of FY19 EPS with a target price of Rs. 452.
Gujarat Alkalies and Chemicals Ltd: BUY| Target Rs894| Return 21%
Gujarat alkalies and chemicals limited (GACL) is the single largest producer of Caustic Soda in India, with a production capacity of 452,100 TPA.
Its products include Caustic soda, Caustic Potash, Hydrogen Peroxide, Chloro methane, Sodium Cyanide, Phosphoric Acid, Poly Aluminum Chloride, Anhydrous Aluminum Chloride and Sodium Chlorate.
We are expecting company’s revenue to grow at 8% CAGR for next 3 years and its profits to grow at 10% CAGR for next 3years. We recommend a BUY call on GACL at a PE 15x of FY20 EPS with a target price of Rs. 894.
Gujarat Narmada Valley Fertilizers & Chemicals Ltd: BUY| Target Rs573| Return 20%
Gujarat Narmada Valley Fertilizers & Chemicals (GNFC) is engaged in manufacturing and selling fertilizers such as Urea, Ammonium Nitro phosphate under the umbrella NARMADA.
GNFC has one of the largest Ammonia plant, a reference plant in the world of fuel oil based technology along with the world's largest single stream Urea plant.
With a strong nationwide network of dealers, GNFC is able to reach even the smallest of consumers in Indian. We are expecting company earnings to grow at 12% CAGR for next 3 years and we recommend a BUY call on GNFC at a PE 12x of FY20 EPS with a target price of Rs.573.
Analyst: Viral Chheda, Sr Analyst, SSJ Finance & Securities
Atul Ltd: BUY| Target Rs3800| Return 47%
For 2 years from June 2012 to March 2014 stock moved in a range of 200 points between Rs278 to Rs478 levels. The stock consolidated in this range and in Apr 2014 gave a breakout on the higher side and make high of 1515.
The stock continued its upside rally forming Higher Top and Higher Bottoms Pattern in between before making all-time high around 2395. Currently, for the past 12 months, we have seen the stock moving sideways in the range of 700 points.
The stock has made Multiple Bottom around Rs1900 and once it breached Rs2600 on the higher side we can see a sharp upside rally till Rs3600-3800.
Investors can buy on dips around current level and in dips of Rs2400 with a Stop Loss of Rs1880 on a closing basis with Target of 3600-3800 in a period of 12 to 24 months.
Analyst: Santosh Meena, sr Research Analyst, Swastika Investmart Ltd.
Adani Transmission: BUY| Target Rs260| Return 28%
Adani transmission is one of our top pick from Gujarat theme. Government’s aim of 24X7 electricity is a key trigger for transmission business where it has aggressive growth to drive economies of scale and synergy benefits.
It is known for timely execution of its project and it has ample opportunities in the transmission business. On technical charts, it is breaking out from a falling channel formation after a meaningful correction and may show strong momentum to resume its uptrend where it may head towards the level of 260.
Arvind: BUY| Target Rs500| Return 15%
Arvind Ltd is already on investors' radar after it announces demerger of Branded and retail business to value unlocking and to shift focus in favor of high-asset turnover and technology-driven expansion.
On the technical chart it witnessed breakout of a very long period of consolidation in the month of November and after then it is hovering around 400 mark. There is a good chance that it may breakout in upside to begin a new leg of a rally for the upside of 500 level.
Analyst: Dinesh Rohira, Founder & CEO, 5nance.com
Gujarat State Petronet Ltd (GSPL): BUY| Target Rs250| Return 22%
GSPL reported a stronger Q2FY18 result with its standalone revenue for the quarter increased at 29.8 percent YoY. which was primarily driven by 32 percent increase in revenue from its core business of gas transportation.
The EBITDA for the quarter grew by 26 percent year-on-year (YoY) to Rs285 crore coupled with an increase in PAT by 36 percent YoY. Further, the scrip is currently trading at P/E of 19x marginally lower than industry P/E of 22x. Apart from maintain healthy dividend payout, the company also managed to lower its debt obligation from the balance sheet.
Edelweiss maintains a buy recommendation on the stock with a target price of Rs250.
Gujarat Gas: BUY| Target Rs1123| Return 34%
Gujarat standalone revenue for the Q2FY18 came in at Rs. 1430 crore, reporting 12.3 per cent year-on-year increase.
Despite reporting sluggish earnings result in terms of EBITDA and PAT growth for the same quarter, it outlined a stronger expectation for the next period with GST disruption getting factored, coupled with new projects in the pipeline to be commissioned in the current fiscal year.
Further, the growth in metros and tier-2 cities is expected to fuel demand for realty and auto sector which will, in turn, create demand for gas, which is positive for Gujarat Gas.
Edelweiss maintains a buy recommendation on Gujarat Gas with a target price of Rs1123.
Disclaimer: 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.
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