We remain constructive on India's overall economic growth going forward and suggest that investors may continue to build equity exposure for the long term
Currently, the market is watching the ongoing trade talks between US-China. Officials are yet to negotiate a breakthrough, but there are hopes that a meeting between the two presidents could help the discussions.
The expectations are high for big economic reforms in the upcoming Budget and all eyes are on the government to take measures to stimulate the economy. Continuity in reforms, public spending, fiscal prudence and social welfare initiatives will be the key factors to look out for.
Union Budget will be an opportunity to revive the economy that slowed down to 5.8 percent in FY19. After a mixed sectoral performance in the first half of CY19 in which the rally was driven by select stocks, a revival in corporate earnings and private capex in the second half can give the much-needed fillip to the market.
Valuations for the broader market still offers a good return for the long-term investors. It is advisable to adopt a phased approach rather than investing a lump sum.
With the election-related uncertainty over and the incumbent government getting a strong mandate, we remain constructive on India's overall economic growth going forward and suggest that investors may continue to build equity exposure for the long term.
Here are three bluechips that could give double-digit return:
HDFC Bank: Buy | Target: Rs 2,820 | Return: 14 percent
Capital constraints in public sector banks will provide an opportunity for the private sector banks to increase their market share and outperform in banking & financial services space.
The Bank has registered strong AUM growth of over 20 percent CAGR in the past four years with asset quality staying under control.
Hindustan Unilever: Buy | Target: Rs 2,250 | Return: 28 percent
For the full year ended Mar'19, the company’s revenues grew 10.7 percent at Rs 38,200 crore in FY19 against Rs 34,500 crore in FY18.
The rural market continues to remain a key driver for the growth registering 1.1 times faster growth than urban markets during the quarter.
Larsen & Toubro: Buy | Target: Rs 1,820 | Return: 17 percent
The quarter witnessed growth in several segments including infrastructure, heavy engineering, hydrocarbon and IT and Technology services.
The company won new orders worth Rs 1,76,834 crore at the group level during FY19, increasing 16 percent over the previous year.
The author is Vice President - Equity Advisory at Anand Rathi Shares and Stock Brokers.Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Are you happy with your current monthly income? Do you know you can double it without working extra hours or asking for a raise? Rahul Shah, one of the India's leading expert on wealth building, has created a strategy which makes it possible... in just a short few years. You can know his secrets in his FREE video series airing between 12th to 17th December. You can reserve your free seat here.