Sumit Bilgaiyan Equity99
Last Friday was one of the most volatile days in this decade as the benchmark Sensex swung nearly 1,500 points, or 4 percent in intraday trade. The rumours of the debt crisis in the NBFC sector triggered panic selling across the board, especially in banking and housing finance stocks.
Rupee weakness, higher crude oil price and worries over trade war between the US and China were the main concerns for the market and now fear of NBFC crisis is fresh reason for increased volatility.
We believe Friday's low will act as a strong support level for Nifty, Bank Nifty as well as stocks. IL&FS crisis will bring volatility in the market in the expiry week so it is better to adopt wait and watch approach during this week.
Trump's 10 percent tariffs on about $200 billion worth of Chinese goods will take effect on September 24. Garden Reach Shipbuilders & Engineers IPO will open on September 24. Aavas Financiers' IPO will open on September 25. FOMC will hold its meeting on September 25-26.
Here is the list of three stocks which could give better return:
Maharatna ONGC is India’s third largest profit making company after Reliance Industries and TCS but RIL and TCS have proven one of biggest wealth creators in last 4-5 years while ONGC has proven wealth destroyer in last 4-5 years.
The company has posted fantastic numbers in Q1FY19 led by higher crude oil prices. Its sales and EBITDA grew by 42.67 percent and 49.1 percent YoY, respectively, while PAT increased by 58.15 percent. EBITDA margin was at 49.95 percent against 34.82 percent in Q4FY18 and 46 percent in Q1FY18. It has paid a healthy 132 percent dividend for FY18.
At the CMP, the stock trades at a P/E of 9.5x. ONGC realised $71.48 for every barrel of crude oil it produced in the April-June quarter of the current fiscal and strong performance continue in the second quarter due to higher crude oil price.
Technically the stock has formed the cup and handle pattern break out on daily chart which is bullish in its nature. We are recommending a Buy for short term.
Syngene is a subsidiary of Biocon and an internationally reputed custom research and manufacturing organisation, which supports R&D programs from lead generation to clinical supplies.
Syngene has posted mixed numbers in Q1FY19. Its profit zoomed 6.5 percent and EBITDA increased 13.8 percent while revenue increased by 39.5 percent. EBITDA margin decreased by 608 bps to 26.9 percent. The stock is trading at a PE ratio of 41x. The stock looks good on the daily and weekly chart so we are recommending a Buy for medium term.
Gujarat Alkalies and Chemicals
GACL reported excellent results for QQFY19, Its sales and EBITDA grew by 38.4 percent and 86.7 percent YoY, respectively, while PAT increased by 92.1 percent. At CMP, the stock is trading at PE of just 7.2x on its EPS (TTM) of Rs 84.83 per share.
Recently Company has flagged off the first dispatch from the new Poly Aluminium Chloride plant having capacity of 32000 TPA. The company wants to achieve Rs 5,000 crore turnover by 2022.
To achieve this ambitious plan company is on a mega expansion mode and is expected to be completed in a phased manner by FY21. We believe this stock can give superb returns in a long run, so we are recommending a Buy for long-term investment prospective.
Disclaimer: The author is Founder, Equity99. 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.
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