It being the Mother’s Day, she deserves a gift more than anyone else. Here is a gift option for the financial prudent since its value could grow with time.
You can empower your mother with a financially fit future by investing in equities on her behalf. Taking everything a notch above, you can even teach her how to invest.
Doing so will not only ensure good returns and an additional revenue stream for her, but also convey how much you care for her.
To get you started, here are some of the stocks from different sectors that you can gift your mother this Mother’s Day:
Escorts: Target price: Rs 1,573
Escorts is a prominent tractor player with a market share of more than 11%. But, what makes Escort an ideal choice? Firstly, it is a particularly strong brand name in the northern as well as the eastern belt of India.
The brand is likely to be a key beneficiary of the tractor industry growth in FY21. The prediction is based on record food-grain procurement by government agencies as well as better than expected Rabi crop and prospects of a normal monsoon.
Escorts, in the recent past, has also entered into a strategic partnership with Kubota Corporation of Japan (one of the global leaders in farm machinery and implements), which provides further visibility of growth for the company going forward.
Crompton Greaves Consumer: Target price: Rs. 480
Another good choice would be Crompton Greaves Consumer Electrical (CGCEL). It is one of the India’s leading fast-moving electrical goods (FMEG) companies.
It has a strong presence in the fan and residential pump category with a market share of 24% and 28%, respectively. Over the years, the company has been focusing on increasing the contribution from premium products in its portfolio, which will lead to better realizations and margins.
The premium fan category now accounts for ~20% of the company's fan business, up from 14% in FY17. It is expected to improve further. On the lighting front, CGCEL is focusing on high-margin street lights, fixtures, and battens business.
Galaxy Surfactant: Target price: Rs. 3,200
The company is a market leader in oleochemical-based surfactants that are used in personal and home care products including skincare, oral care, hair care, cosmetics, toiletries, and detergent products.
The company has been increasing its share of high-margin specialty care products in its portfolio, which now accounts for ~40% of its revenues.
The company has a very strong relationship with its MNC clients including Unilever, P&G, Henkel, Colgate-Palmolive. The company is expected to post strong earnings growth in FY21 driven by ramp-up in its specialty portfolio.
The reason behind this forecast is normalization in global supply chains due to significant improvement in the Covid situation in the developed economies.
MindTree: Target price: Rs. 2,550
The key to making profits from stocks is to invest in companies that are trusted and bound to grow in the future. One such brand is MindTree.
It is one of the leading mid-cap IT service providers and part of the L&T group with revenues of over USD 1 billion in FY21.
The company has a very strong presence in BFSI, communications, media & technology, retail, CPG & manufacturing, and travel & hospitality segments.
The company has reported good numbers for Q4FY21 with 5.2% quarter-on-quarter growth in revenues to USD 288.2mn while new deal wins also remained strong at USD 375mn as compared to USD 312mn in Q3FY2021.
The company was one of the worst impacted in the sector due to the company’s high exposure to the travel and hospitality segment.
However, with significant improvement in the Covid situation in developed economies, we expect a strong recovery in the travel and hospitality segment, which will drive growth for the company in FY22.
Federal Bank: Target price: Rs. 110
Federal Bank is one of India’s largest old generation private sector banks. It had deposits of Rs. 1.6 lakh crore and a loan book of Rs. 1.25 lakh crore at the end of Q3FY21.
On the asset quality front, non-performing assets have remained steady for the bank over the past few years. Also, the Covid-19 impact has been limited on the asset quality front so far.
The company has posted decent numbers for Q3FY21 as its loan book grew by 6 percent year-on-year (YoY) led by strong growth in its retail portfolio.
Federal Bank is one of our top picks in the mid-cap banking space and we expect the bank to post strong Non-institutional investor (NII) and profit after tax (PAT) growth of 20.6%/17.8% between FY20 and FY21.
Use this Mother’s Day to not only celebrate the love for mothers but also make a smart choice with a gift that secures her future. Invest in any of the above-mentioned stocks and give a well-thought present to your mother.
Disclaimer: The views and investment tips expressed by the investment experts 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.