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Last Updated : Mar 04, 2020 12:34 PM IST | Source: Moneycontrol.com

These 6 'turnaround plays' stand tall amid coronavirus, economic headwinds; do you own any?

From the lingering slowdown in the economy to the outbreak of coronavirus, the market has a lot to deal with.

 
 
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Experts and analysts had just started saying that the Indian market was bottoming out when the outbreak of coronavirus forced made them to review their stance.

Many of them now say that the market may see another 3-4 percent correction, if the cases of viral infection continue to rise. India has, so far, confirmed six coronavirus cases.

"The market has a space to correct 3-4 percent more if more cases unfold in few more days," said Sameer Kalra, Founder, Target Investing.

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From the lingering slowdown to the virus outbreak, the market has a lot of headwinds to face.

Yet, some pockets of the equity universe have shown resilience, enduring the storm to climb higher. Select stocks from these sectors are likely to gain, thanks to their strong business model.

"While the overall economic healing will be a protracted process, some pockets of businesses have been turning around perceptibly with their biz model becoming more robust. They are exhibiting improving earning visibility bouncing off from their cyclical or protracted trough," said brokerages firm HDFC Securities.

"Mahindra & Mahindra, Tata Motors, Axis Bank, State Bank of India, Mahindra & Mahindra Financial, Federal Bank, RBL Bank, United Spirits, Symphony, Aditya Birla Fashion, DLF, Mindtree, Tata Steel and Bharti Airtel are some attractive, under-priced turnaround plays. This is our biggest overweight segment."

Other than these turnaround plays, there are other select stocks that have the potential to give healthy returns in the medium to long term.

Brokerage firm Anand Rathi Shares and Stock Brokers has handpicked six stocks that have the ability to withstand the volatility of the market and can give healthy returns in a one-year timeframe. Take a look:

Hindustan Unilever (HUL) | Buy | Target price: Rs 2,422 | Upside: 12 percent

As per the brokerage, HUL, the largest FMCG company in the country, which has an impressive range of products and an expansive distribution network, should drive healthy growth in the medium to long-term with its strategy to target volume growth.

Titan Company | Buy | Target price: Rs 1,528 | Upside: 23 percent

Titan has registered a revenue CAGR of 13.5 percent in the last five years. Anand Rathi expects Titan to grow at a CAGR of 19 percent over FY20 to FY21.

"Investments in the digital segment, during FY 2018-19, was substantial and the division expects to reap the benefits in FY 2019-20 and beyond," said the brokerage.

ICICI Bank | Buy | Target price: Rs 617 | Upside: 19 percent

With improving asset quality and better growth trends, the brokerage believes ICICI Bank is favourably positioned to deliver superior profitability and return ratios.

"We continue to remain positive on the company over medium to longer-term perspective," the brokerage said.

Bata India | Buy | Target price: Rs 2,180 | Upside: 35 percent

Given the company’s improving product mix with a focus on design and technology, solid brand recognition, expanding distribution network and favourable macro traits, it is well positioned to continue long-term growth, said the brokerage.

HDFC Life Insurance Company | Buy | Target price: Rs 710 | Upside: 26 percent

Given HDFC Life’s product mix, diversified distribution network, a track record of strong performance and favourable macro traits, the brokerage believes the company is poised for long-term growth.

Nippon Life India Asset Management | Buy | Target price: Rs 485 | Upside: 20 percent

The company has a very strong and growing SIP book of over Rs 10,000 crore per year, which helps provide predictable flows.

"The company has come up with a lot of innovative products which will help to gain market share on the back of strong distribution network," Anand Rathi said.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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First Published on Mar 4, 2020 12:34 pm
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