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Last Updated : Oct 25, 2019 12:49 PM IST | Source: Moneycontrol.com

Bajaj Auto, HDFC Bank among top 10 Muhurat picks for Samvat 2076

The BSE and NSE will remain open for an hour on October 27 for the Muhurat Trading.

 
 
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Benchmark indices found new highs in a highly volatile Samvat 2075 amid mixed global cues and domestic data.

The second successive term for Narendra Modi-led NDA government in May helped the indices test record highs. The upmove, however, couldn’t be sustained after the Budget, which was presented on July 5, amid slowdown in the economy and country’s weakening financial position.

The Nifty touched its all-time high of 12,103.05 and the Sensex touched 40,308 on June 3 on intraday basis.

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AUM Capital expects the markets to remain volatile and advises investors to stick to quality, where strong balance sheets, ethical managements and growth prospects should be the deciding factors.

It expects better returns in Samvat 2076 when compared to the year gone by.

The Sensex has risen 11.5 percent and the Nifty 10 percent since the last Muhurat trading session of November 7, 2018

While BSE Midcap index was down 2.6 percent, BSE Largecap gained over 9 percent. The BSE Smallcap index fell 8.4 percent in the last one year.

The Bombay Stock Exchange and the National Stock Exchange will open for an hour on October 27 for Muhurat Trading.

The pre-opening session will be between 6 pm and 6:08 pm and opening bell ceremony at 6.15 pm and trading will continue for an hour up to 7.15 pm.

Top 10 Muhurat picks for Samvat 2076:

Brokerage: Aum Capital

Apollo Hospitals Enterprises

Apollo Hospital Enterprise is the largest private healthcare services provider in India. It completed a capacity expansion of Rs 3,000 crore. Its geographic footprint includes 70 hospitals across 55 specialties in India and overseas, with a capacity of 10,167 beds as on March 31, 2019.

The company is focusing on reducing debt from Rs 3,300 crore to Rs 2,500 crore and improving operational performance .

Its innovative R&D, strong brand equity, technology-enabled and superior service, with completion of major projects, could boost the margins and return ratios.

Rise in prices, increase in occupancy level, improved mix of integrated business models in the healthcare space and promoters intention to reduce debt will offer a better risk reward perspective for the company.

Bajaj Auto

Bajaj Auto is India's largest exporter of motorcycles and three-wheelers, with a presence in more than 79 countries and exports accounting for 41% of total volumes.

India switches to stricter emission norms from April 2020, which has raised questions over demand sustainability. In such a scenario, Bajaj Auto is likely to be the industry’s safest bet due to its export volumes.

It will start switching to BS-VI emission norms from November, with the commencement of production of BS-VI models.

The company, with robust financial and diversified product mix, is trading at an attractive valuation, which will help in gaining market share.

ICICI Lombard general Insurance Company

The company offers a range of insurances such as travel, motor, health and home insurance and other products.

Recent developments in regulations like compulsory third-party insurance for two-wheelers and cars for 5Y and 3Y respectively, allowing re-pricing of health insurance annually (3Y earlier), have also improved the prospects of the industry and ICICI Lombard being the industry leader stands to be one of the biggest beneficiaries.

The corporate tax rate will benefit the company  as well.

The company has a greater chance to raise its coverage, as the management is focusing on increasing penetration in tier 3 and 4 cities, which will help in the growth of retail business such as agency channel, health and SME.

Kotak Mahindra Bank

Apart from the banking business, all other businesses of Kotak Mahindra Bank via its subsidiaries viz. AMC, insurance, broking, personal finance, etc have performed well along with wealth creation and built a brand image.

The bank is well positioned vs peers due to higher capitalization, a strong liability franchise and benign asset quality, which will allow it to gain further market share.

It has witnessed a significant traction in CASA and expects strong traction in earnings to continue owing to robust growth in loan book, moderate credit cost and healthy margins.

Polycab India

The company exports products to 40 countries, which contributes to around 5% of the total revenue.

In April 2019, the company raised Rs 1,346 crore through an IPO. With IPO funds, improvement in margins and strong cash flow, the company expects to be debt-free in two or three years.

SBI Life Insurance Company

The company has expanded its private market share based on Individual Rated Premium (IRP) from 21.9% in H1FY19 to 23.1% in H1FY20.

Given the favourable demographics along with tailwinds from increasing awareness of the need for financial protection, lowest operating cost ratios, technology-driven services and improving margins, SBI Life’s growth momentum is likely to continue.

Bonanza

HDFC Bank

HDFC Bank will be able to gain market share driven by strong leadership position across segments, largest distribution, digital focus and strong capital adequacy.

The bank has maintained healthy margin despite pressure on cost of funds over the last few quarters. Despite a healthy growth in CASA deposits, the bank has been at the forefront of use of technology to improve business productivity.

Havells India

Expect the company's revenue growth to decline to 6% in a FY20E, impacted by economic slowdown and restructuring of Lloyd business and bounce by 14% in a FY21E as the demand revives and the Lloyds business recovers post its structuring.

The company is trading at 38x its FY21E EPS, which is at 16% discount to its three-year historical average one-year forward PE.

HCL Technologies

During Q1FY20, the company won 12 transformation deal across its service line lead by financial service, manufacturing and retail and majority of its verticals are delivering double digit growth.

High deal win and high organic growth have increased its confidence to increase guidance for the current year.

The stock offers 20.1 percent revenue CAGR (FY16-FY21) and 18.4 percent PAT CAGR in the same period.

Kansai Nerolac Paints

The company is witnessing healthy demand in decorative paint segment led by rising geographic penetration, increase urbanization, premiumisation and up trading.

The automatic segment is expected to improve going forward led by government reforms, rise in system level liquidity and interest rate cuts.

Disclaimer: The views and investment tips expressed by 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.

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First Published on Oct 25, 2019 12:49 pm
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