The Nifty started January series on a positive note wiping out most of the weekly losses in Friday's trading session
The market was highly volatile in the week gone by amid domestic and global cues including December F&O expiry, bond sale by govt, Jharkhand elections, capital infusion in PSU banks and US-China trade deal.
Foreign institutional investors (FIIs) remained net buyers in the week ended December 27 pumping in Rs 926.14 crore in the equities market, while Domestic Institutional Investors (DIIs) sold equities worth of Rs 2046.35 crore.
"Year-end holidays next week may keep markets lackluster. Global markets are ending the year on a high as hopes of an early phase 1 deal between US and China has improved sentiments. On the domestic front, RBI is expected to conduct the operation twist for the second time next week in an effort to bring down long term interest rates," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.
"Nifty breached lower highs - lower lows sequence of last three sessions and till it sustains above its support of 12,100, we maintain a positive stance on the market for an up move towards 12,350 then 12,400 zones,” he added.
Here are the top 10 brokerages buying ideas for an upside of 11-48 percent in medium to long term:
Gujarat Gas | Brokerage: SMC Global | Rating: Buy | Target: Rs 262 | Upside: 16 percent
The company has strong and steady revenue growth momentum and sustainable margins. It shall continue to focus on growing the penetration in the current operating areas by increasing the PNG connections and additional CNG stations while tapping the untapped potential by expeditious rollout of distribution network in the newly acquired geographic areas as well.
With this focused endeavour, the company shall continue its efforts in providing clean fuel solutions across all operational area to augment an energetic top-line and bottom-line in coming years.
KEC International | Brokerage: SMC Global | Rating: Buy | Target: Rs 392 | Upside: 31 percent
The management of the company expects international business to pick up with large order inflow from Jordan, Saudi, Far East (Indonesia, Thailand), etc and international T&D, sub-stations and civil infra will be key drivers for FY20.
The company has maintained its annual guidance of 20 percent growth for FY20 revenue.
The company reported a 42 percent increase in consolidated profit after tax to Rs 139 crore in Q2 September 2019 as against Rs 98 crore in Q2 September 2018. Revenues increased by 17 percent to Rs 2,809 crore in Q2 September 2019 as against Rs 2,408 crore in Q2 September 2018.
Mahanagar Gas | Brokerage: Globe Capital Market | Rating: Buy | Target: Rs 1,355 | Upside: 29 percent
The company is using innovative modes of gas supply that augment growth in future. NITI Aayog agenda to expand CGD (City Gas Distribution) in 326 cities by 2022 from existing 228 authorized Geographical Area.
At CMP of Rs 1,046, the stock is trading at ttm P/E multiple of 14.36X with ttm EPS of Rs 73.16. With the government’s focus on clean fuel, we expect an exponential growth or value unlocking going forward. Hence, recommend buy for the target price of Rs 1,355 in the medium to long term.
Max Financial Services | Brokerage: Sharekhan | Rating: Buy | Target: Rs 590 | Upside: 11 percent
The company valuation appears attractive as they are at a steep discount compared to some of the listed bank-owned insurance players. There are significant long term positives in the strong operational numbers for the company.
Hindustan Petroleum Corporation | Brokerage: Geojit | Rating: Buy | Target: Rs 312 | Upside: 17 percent
The brokerage house expects crude oil prices to pick up in the second half of this year. Also, diesel cracks (currently at USD 16) are expected to improve further eventually going above USD 20 owing to IMO regulations, thus improving the gross revenue margins.
The company's future growth prospects look promising on the back of these factors. Hence, upgraded the stock to a buy with a revised target price of Rs 312 based on SOTP.
HG Infra Engineering | Brokerage: AnandRathi | Rating: Buy | Target: Rs 377 | Upside: 43 percent
In order to reduce concentration risk, the company is looking to diversify into segments other than roads.
The management has lowered its FY20 guidance to this extent, to Rs 24 bn from RS 25 bn guided-to earlier. For FY21, it expects revenues of Rs 30-32 bn.
EID Parry | Brokerage: AUM Capital | Rating: Buy | Target: Rs 272 | Upside: 36 percent
The company has positioned itself strongly in the field of human health and wellness. It is the first and amongst few with a dedicated R&D wing and cane breeding program.
On standalone basis, the company has drastically reduced its debt from Rs 1,977 crore in FY14 to Rs 832 crore in FY19 by focused cost management and fiscal prudence.
Varun Beverages | Brokerage: AnandRathi | Rating: Buy | Target: Rs 862 | Upside: 23 percent
With company’s healthy execution capabilities with several production facilities and strong distribution network, sound financials and expansion of footprint with the recent acquisition of franchise rights in South and West regions, we believe the company is well-positioned for continued growth.
As part of growth strategy, the company remains focused on product mix diversification, distribution expansion particularly in rural and semi-urban areas, cost reduction and technology leverage to improve overall efficiency.
UltraTech Cement | Brokerage: Motilal Oswal | Rating: Buy | Target: Rs 5,050 | Upside: 24 percent
Market mix has improved post-acquisition with the North/Central-India (both regions have better utilization outlook) contributing 45 percent to volumes while the share of weaker regions (the South/East) has declined.
Estimate 26 percent CAGR for EBITDA and 48 percent CAGR for EPS over FY19-21. Driven by strong operating cash flows and reduction in interest cost, RoE/RoCE should improve by 550bp/420bp to 13.8 percent/11.2 percent over FY19-21.
ONGC | Brokerage: Motilal Oswal | Rating: Buy | Target: Rs 190 | Upside: 48 percent
The stock is trading at 5.0x FY21E consolidated EPS of Rs 27.3. We value the company at 8x FY21 standalone EPS of Rs 19.9 (excluding other income) adding the value of investments.
Comapny's (standalone) capex guidance stands at Rs 320 bn/ Rs 350 bn for FY20/FY21.
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