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Last Updated : Feb 17, 2020 10:05 AM IST | Source: Moneycontrol.com

Brokerage bets: Experts find these 10 stocks attractive for one-year investment horizon

Market benchmarks did hit fresh record highs amid all headwinds, but analysts and experts point out that this market is flying high on stock-specific gains and the rally is still not broad-based.

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For almost over a year now, the Indian market has been experiencing domestic and global headwinds.

First the US-China trade war and now the coronavirus threat emerged as the major causes of worry from the global front.

Market benchmarks did hit fresh record highs amid all this, but analysts and experts point out that this market is flying high on stock-specific gains and the rally is still not broad-based.

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At this juncture, the most prudent approach for investing is finding stocks and sectors that can maximise the chances of gains and minimise the probability of losses.

Brokerages have suggested 10 stocks that look attractive and may give up to 48 percent returns in one year. Take a look:

Brokerage: Motilal Oswal Financial Services

Coal India | Buy | LTP: 174.70 | Target price: Rs 258 | Upside: 48%

"While questions have been raised over the sustainability of thermal coal in India, we believe that coal would continue to dominate India’s electricity generation," said the brokerage.

Over the medium term, Motilal expects volumes to continue growing for Coal India at nearly 5 percent. The brokerage is of the view that despite the high base of FY19, ongoing efficiency measures, along with volume growth, should drive nearly 3 percent adjusted EBITDA CAGR over FY19-22.

Ashoka Buildcon | Buy | LTP: Rs 102.55 | Target price: Rs 150 | Upside: 46%

After the Q3 numbers, management has cut its FY20 revenue growth guidance from 25 percent to 15 percent. Motial Oswal said they are more conservative on their assumptions to factor in 11 percent growth in standalone revenues.

"Standalone balance sheet remains strong as gross debt stood at Rs 510 crore by end-December 2019. The company hasn’t faced many issues with respect to receivables as well as grants from the government," said the brokerage.

Prism Johnson | Buy | LTP: Rs 63.50 | Target price: Rs 90 | Upside: 42%

Prism Johnson’s Q3FY20 reflects margin improvement due to strong cost savings. Over FY20-22E, Motilal Oswal expects margins to improve by 0.9pp and return on equity (RoE) to improve by 3.5pp.

"With a strong presence in the Central-India region, the company will be a key beneficiary of healthy pricing in the region. However, the turnaround in TBK operations will be monitorable," said Motilal Oswal.

CESC | Buy | LTP: Rs 713.85 | Target price: Rs 970 | Upside: 36%

CESC’s third-quarter results highlighted the benefit of the improved performance of its DF businesses and lower losses at Dhariwal, with consolidated PAT increasing 12 percent YoY.

"We expect the performance at Dhariwal and DFs to continue to improve. Despite factoring in the tightening of norms at some plants, the stock trades attractively at 7.5 times FY21E P/E," said the brokerage.

Mahindra & Mahindra | Buy | LTP: Rs 523.05 | Target price: Rs 686 | Upside: 31%

Mahindra & Mahindra’s UV business is facing BS-VI challenges for its diesel portfolio and also intense competition.

However, as per the brokerage, tractor segment appears to be recovering. Valuations at nearly 14.2 times/12.8 times FY21/22E earnings per share (EPS) largely factor in risks in UV, said Motilal.

Brokerage: Anand Rathi Shares & Stock Brokers

Dixon Technologies (India) | Buy | LTP: Rs 4,487.15 | Target price: Rs 5,899 | Upside: 31.5%

Dixon’s Q3FY20 performance in customer addition continued to be robust and is the key positive. Consolidated PAT shot up 51 percent YoY.

Incremental volumes from customers such as Reliance Jio, Havells, HPL Electric, Samsung and Voltas Beko would be monitorable in forthcoming quarters, said the brokerage.

Nippon Life India Asset Management | Buy | LTP: Rs 393.85 | Target price: Rs 485 | Upside: 23%

The company is one of the largest asset management companies in India which manages funds for provident fund bodies and government-managed pension Funds schemes.

Nippon Life Insurance Japan has completed acquisition of a 75 percent stake in the company from Reliance Capital so now has a very strong and growing SIP book of over Rs 10,000 crore per year.

Axis Bank | Buy | LTP: Rs 736.40 | Target price: Rs 902 | Upside: 22.5%

Focus on corporate lending, trade finance, syndication, investment banking and liability businesses are key positives for the stock. Improving asset quality trends and strategy focus are also the points that make it an attractive buy.

Tata Global Beverages | Buy | LTP: Rs 396.90 | Target price: Rs 473 | Upside: 19%

Strong branded portfolio of products, improving distribution and reach and restructuring initiatives are positives for the

stock.

Expected revenue and cost synergies from the merger with the consumer business of TCL and favourable macro traits are also expected to augur well for the stock.

Titan Company | Buy | LTP: Rs 1,292.25 | Target price: 1,528 | Upside: 18%

Titan is a well-diversified conglomerate, having a market leadership position in jewellery, watches business and eyewear business. Titan also operates in perfumes and saree business.

A strong brand, growing store network, focus on wedding jewellery looks intact. For Q4FY20, the management is targeting revenue growth in the range of 11-13 percent.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their 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 Feb 17, 2020 10:05 am
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