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    Markets sinking; top five wealth creating ideas by experts for next 6-12 months

    Synopsis

    Markets pared gains weighed down by both global as well as domestic factors. Despite headwinds, India still remains in a structural bull run.

    ET Online
    NEW DELHI: The S&P BSE Sensex might have wiped out entire gains made in the year 2015, but there are still lots of opportunities in individual stocks which can deliver double-digit returns in the next 6-12 months.

    Indian markets pared gains weighed down by both global as well as domestic factors. Despite headwinds, India still remains in a structural bull run, and investors should use dips to accumulate stocks to build up their long-term portfolio.

    There is a lot of money to be made in India, says Dharmesh Mehta, Deputy MD& CEO, Axis Capital. But investors have to catch those kinds of diamonds which are still not discovered by the markets, and you have lots of them, he adds.

    "When bull markets happened in a very long-term bull market, like four-five years, you are going to get stocks which are going to give you 4x, 5x or 10-20x," says Mehta.

    Disappointment over the pace of economic revival, sluggish corporate earnings, delay in interest rate cuts and sub- normal monsoon are some of the factors which weighed on sentiments, leading to the recent declines in the stock market.

    On the global front, uncertainty around Greece debt situation, and prospects of a sooner-than-later US Fed rate hike on weak macro data in the US also fuelled volatility.

    "The markets are likely to remain rangebound between probably 7900 and 8400-8500 over the next few months as we see clarity on inflation coming out of the bad monsoons. Rate-sensitives should be something that one would keep on the radar," says Tirthankar Patnaik, India Strategist, Mizuho Bank Limited.

    "Towards the end of FY16, we will end up with the higher GDP number, we will end up with somewhat controlled inflation number and we will again end up with a current account deficit which will remain under control. Now, from a macro perspective, these are reasons enough that one would put capital into India," he adds.

    Patnaik is of the view that this is the time to look at blue-chips. Market is offering stocks that are significantly undervalued. Now is the time to get into stocks and hold them for long, he adds.

    Here is a list of top five wealth-creating ideas from different experts for a period of 6-12 months:

    Image article boday


    Analyst: Vikas Sethi - MD, Sethi Finmart Pvt Ltd

    HSIL: Target price at Rs 550

    I would like to recommend a stock which has seen a sharp cut in the recent days or fortnight. It has corrected close to 27% from its recent highs despite having nothing to do with anything negative as far as the fundamentals of the company is concerned. The name of the stock is HSIL, the Hindustan Sanitaryware India. This is a leading sanitaryware company in the country with a dominant 40% market share. The company has a very strong brand, variety of product portfolio and a very strong distribution network across the country.

    The kind of results which the company came out with for the March quarter was pretty good. After the recent correction, the stock has also started trading pretty attractive at around 23-24 times its FY15 reported EPS, which is quite attractive for a company which is expected to grow tremendously in the coming years. So, I am bullish on the stock and I feel one could buy into the stock at the current levels of 335 rupees and my target in a year's time would be 550 rupees.

    Dish TV Ltd: Target price at Rs 150

    Vikas Sethi: My second bet is clearly a turnaround story. It is Dish TV, which is the leading DTH player in the country. The company came out with its March quarter numbers and they were simply fabulous. The company reported profit of around Rs 35 crores versus around Rs 150 crore loss, and if you look at the full financial year, the company has reported profits for the first time since inception. So, it is a clear turnaround story.

    This company should go places in the coming quarters and years. I think it is just the beginning of their growth story. The stock presents a pretty good opportunity for long-term investors and I feel in a year's time, we could see levels of 150 rupees on the stock.

    Analyst: Ashish Maheshwari, Director, Blue Ocean Strategic Advisors Pvt Ltd

    AVT Natural Product Ltd: Target price at Rs 50

    It is a decent-sized company, and, in fact, if you see, they are world leader in nutraceuticals, which are made from marigold. Financially, they have been growing gradually and they are also in the process of launching new products which will give a good fillip to their topline going forward.

    In my view, a midcap stock with Rs 500 crore market cap, 74% promoter stake, debt-fee company and very well established buyers profile holds a merit in this market. Besides, in the last nine months they reported a PAT of almost Rs 25 crore. The stock has lot of value at these valuations and going forward, I am expecting FY16 will be another good year. The stock is available at less than 10 price-earning multiple with the world leader nutraceutical company and it has almost 35,000 acre land under contract cultivation for marigold. I expect a price of Rs 50 in the next six months in AVT Natural.

    Bhartiya International Limited: Target price at Rs 558

    The midcap company with a market cap of Rs 500 crore is a leader in leather garments exports from India. For almost 10 years, they have been number one in leather garments exports from India and on Monday only, they came out with very good results. Topline grew by almost 30% and PAT has seen a jump of almost 50%.

    I expect the performance will continue for the next two years as well. So, a 30% CAGR in topline and 50% is quite visible in Bhartiya International. Another trigger which is there in the stock is that they hold almost 100 acre plus land in one of their subsidiary, named Bhartiya City Developers, and their sale is quite good in this particular project.

    In this year, they are going to merge their subsidiary with the parent company. So, the valuation of this company is also going to see new highs in this particular area, but on standalone basis, if I just see fashion business, I am expecting EPS of almost Rs 30 in this year in Bhartiya International. The stock is available at almost 15 price-earning multiple. I expect another Rs 100 upside (448+100 = 558) in Bhartiya International in the next six months.

    Analyst: Religare Institutional Research

    Aarti Industries Ltd: Initiate with buy, target price at Rs 515

    The brokerage firm initiates coverage on Aarti Industries with BUY and a March 2016 target price of Rs 515, offering 61% upside. As a diversified specialty chemicals company, Aarti is a play on two key emerging trends: (1) rising demand for specialty chemicals in India (15% CAGR FY15-FY20E) amid rapid urbanisation and (2) eastward migration of global chemical manufacturing. On the back of these trends, Religare expects Aarti to report earnings CAGR of 23% over FY15-FY18 with healthy ROE of 17 per cent.

    (Views and recommendations expressed in this section are the analysts' own and do not represent those of EconomicTimes.com. Please consult your financial advisor before taking any position in the stocks mentioned.)



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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