As India faces South Africa, meet 3 stocks like Virat Kohli, MS Dhoni, Hardik Pandya that form D-Street's middle order
The game of cricket can also be witnessed on Dalal Street. In fact, similarities between these two are that, they both have massive crowd, one losses other wins.
Finally the wait was over when men in blue entered The Rose Bowl at Southampton, to compete against South Africa, in their opening game of the 2019 ODI World Cup. Opting to bat first, the proteas found themselves in trouble with Jasprit Bumrah picking up two early wickets. While the Indian bowlers are entertaining the crowd, soon the onus will be on the batsmen to chase down South Africa's total, especially the middle-order. The Dalal Street is somewhat similar to cricket. In stock market, while one stock rises, other stock declines while millions of investors are trading in 1 day.
With that, why not channelize cricket-kind of enthusiasm in equities as well. Ayon Mukhopadhyay, analyst at IIFL Securities, in research note, listed out three stocks which are like middle orders of Indian cricket team on benchmark indices Sensex and Nifty.
Currently, Team India's middle-order is one of the most formidable ones in the world with players like captain Virat Kohli, former captain MS Dhoni and swashbuckling all-rounder Hardik Pandya. The trio will be assisted by KL Rahul and Kedar Jadhav. Each player is skilled in his own-way.
Mukhopadhyay while explaining the middle order of D-Street, said, “This comprises players who could augment a good start and become high earners in a cyclical upturn. And, if the macros peg down the openers, these players would give stability and consolidation to build momentum and provide a late acceleration when fundamentals improve in the slog overs.”
Here’s a list of three stocks which can be best bet on D-Street, as per Mukhopadhyay.
HDFC Bank (HDFCB):
Coming in at number three, this is the rock and spine of the team. Though, of late, a slowdown in retail loans is being viewed as a chink in its armour, HDFCB’s strong operating efficiency and low cost of funds places it in the best position to navigate any bouncers. With its very strong distribution network and brand, it would also ensure consistent deposit mobilisation, allowing it to be the sheet anchor. As it is ensconced in an excellent competitive position, the law of averages on valuations will not catch up and its stupendous record will only compound.
“ We expect it to notch a hundred billion in USD market cap shortly, and emerge as the strongest contender for being the first Indian company to hit the double century mark in the next 4-5 years,” says Mukhopadhyay.
Gujarat Gas (GGAS):
Having been confined to long hours in the nets, building up retailing licenses and CNG capabilities at the cost of missing out on the T20-style frenzy, this mid-cap tacit performer has suddenly rocketed into the reckoning.
On the back of strong operating and execution credentials, GGAS is well poised to double its volumes (to ~13mmscmd) by FY23/24ii. Robust RoE, strong balance sheet and a massive growth opportunity make the GGAS stock a compelling middle order pick.
Deepak Nitrite (DN):
Having doubled its aggregate (EPS) last year, Deepak Nitrite is in amazing form to showcase another sturdy year. Key drivers to utilise the long handle for the final hurrah are a smooth ramp-up in capacity utilisation in phenol and strong growth in the standalone business.
While, Mukhopadhyay believes RoCE and RoE should also significantly improve, to the high 20s, making it our ‘X factor’ player in the line-up. It is still very cheap (12x P/E) and hence, the risk reward is reasonable to merit its inclusion.
On Wednesday, markets are closed due to EID. Hence, when markets open tomorrow, let the awesomeness of cricket also be reflected in your stock investment