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How to become rich: These 5 stocks can give you big returns - CLSA sees they are set to 'FLY' - Find out
CLSA has listed five stocks on exchanges that are set to fly big. In short, will make you rich in coming months.
A stock that makes you rich, is a stock worth staying invested for! These stocks should be selected in such a way that they can bear every hindrance of the market. However, the market is in heavy volatility currently, with every indices, sector, and company witnessing some price correction. On Monday, the Sensex finished at 36,395.03 down by 151.45 points or 0.41%. Whereas, the Nifty 50 was performing at 10,888.80 lower by 54.80 points or 0.50%. Interestingly, CLSA has highlighted a bunch of stock that has been a performance pig.
CLSA says, "They have typically experienced falling share prices and valuations due to some fundamental concern and are now wallowing around in the mud. But that is not to say their past piggish performance will not reverse." Hence, CLSA has listed five stocks on exchanges, that are the Pigs which will fly ahead. In short, will make you rich in the coming months. They are:
The government has kept FY19 oil subsidy estimate unchanged, but released its FY20 oil subsidy budget of Rs 337 billion or a 62% YoY hike. Even a pessimistic reading assuming no upward revisions indicates that this will ensure a minimum post-subsidy realization of US$55-60/bbl for ONGC/Oil. Bear-case value using US$55/bbl post-subsidy realization implies 41/49% upside as they are pricing in only US$44/47/bbl post-subsidy realization.
Trading at record low valuations on most parameters and among the cheapest E&Ps in the world, we find deep value and reiterate BUYs on ONGC/Oil India. Postponement of oil subsidy payments to FY20 will raise debt and interest costs for IOC/BP/HP and is a slight negative.
CLSA sets a price target of Rs 225 on ONGC.
Coal India offers a sustainable dividend yield of 9%, the 3'd highest among the CLSA's AxJ large-cap coverage. Earnings growth is weak but is constrained by production. The demand outlook remains strong and the stocK offers value at 9x FY20CL earnings with a 70%+ ROE .
CLSA has set a price target of Rs 310 on Coal India.
Bharti's top focus remains to gain share in 4G, backed by network, distribution, bundles and content partnerships. Bharti's 52% Qo 'urn in 4G additions bodes well since upgrades to 4G will drive revenue growth.
CLSA says, "We forecast Bharti's 4G subs to grow from 77m to 146m by FY21; however, with low visibility on tariff hikes, we cut FY20-21CL lndia-mobile revenue by 3-6%, but still forecast 8-20% Cagr in Bharti's consol revenue and Ebitda over FY19-21CL."
Management is also focussed on deleveraging and planned Africa IPO with planned lnfratel stake sale can lower consol debt by 24%. Retain BUY with Rs410 TP (was Rs425).
ACC's operating performance was just in-line, as adjusted EBITDA rose 10% YoY to Rs4bn. Cement volumes were a bit higher, realizations were in-line and cost was also higher due to higher cost of manufacture.
Adjusting unit Ebitda declined 6% QoQ, but rose YoY to Rs538/t. With operating rate already at 86% in CY18, ACC will likely lag the industry in its volume growth in the near term, although 5.9mt capacity adds in the attractive central market should help in the medium term.
CLSA says, “We slightly tweak estimates and retain BUY (TP: Rs1,800).”
ICICI Prudential Life!
For 3QFY19, ICICI Pru Life's value of new business (VNB) declined 9% YoY (below expectations) due to weak premium growth (annualised) and lower margins. Slower premium growth reflects weak capital market sentiment (given a high share of Ulips) and ICICI Bank's shift away from PAR products. Its persistency ratio (13m) was down 110bps (8MFY19 versus SMFY19) and will need to be watched for margin trends. The key positive was the strong growth of its high-margin protection business.
CLSA says, “ We lower our VNB forecast for FY20-21CL which also drives a target price cut, from Rs450 to Rs430. Its valuation is at a 40% discount to HDFC Life and we maintain our BUY rating.”
Thereby, if you plan to invest in equities, then you might want to have a look at above-mentioned stocks.
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