Sensex rise over 900 pts, Nifty above 250 pts - Experts tell which stocks you should bet on Monday
Which stocks to invest in an already booming exchanges, needs insight and key analysis.
Monday’s trading session turned fruitful, as investors continued with buying sentiments on Dalal Street. The benchmark Sensex surged by a massive 967 points after touching an intraday high of 38,892.89. However, at around 1006 hours, the Sensex was trading at 38,813.86 above 883.09 points or 2.33%. Buyings in major large caps like SBI, L&T, Tata Steel, Maruti Suzuki, ICICI Bank, M&M, IndusInd Bank, Yes Bank, Tata Motors, Reliance Industries, Vedanta and HDFC were among reasons to uproar in Sensex. Meanwhile, Nifty 50 rose over 250 points, as it was trading at 11,665.55 up 258.40 points 2.27%. A lot is going to happen this week, with major attention on Lok Sabha election result on Thursday.
Talking about Monday’s trading session, Sameer Kalra, Equity Research Analysts & Founder of Target Investing said, “US market Future Indices and Asia Indices are positive as Automotive tariff are to be delayed by 6 month.The oil prices are at $73.34/bbl(1.39%) as the JMMC decided that June will be key for the decision and mostly it will be rollover of cuts. USDINR at 69.34(-1.43%) as EXIT POLLS show comfortable majority government to return which helps maintain the policy decision. We expect markets to be Neutral to Positive as EXIT POLLS show comfortable win for current government.”
Here’s what where you should invest and sell:
Aditya Makharia and Mansi Lall analysts at HDFC Securities said, “We re-iterate BUY as (1) Bajaj’s market share is back to 25% in motorbikes (earlier seen in CY16) (2) They will launch new variants– particularly in the executive segment to increase share in the domestic segment (3) The margins are stabilizing at current levels.”
The duo added, “ We expect Bajaj to grow ahead of the market in FY20 as well driven by new launches across its product range. Our revised TP is Rs 3,330 (based on its long term ten year average PE multiple of 17.5x on FY21E earnings). While the two wheeler industry growth has been benign, Bajaj has expanded market share by recalibrating its strategy. Further, the company has a diversified product portfolio with three wheelers and exports accounting for ~50% of volumes. Re-iterate BUY.”
Amey Chalke and Eshan Desai analysts at HDFC Securities said, “Easing of raw material price hikes, higher capacity utilization (Unit-3) and scale up in high margin segments (Niche API, CMS) will enable robust revenue growth (~13%) and sharp margin recovery over FY19-21E. The US Salmeterol market is also gaining traction and we believe Neuland is well placed to benefit from this opportunity, which will reflect in improved operating performance over the next two years. Additionally, another potential blockbuster, Austedo, is expected to ramp up by FY21E. We maintain our positive stance on the company owing to a high visibility on growth and attractive valuations of 21/10x FY20/21E P/E at CMP.”
Hence, the duo said, “We maintain BUY on NLL following a beat on our estimates. Our TP is revised to Rs 920/sh (14x FY21E EPS). Hopes are hinged on ramp up in critical products like Austedo and Salmeterol.”
Jubilant Life Sciences:
Analysts at HDFC Securities on Jubilant said, “Despite facing regulatory issues with the generic business, JUBILANT to report at least 10% revenue growth in our view, aided by increasing traction in specialty segments and LSI business. However, margin expansion at 150bps (FY19-21E) is likely to be slower than anticipated earlier due to persistent cost pressures in LSI and inferior business mix. Still, with the help of reduced debt (by US$ 135mn), we expect EPS to deliver 19% CAGR over FY19- 21E. With a 30% fall in stock price over the last 2 months owing to regulatory issues, the valuations have become really attractive at 10/8x FY20/21E P/E. Maintain BUY.”
Target price is revised at Rs 915/sh (12x FY21E EPS) following a 9% cut in FY21E EPS due to inferior biz mix.
Piyush Nahar, Equity Analysts at Jefferies said, “Remain positive, as we expect a recovery in business, better specialty traction and supportive valuations. The survey provides us confidence in our Ilumya revenue estimates. SUNP has been under pressure on corporate governance concerns. While mgmt. has taken steps to address investor concerns, the overhang could continue in near term. With the stock trading at 16x adj FY21 PE, a 15%+ discount to peers, risk/reward looks favorable. It remains our preferred large cap pick; revise PT to Rs540 (from Rs535).”
Aditya Birla Fashion:
Kshitij Kaji and Praveen Sahay, Research Analysts at Edelweiss Broking said, “After 5 quarters of good results, ABFRL has reported a poor quarter. Revenues grew 9% to INR 1915 Cr and were broadly in line with estimates. However EBITDA witnessed a big disappoinment at INR 125 Cr vs. estimates of ~INR 170 Cr, primarily driven by a poor performance from Pantaloons. This quarter also marked heavy ad spend increase of INR 47 Cr over ad spends of Q4FY18. Higher losses in innerwear also affected margins. The company has stated that they will continue investing in brands in FY20E which will once again relate in higher ad spends (5% of sales vs. 4% earlier) and similar losses in the innerwear segment as they want to expand aggresively. While, we do believe these strategies are great for the long term, we trim our EBITDA estimate of FY20E by ~12% and FY21E by 6%. We continue to feel that ABFRL’s sheer brand strength alongwith a prudent long term strategy render it a multi-bagger. We maintain BUY and increase our TP to INR 301 as we roll over to FY21E (INR 248 earlier). “
Shriram Transport Finance:
Raj Jha, Research Analysts at Edelweiss said, “We estimate SHTF’s AUM to grow at ~16% over FY19-21E on back of pickup in investment activity post elections, expectations of a normal monsoon spurring rural demand, BSVI pre-buying which is likely to boost price up by 15-20% increasing ticket sizes for pre-owned vehicles as well. We project RoA & RoE to improve to 2.6% & 17%, respectively, over FY18-21 on account of stable overall cost. At CMP, the stock is trading at 1.2x FY21E ABV and 7x FY21E EPS. Based on residual earning model, we arrive at target price of INR 1,372, implying 33% upside.”
Indiabulls Real Estate:
Kalra of Target Investing said, “Company has proposed to merge the land parcels with the company via amalgamation of Indiabulls land & property ltd. which makes way for higher valuation for sale to achieve banking approval. We would be positive for intraday trade.”
A target price ranging from Rs 111 to Rs 123 is set on Indiabulls.
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