Shares to buy today: Here are the top five stocks that investors can think of, say experts
Market experts say Somany Ceramics, Voltas, Sadbhav Engineering, Ashok Leyland and PNC Infratech Ltd. are the counters that investors can bet upon today
After a fortnight of blood bath at the Dalal Street, Indian indices are expecting a bull run on strong global cues, especially after the global stocks climbing to two and a half month high and Asian stock hovering around its four-month high. However, market experts are suggesting traders not to get carried away in such a situation. They are suggesting investors go through each and every detail of the counter before making any investment decision. Here are the five stocks that experts are suggesting investors think of before making any investment decision:
1] Somany Ceramics
Consolidated net sales of the company increased by 7% YoY and 8.8% QoQ to Rs 4.2bn due to higher volume. EBITDA margin improved 150bp QoQ to 8.1%, due to improvement in realization. Adjusted PAT stood at Rs 88mn, posting a QoQ increase of 93%. Realization for the quarter improved 2.2% QoQ to Rs 332 per sqm. Cost per sqm increased by 2.7% YoY and 0.5% QoQ, due to higher gas prices. EBITDA per sqm rose by 26% QoQ to Rs 27 sqm.
On suggestion to the investors in regard to the Somany Ceramics counter Ravi Sodah, Analyst at Elara Securities told, "The fundamentals of the counter suggests an upside ptential for near 51 per cent. An investor can take a buy position in the scrip for the target of Rs 477/stock levels." currently, the scrip is oscillating around Rs 315/counter levels.
Voltas reported a weak quarter led by muted off-season RAC performance. Net Revenues grew by 9% driven by healthy execution in the project biz (up 16% against expectations of 22%). Weak RAC sales (-3% against expectations of 5%) was owing to high channel inventory, modest festive season offtake and heavy base (32% in 3QFY18; rating change led pre-buying). UCP EBIT margin (-450bps YoY; agaisnt expected -400bps) decline and higher than expected Volt-Beko JV loss (around Rs 330mn agaisnt expectations of Rs 50mn) led to EBITDA/APAT growth of 1/-10% (agaisnt expectations of 10/7%).
On suggestion to the investors in regard to the voltas counter Naveen Trivedi, Analyst, HDFC Securities told, "Fundamentals of the counter suggests an upside potential of nera 24 pere cent. An investor can buy the scrip for the target of Rs 650/stock levels." Currently, the stock is oscillating around Rs 522/counter levels.
3] Sadbhav Engineering
Sadbhav Engineering 3QFY19 performance was in line with our expectations. Against guided commencement of execution on four road projects in 3Q, the company received approval for two in quarter-end, one in January while other pushed to FY20. Among four road projects guided to commence in 4Q, three were pushed to FY20 and one is expected in short term. Due to delays, management revised FY19 guidance to Rs 38bn from Rs 40bn, which implies an ask rate for 4Q of Rs 12.7bn, which we believe is ambitious. EBITDA margin is likely to be retained at 12%. The tax rate was high at 20%, due to lower contribution from projects where 80IA benefits are available.
On suggestion to the investors in regard to the counter Ankita Shah, Analyst at Elara Securities told, "Fundamentals of the counter suggests an upside potential of nera 47 pere cent. An investor can buy the scrip for the target of Rs 241/stock levels." Currently, the stock is oscillating around Rs 164/counter levels.
4] Ashok Leyland
Ashok Leyland EBITDA declined 23% YoY at Rs 6.5bn, 16% above our estimates while EBITDA margin contracted 140bp YoY at 10.3%, 140bp above our estimates of 8.9%, led by gross margin beat. The RM-sales ratio fell 220bp QoQ at 70.1%, lower than estimates of 72%. Revenue dipped 12% YoY at Rs 63.3bn, in line with our estimates, owing to a 6% YoY decline in volume and a 6% drop in net realization. Adj PAT fell 21% YoY at Rs 3.9bn, 27% above our estimates, led by tax benefit of Rs 840mn due to LCV business merger with Ashok Leyland. The LCV business remains profitable as evidenced by restated financials.
On suggestion to the investors in regard to the counter Jay Kale, CFA at Elara Securities told, "Fundamentals of the counter suggests an upside potential of nera 41 pere cent. An investor can buy the scrip for the target of Rs 113/stock levels." Currently, the stock is oscillating around Rs 80/counter levels.
5] PNC Infratech Limited
PNCINFRA reported 54% YoY growth in revenue mainly driven by execution of HAM projects. However, bottom line was down by 50% YoY on account of higher tax rate as the revenue from 80 IA benefited projects gets over. Appointment date of 3 HAM projects and 1 EPC project is delayed due to some projects specific issue though the land on these projects is excess of 80% and management expect appointment date by the year end. Current equity requirement is Rs.600 Cr over next 2-3 years and company is investing heavily on equipment (Rs 250 Cr in FY19 and Rs 150 Cr in FY20). Additionally company is also looking to diversify its business into Airport development and that will require additional capital.
On suggestion to the investors in regard to the counter Sandip Jabuani, Research Analyst at Narnoklia Financial Advisors told, "Fundamentals of the counter suggests an upside potential of nera 12 pere cent. An investor can buy the scrip for the target of Rs 154/stock levels." Currently, the stock is oscillating around Rs 137/counter levels.