Stocks to Buy Today: In chat with Anil Singhvi, Sandeep Jain picks India Nippon; know why?
In yet another edition of popular TV show ‘Jain Sahab ke Gems’, Market analyst Sandeep Jain today picked a stock from the auto ancillary sector. In a chat with Managing Editor Anil Singhvi, he said that this stock has been an underperformer for a long time, and it has till now not participated in the market rallies. But, things are about to turn around for this stock
In yet another edition of popular TV show ‘Jain Sahab ke Gems’, Market analyst Sandeep Jain today picked a stock from the auto ancillary sector. In a chat with Managing Editor Anil Singhvi, he said that this stock has been an underperformer for a long time, and it has till now not participated in the market rallies. But, things are about to turn around for this stock.
Top Stocks To Buy: India Nippon Electricals
Jain picked India Nippon Electricals – a joint venture company between Lucas Indian Service Limited, a wholly-owned subsidiary of Lucas-TVS Limited and MAHLE Electric Drives Japan Corporation. It has been in operations since 1986. It is an auto ancillary company which caters to the two-wheeler segment. He said that the auto ancillary sector stocks have been on the go in the recent times. They have been the biggest underperformers and have not participated in the otherwise buoyant market rallies. However, he revealed that there will likely be good traction in the days to come.
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He was optimistic about the demand for two-wheelers, which he said would rise because of the people’s need to ensure social distancing amid the coronavirus pandemic.
India Nippon stocks are available at attractive valuations – at a PE multiple of 13. It is a zero debt company and an MNC on top of that. The dividend yield is at 2 per cent and the Return on Capital is 21 per cent. On a careful analysis of this company over the last 10-12 years, the last three years proved to be golden years, he said.
Its annual Profit After Tax (PAT) has been in the range of Rs 50-60 years. The market capitalisation of this company is between Rs 700-725 cr. The profits have grown at a CAGR of 29 per cent over the last three years while the sales have grown at a CAGR of 16 per cent, he said.
With these strong fundamentals, it is a good buy for investors, he said. He advises investors to keep a view of 6-9 months on this stock. This stock is currently trading around Rs 379. He puts the target price between Rs 430-450.
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Earlier, this stock was also recommended by the Market Guru himself in his popular show ‘Malamaal Weekly’.
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