Top shares to buy today: Here are the top counter picks that an investor can think of, say experts
Market experts are advising about Eicher Motors Limited, SpiceJet Limited, Apollo Hospitals Enterprise and Britannia Industries as their fundamentals are quite strong
On account of FIIs fishing their money out from India and investors looking at the next round of talks between China and the US, the majority of the Asian bourses have been trading range bound or bleeding. Indian indices are not an exception to it. After sustaining above the psychological 11,000 levels the market has been bleeding for the last three successive trading sessions. Hence, equity experts are advising investors to check each and every details of the counter in which they are thinking of taking any position. On the basis of that here are the top picks that market experts are suggesting investors to think of before making any investment decision:
1] Eicher Motors Limited
The margins of the company slipped for second straight quarter by 130bps on a sequential basis due to higher launch cost on 650cc twins, addition of new stores and weaker operating leverage. The demand scenario in the domestic market continues to be challenging due to increased ownership cost and Kerala flood situation (30% market share). The management has also reduced its production guidance to 8.7 lakh units from 9.5 lakh units for FY19. However the 650 twins have a waiting period of 5-6 months against 4-5 weeks for Thunderbird X and Classic 350. The management is constantly increasing its dealer network in order to have strong hold in the domestic market. Experts are expecting that Jawa motorcycles can be a potential threat to Royal Enfield and snatch good chunk of market share as it has already stopped bookings till September 2019 because of strong demand. International business remains a primary focus area as the company is investing consistently on network expansion, promotional and brand building activities in key export markets.
On suggestion for the investors in regard to this counter Naveen Kumar Dubey, Research analyst at Narnolia Financial Advisors informed Zee Business Online in a detailed research report that suggests that the Eicher Motors scrip has a potential for an upside swing of near 10 per cent. "An investor can buy the counter for the target of Rs 22,734/stok." Currently, the stock is oscillating around Rs 20,675/counter levels.
2] SpiceJet Limited
SpiceJet’s (SJ) Q3FY19 revenue trajectory was akin to that of its peers – YoY improvement in yields (by 3.2%) at the cost of PLF (340bps down). Further supporting RASK (up 3% YoY) was the upfront cash incentives booked on inducting aircraft, which is expected to continue, going ahead. However, elevated cost pressure (fuel CASK up around 32%/maintainence cost up 12%) resulted in PAT declining 77% YoY to Rs550mn (SSLe Rs649mn). Delivery of fuel-efficient Max aircraft, which is expected to improve overall operating economics of the aircraft by 8-9%, has commenced – 10 in a fleet of 74. However, it is still early days to gauge the benefits of this, and performance in Q4FY19/Q1FY20 will be key. Return of pricing discipline coupled with cost-reduction measures should drive improvement in profitability.
On suggestion for the investors in regard to this counter Santosh Hiredesai, Analyst at SBICAP Securities informed in a detailed research study that suggests that the counter is poised for an upside of near 36 per cent. "An investor can think of taking a buy position in the scrip for the target of Rs 109/stock." Currently, the stock is oscillating around Rs 80/counter levels.
3] Apollo Hospitals Enterprise
Apollo Hospitals Enterprise EBITDA of Rs 2.7bn, up 21% YoY and 4% QoQ, was ahead of our estimates, given improving profitability in new hospitals and reducing losses in Apollo Health & Lifestyle (AHLL). Further, mature hospitals posted EBITDA growth of 16% YoY and continued margin expansion in the pharmacy business. OPM was up 100bp YoY to 11.1% while PAT was up 25% YoY to Rs 547mn. Standalone revenue was up 17% YoY at Rs 21.7bn, led by healthcare services, up 16% YoY, while standalone pharmacy growth remains strong at 18% YoY. Standalone EBITDA was up 21% YoY to Rs 2.7bn. Net debt increased by Rs 420mn QoQ to Rs 32.6bn.
On suggestion for the market investors in regard to the Apollo Hospitals counter Param Desai, Analyst at Elara Securities informed in a detail research report, "The fundamentals of the counter suggests and upside potential of 35 per cent. An investor can buy the stock for the target of Rs 1,515/stock levels." Currently, the stock is oscillating around Rs 1,122/counter levels.
4] Britannia Industries
Britannia reported Net sales at Rs 28.4bn (3.9% lower than EE), up 10.7% YoY led by volume growth of 7% YoY which was lower than our/street’s expectation of +10% YoY led by slowdown in both urban and rural wholesale channel (30% of sales) post Diwali. Price hike and premiumisation led growth was +1.5% each. Gross margin expanded by 261.5bps YoY/130bps QoQ to 41.3% led by strategic sourcing of wheat & by procuring raw material for bread on behalf of contract manufacturer instead of buying FG. It has maintained a guidance of double digit value growth going forward as they have already seen the revival in wholesale channel in Jan’19. With 3-4% price hike flowing through from 4QFY19 onwards, experts believe BRIT should be able to clock at least 15% sales/ 19% EBITDA growth in FY19-21e period.
On what should be the suggestion for the market investors in regard to Britannia Industries counter Sagarika Mukherjee, Analyst at Elara Securities told, "The counter has a potential of upside swing of near 12 per cent. We recommend investors to accumulate and book profit at around Rs 3,478/stock levels." Currently, the stock is hovering around Rs 3,108/counter levels.