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Stocks to invest: Samvat 2077 has been a great year for the stock market investors. In this, ease of liquidity, better economic recovery and increase in corporate profits helped investors. But this is accompanied by challenges at the macro level in the near term, such as rising energy and commodity prices and a limited margin of safety on the valuation front. Broking company Sharekhan has maintained its positive sentiment on the equity market and believes that any corrective phase will be good for the market and should be used for quality companies. He has given the names of 15 such stocks for the coming Samvat 2078, in which one can invest.
APL Apollo Tubes
A strong growth outlook, high RoE of 30 per cent, strong balance sheet and superior model make APL Apollo Tubes the best. Key risks include lower demand from construction and infrastructure projects and rising steel prices, which could hurt earnings outlook.
Balrampur Chini Mills
The company will be one of the main beneficiaries of the shrinking capacity in the sugar industry. Higher contribution from distillers will help improve margins. The company’s return ratio is expected to improve to over 20 per cent by FY2024.
The sales and PAT (Profit After Tax) of Divis Laboratories is expected to give 24 per cent and 30 per cent CAGR during the financial years 2021 to 2023. Coming to the risks, forex movement can have some negative impact on earnings growth.
Some business momentum is expected to increase in the Retail, CV and Personal Loan segments. Similarly in the corporate loan segment, the bank is targeting companies with better ratings. Valuations are attractive.
ISGEC Heavy Engineering
Recently the booking of orders has increased, due to which the revenue is expected to be better. The order intake outlook is positive, helped by the government’s emphasis on infrastructure and revival of private capex. Lower order book has seen a drop in revenue, which can be a risk.
The company’s core cigarette sales are expected to grow by 12 to 13 per cent in FY22. With the improvement in mobility and no increase in tax on cigarettes, the sale of cigarettes is expected to grow at a good pace. This will increase the capacity of cash generation.
Larsen & Toubro
Management expects a recovery in the domestic market, with a focus on both revenue and order inflow. Despite the second wave of Corona, the order prospects are at 8.96 lakh crores, which is a good position.
LIC Housing Finance
The company is expected to benefit from better home loan disbursement, with greater demand for larger space and being more affordable. Apart from this, more benefits will be available with better ECL coverage.
Margins are expected to increase by 715 basis points due to improvement in rubber chemical prices and increase in capacity.
Demand is expected to pick up and strong revenue growth. It is expected to increase its screen in the coming days. This will lead to good growth in revenue.
Effective working capital management and better profits will help the company generate more free cash flow in the coming years. More cash will help develop premium brands, without any huge capex on the books.
State Bank Of India
State Bank of India (SBI) is in a better position in terms of asset quality, capitalization. It also expects an improvement in asset quality from the second half of FY 2022.
The company’s growth is expected to remain strong in the coming years. Because it will focus on high growth sectors and emerging technology areas.
Tata Motors DVR
The earnings and growth of the company is expected to be good.
With the opening of malls, better mobility and the introduction of new products, business will improve.