Nifty seen at 12,500 by FY18-end; 6 stocks that could turn out to be multibaggers in 2-3 years

Indian markets currently in pre-Budget rally might see a small correction which we believe would be a buying opportunity.

    

Our best multi baggers for 2-3 year perspective are:

MOIL (CMP Rs 255)

Strong demand uptick due to higher domestic steel production, higher realization with rate revision effective 1-Jan, possible avenues of demand from disruption in automotive segment with EV drive are some of the factors that provide us conviction for MOIL in spite of it being a ~USD 1bn company with majority owned by government. Moil has maintained healthy return ratios, strong profitability, lean balance sheet and completed its mine expansion. All this makes MOIL our preferred pick.

Ganesha Ecosphere (CMP Rs 435)

Ganesha Ecosphere is uniquely positioned to benefit from increasing PET demand in country and focus on environment as it converts PET bottles/waste into yarn/fibre. Ganesha Ecosphere has completed its capacity expansion and will benefit from volume growth FY19 onwards. The realizations for its product will also increase as polyester prices are closely linked to that of oil. Additionally Ganesha enjoys strong sourcing network and unbeatable track record.

Rajoo Engineers (CMP Rs 50)

Rajoo Engineers supplies machinery for packaging products and is bound to gain with strong consumption demand and uptick in FMCG sales. Currently trading at higher multiples wrt trailing multiples we confident strong sales and higher profitability due to positioning in industry. Rajoo has maintained strong return ratios and will continue to do so.

Greaves Cotton (CMP Rs 147)

Greaves Cotton has tied up with Piaggo to supply BS VI diesel and alternative fuel engines. Policy embargo on CV's and environmental concerns from NGT make us confident on prospects of company. Greaves Cotton drive significant portion of its revenue from agri-equipment and construction equipment. This makes Company uniquely positioned to gain from all quarters of government policies. Strong return ratios make us confident on management's capabilities to deliver.

Flex Foods (CMP Rs 136)

Flex Foods is an associate company of Uflex and a leader in flexible packaging technology. Flex Foods cultivates and processes food products and supplies vacuum freeze dried, air-dried, frozen and an individually quick frozen (IQF) product range. It sources its raw materials through contract farming through a dedicated network of 500 farmers. Strong pedigree, good product range and low forward earning multiples make us confident of better outlook for stock.

Hindustan Oil Exploration (CMP Rs 139)

First O&G company in private sector with professional board, debt free balance sheet and proven development/operating experience puts this company in sweet spot with rising crude prices and gas demand in India. Company is planning to ramp up production capacity, raise capital for inorganic growth and acquire additional acreage. Open Acreage Licensing Program & Discovered Small Field (DSF) bid round 2 announced by the Government present excellent opportunities to grow the portfolio.

MORE WILL UPDATE SOON!!