Big brokerages bet on these 10 wealth creating ideas for 20-50% return in a year

One does not need 100 stocks to generate wealth but can achieve the same with a handful of stocks. Legendary investor Warren Buffett once said, “Wide diversification is only required when investors do not understand what they are doing." Hence, investor focus should be on a handful of stocks rather than creating a portfolio which consist of over 50 stocks.

Wealth creation requires patience and research. Returns from the markets are never linear. Hence, portfolio diversification is a must to ensure profitability. Not every stock will emerge a multi-bagger, but chances are that if you placed your bets on the right stocks you will be a happy investor at the end of the year.

With India’s macroeconomic cues slipping, earnings nowhere near the double-digit mark and looming uncertainty around the 2019 general elections, it will not be easy for investors to make money. The best strategy would be to bet on stocks that have declared strong January-March earnings and growth momentum.

Bulk of the market returns in 2017 was largely led by expansion in the price-to-earnings ratio. However, experts said they are seeing signs of a revival in earnings growth, with growth expected to pick up meaningfully in FY19.

The long-term story for equities still remains intact, especially for those investing in a systematic manner. Going forward, market returns will be led by earnings growth rather than P/E expansion,” Sampath Reddy, Chief Investment Officer at Bajaj Allianz Life Insurance, said.

He is positive on consumption, private financials, IT and metals sectors. “We prefer largecap equities to small/midcap ones, with current valuations at a significant premium in the latter segment.”

Here is a list of 10 buy ideas from different brokerages that can deliver 20-50 percent returns in the next one year:

Mahindra & Mahindra: Buy | Target raised to Rs 1,075 from Rs 960 earlier | LTP: Rs 895.60 | Return: 20%

CLSA maintains a buy rating on M&M post Q4 results but raised its 12-month target price to Rs 1,075 from Rs 960 earlier.

Domestic vehicle manufacturer Mahindra and Mahindra reported a 50 percent year-on-year rise in its net profit for the March quarter to Rs 1,155 crore on Tuesday.

M&M delivered a strong Q4 led by better-than-expected margins. The rural outlook improved on expectations of a normal monsoon and expectations of a big MSP hike.

New MPV launch in FY19 is likely to boost SUV segment volume. CLSA expects strong 18 percent EPS CAGR over next two years, and valuations still remain attractive.

Dish TV: Buy | Target: Rs 100 | LTP: Rs 74.45 | Return: 34%

CLSA maintains a buy rating on Dish TV with a target price of Rs 100. The direct-to-home operator reported a consolidated net profit at Rs 118.21 crore for the fourth quarter ended March 2018.

The company had posted a net loss of Rs 29.49 crore during the January-March quarter a year ago, Dish TV said in a BSE filing.

The management reiterated merger synergy of Rs 500 crore in FY19. CLSA sees 10 percent EBITDA CAGR over FY19-21. The ongoing open offer caps downside risk for the stocks, said the note.

Commenting on the outlook, Dish TV said that it expects the year to be positive as the company expects to outgrow the industry growth rate backed by the launch of new set-top-boxes that would be full HD compliant.

Prestige Estates: Outperform | Target: Rs 396 | LTP: Rs 260.95 | Return: 51%

Macquarie maintains an outperform rating on Prestige Estates with a 12-month target price of Rs 396. The realty firm reported 21 percent increase in its consolidated net profit at Rs 107.1 crore for the fourth quarter of last fiscal on higher sales. Its net profit stood at Rs 88.1 crore in the year-ago period.

The Q4 net profit was in-line with estimates. The pre-sales pick-up aided by new launches said the Macquarie note. The real estate major targets to launch at least one project in affordable housing.

Prestige Estates remains one of the preferred picks in real estate space, said the note.

Escorts: Buy | Target: Rs 1,150 | LTP: Rs 933.80 | Return: 23%

HSBC maintains a buy rating on Escorts post Q4 results with a 12-month target price of Rs 1,150. The growth momentum remains intact. Going forward, the margins are likely to improve across all businesses. Increasing captive financing is a key positive for future performance, said the note.

Bharat Petroleum Corporation: Buy | Target: Rs 568 | LTP: Rs 400.30 | Return: 42%

Motilal Oswal maintains a buy rating on BPCL post Q4 results with a 12-month target price of Rs 568. The EBITDA was above estimates led by core operating performance. The net profit benefitted by higher other income and lower tax rate.

Stabilisation of Kochi expansion is likely to expand Kochi refinery GRMs. Sharp correction seen in the oil & gas space due to rise in crude oil prices offers an attractive opportunity to add.

Larsen & Toubro: Buy | Target: Rs 1,730 | LTP: Rs 1365.20 | Return: 27%

CLSA maintains a buy rating on L&T post Q4 results with a target price of Rs 1,730. The Q4 results were a beat on guidance as well as on inflow and margins. The Hydrocarbon business is going to be the emerging star and fast-growing business going forward.

L&T has a credible strategy to improve both growth and its return on equity. The stock is a good proxy for domestic capex.

NTPC: Buy | Target: Rs 200 | LTP: Rs 165.30 | Return: 21%

CLSA maintains a buy rating on NTPC post Q4 results with a target price of Rs 200. The March quarter results were in line with estimates, but profit figure remains muted by higher cost.

Capacity additions are clearly on track. CLSA expects a marked pick-up in profit growth due to focused efforts to secure coal.

Capacite Infraprojects: Buy | Target: Rs 340 | LTP: Rs 282.80 | Return: 20%

Angel Broking initiates a buy call on Capacite Infraprojects with a target price of Rs 340. The company has a large order book with marquee client base which provides revenue visibility.

The company has a focused approach which leads to a strengthening of its position. Increased floor space ratio (FSI) to trigger construction work in Mumbai region. Expanding presence in cities with a high growth potential given revenue visibility.

Tech Mahindra: Buy | Target: Rs 880 | LTP: Rs 686.40 | Return: 28%

Goldman Sachs maintains a buy rating on Tech Mahindra post Q4 results but raised its 12-month target price to Rs 880 from Rs 824 earlier.

The Q4 results were above expectations on continued margin beat. The entire topline growth was led by enterprise business in Q4. Going forward, 5G remains a key structural growth opportunity for Tech Mahindra, said the report.

Bank of Baroda: Buy | Target: Rs 180 | LTP: Rs 138.70 | Return: 30%

Edelweiss maintains a buy rating of Bank of Baroda post Q4 results with a target price of Rs 180. The public sector lender posted a net loss of Rs 3,102.34 crore in the March quarter, missing estimates due to a jump in provisions for bad loans.

Provisions for non-performing assets for the quarter rose by 190 percent YoY to Rs 7,052.53 crore in Q4. The March quarter was marred by higher slippages, said the Edelweiss note.

However, the loan growth remains strong with better rated corporate and retail segments. The brokerage firm expects quality growth to gain traction in near future.

MORE WILL UPDATE SOON!!

Bears likely to take control of Nifty on breach of 10,417; Hero, RIL, HCL Tech top buys

The best case scenario for June still remains sideways to negative based on long-term trend projections, and a breach of recent lows of 10,417 may extend the correction up to 10,320.

  

 On the weekly and monthly charts, Nifty made an indecisive pattern ‘Spinning Top’ was witnessed on the weekly charts whereas on the monthly charts it registered a Doji kind of formation. April was a strong month whereas in May we haven’t made any progress.

Going forward, our best case scenario for June still remains sideways to negative based on our long-term trend projections. As we have been pointing out that we are in a multi-month corrective phase from the highs of 11,171, it seems that the pullback rally from the lows of 9,951 culminated at recent highs of 10,929.

We are presuming that inside this consolidation phase, Nifty50 may evolve itself into a triangular formation with lower tops but with higher bottoms.

According to the Elliot wave parlance, the triangular structure will unfold in 5 legs and it seems that second leg culminated at the recent high of 10,929.

If our reading is right then going forward we should breach recent lows of 10,417 and may extend the correction up to 10,320 to culminate the third leg. This may take a couple of weeks and hence the month of June may remain sideways to negative.

This view will be negated if Nifty 50 manages a close above 10,929 levels as we adjust our charts to the next best alternative scenario available with us which is new highs.

Rollover figures for this month are relatively less which may point towards caution but as explained above Nifty may trade in a range.

In the case of 10,929 is decisively breached on the upside, we can expect new highs by the end of June/ July but that is not our preferred view as of now.

Besides, next week we have a monetary policy event which may keep markets volatile. Trading for the next week is going to be lacklustre.

Investors will be better off taking a cautious stance as this time it looks inevitable for the Reserve Bank of India (RBI) to go for a rate hike.

See, purely based on technicals, this index is surprisingly looking stronger when compared to Nifty50. We are very bullish on its outlook. It seems like the index is going to hit new life-time highs very soon. We have bigger targets on this index close to 30,000 by the end of FY19.

Undoubtedly it is something to worry about. Now, it is clear that a section of this bull market appears to be in a bear market of its own as certain stocks are consistently making new 52-week lows and some even trading at life-time lows.

This is the reason why we are continuously seeing negative advance-decline ratio which is something to bother about.

 Chart patterns on mid and small cap indices are almost similar and bearishly poised. The Midcap 100 index corrected 16 percent from its life-time high of 21,840 whereas the Smallcap 100 is down by 21 percent from its lifetime high of 9,656.

In April, indices witnessed a pullback rally, but resumed their down move after that and are now exactly staring at March lows which are equivalent to 9,950 on the Nifty50.

Interestingly, in May both these indices almost tested March lows but managed to attract some buying interest which resulted in a bounced back.

But, after that, they failed to hold on to these gains and are again staring at those lows. A breach of which may create panic selling among these scrips.

Hence, retail guys are advised to stay away from them as they get tempted to buy by seeing value erosion of 30-40-50 percent from their respective tops.

Technically, correction can be sharp in these scrips if these indices breach and settle below their respective March lows. If at all buying has to be done from this space one need to be very selective and understand not only present fundamentals but also future growth prospects.

A: Here is a list of top three stocks which could give up to 3-10 percent return:

Hero MotoCorp: Buy| Target: Rs 3,749| Stop loss: Rs 3,500| LTP: Rs 3,623.75| Return 3%

After retracing 50 percent of its rally from the recent lows of Rs 3,445 this counter appears to have resumed its up move after hitting a low of Rs 3,528.

The momentum in this counter shall pick up once it manages a close above Rs 3,624 paving way for a swift up move towards Rs 3,700 levels.

Hence, positional traders are advised to buy into this counter for a target of Rs 3,749. A stoploss suggested for the trade is below Rs 3,500.

Reliance Industries: Buy| Target: Rs 970| Stop loss: Rs 900| LTP: Rs 929.20| Return 5%

Albeit this counter has underperformed in the recent past, it appears to have formed a decent base around Rs 900 levels from the cushion of which it is bounced back.

On resumption of the up move, it can make an attempt to test the gap down area of Rs 974 – 976 registered on 16th of May. Hence, positional traders are advised to buy into this counter for a target of Rs 970 and a stop loss below Rs 900.

HCL Technologies: Buy| Target: Rs 997| Stop loss: Rs 885| LTP: 906.40| Return 10%

This counter appears to be in a consolidation mode, around Rs 900 levels after the recent correction from the highs of Rs 1,108 registered in April.

As bottom appears to be in place around Rs 887 sooner than later it should resume its up move as the entire sector is looking positive. A minimum target of Rs 997 is possible, which is 50 percent retracement of its entire fall from the top of Rs 1,108 to Rs 887.

As risk-reward ratios are favorable, positional traders should make use of this opportunity to go long on the stock with a stop below Rs 885 for an initial target of Rs 997.

MORE WILL UPDATE SOON!!

FIIs create fresh shorts over $117 mn in index futures segment ahead of RBI meet

10,600 strikes saw highest incremental option addition in the last 15 sessions along with 10,500 Put strike indicating limited downsides from current levels.

The Nifty staged a strong recovery in the May expiry week on the back of closure of short positions particularly backed by the banking heavyweights.

The ongoing trend of selective participation by few heavyweights continued while market breadth remained negative in four of the last five sessions.

The volatility has so far remained subdued in the recent period despite intermediate declines seen in the previous weeks which indicates towards increasing buying interest at lower levels that can lead to more consolidation in the June series.

Looking at the option concentration for the June series, the major Put base is placed at 10,200 strike due to Leap options.

However, 10,600 strikes saw highest incremental option addition in the last 15 sessions along with 10,500 Put strike indicating limited downsides from current levels.

At the same time, no immediate major Call option base has still been formed till now. The highest Call base is still placed at 11000 strikes.

The Nifty futures open interest at inception was marginally lower compared to the last series amid continued subdued roll spread. At the same time, Bank Nifty open interest stayed on the higher side.

Current open interest in the Bank Nifty is the highest seen at the time of inception in the last one year. Fresh highs in the banking index can be seen if Bank Nifty is able to sustain above 27,000.

Among stocks, cement and technology saw relatively low rollover while FMCG and banking saw high rollover of positions indicating the ongoing positive bias in these stocks will continue.

  

Bank Nifty: Short covering trend may magnify

The index ended the May series on an optimistic note with aggressive short covering seen on the May series F&O expiry day where the index witnessed a sharp up move and closed well above 27,000 levels.

Private sector banks were the leaders where Kotak Mahindra Bank and HDFC Bank rose nearly 4 percent each along with the participation from the PSU pack.

The Bank Nifty started the June series with the highest number of shares in open interest compared to the past few months whereas the discount in the index has widened indicating rollover of short positions.

Unless we see the aggressive closure of these short positions, the upside in the index is likely to continue as short traders will look to exit in the fall.

As the index moved above 26,500, Call writers shifted their positions to 27,000 and 27,200 strikes whereas Put positions have also shifted higher to 26,500 and 26,600 strikes indicating major supports.

Volatility is likely to be higher, ahead of the RBI’s monetary policy that is lined up next week. In the absence of any negativity, the index is well placed to move towards 27,200.

The current price ratio of Bank Nifty/Nifty has moved to 2.49 from 2.45 levels. We feel the current leg of outperformance is likely to continue on the back of the short covering trend in private sector banks.

EM equities continue to trade near support zone

The weakness continued in emerging market (EM) equities as select EM currencies like Mexican Peso, Brazilian Real, Argentine Peso & South African rand continued to trade weak (propelled by sticky dollar index reading of 94).

The risk environment continued to remain fluid as the decline in EM equity and bond continued. The MSCI EM Index fell over 1.5 percent during the week but this weakness was also seen in MSCI World Index, which also declined by a similar magnitude.

Italy’s fractured mandate that gave anti-EU parties a chance to form the government was the key reason for the decline. US trade spat with China, Europe and Nafta further elevated the worries.

Till now, FII outflows have continued from most EMs. Outflows were seen from Taiwan ($592 million) Thailand ($472 million), Malaysia ($262 million), & Brazil ($210 million) while Korea was the outlier seeing inflows of over $381 million.

In the Indian markets, FIIs’ bearish bias continued. During the week, they created fresh shorts totalling over $117 million in index futures segment.

In the cash segment also, FIIs sold over $383 million. However, DII inflows of over $400 million ensured declines in the Nifty were limited.

Cool-off in rates, not only contained the dollar surge but also helped equities to consolidate without much of a decline. Italy’s political stand out, US trade tensions and the upcoming data from the US including the non-farm payroll (due today) will set the course for the risk assets.

Key variables that could support fresh FII allocation into EMs will include (a) stability in EM forex space (b) Dollar Index starts declining (c) US 10-year yields staying below 3 percent and (d) MSCI EM Index reverting from the current support zone.

MORE WILL UPDATE SOON!!

Big week ahead! GDP data, 700 companies’ Q4 results; here are key things to watch in stock market

 

Indian equity markets have seen volatile sessions specifically in the last one month as the fourth-quarter earnings unfolded following which investors saw PNB reporting the biggest quarterly loss by any bank ever in the Indian history. If the last one-month picture is taken into consideration, the performance of benchmark indices Sensex and Nifty have been flat. The S&P BSE Sensex moved up 211 points or 0.6% to 34,925 from a level of 34,714 as on 26 April 2018 while, on the other hand, wider Nifty 50 index 12.65 points or 0.12% to 10,605.15 from a level of 10,617.8.

Going ahead in the next week, the domestic markets are likely to steered by upcoming Q4 earnings with over 700 companies set to report their respective fourth-quarter financial report card, GDP data for the period of January-March 2018, crude oil prices and rupee value against US dollar and settlement of India dated securities amounting to not more than Rs 12,000 crore auctioned by RBI.

Among the 700-plus companies which are scheduled to announce Q4 results in the week ahead, major firms are NTPC, Oil India, Dredging Corporation of India, Lanco Infratech, Ruchi Soya, NHPC, Bank of India, Indian Overseas Bank, Piramal Enterprises, Minda Corp, Hathaway Digital, NLC India, Walchandnagar Industries, United Bank of India, Aurobindo Pharma, NMDC, Coal India, Dilip Buildcon, MMTC, Dish TV, BHEL, Bharat Electronics, Ashoka Buildcon, Glenmark Pharma, Gati, BPCL, Simbhaoli Sugars, La Opala RG, Bharat Dynamics, Mishra Dhatu Nigam, Manpasand Beverages, Canara Bank, HDIL, Hindustan Copper, Fortis Healthcare, Punj Lloyd, ONGC, berger Paints, Infibeam Incorporation, GMR Infra, The Jammu & Kashmir Bank,Religare Enterprises, Torrent Pharma, Suzlon Energy, Rajesh Exports and Hindustan Aeronautics.

The settlement of RBI’s Rs 12,000 crore auction of India dated securities will take place on 28 May. The move is likely to see a spike in demand of rupee which may result in appreciation of the domestic currency against the US dollar. The Indian Rupee logged the biggest single-day gain on Friday surging as much as 56 paise apiece US dollar. Crude oil prices have fallen for three straight sessions with Brent crude slipping below $77 per barrel mark after it breached $80 level in the last week. India’s GDP data for the fourth quarter of the financial year will be announced on 31 May 2018.

MORE WILL UPDATE SOON!!

Foreign Investors Withdraw $4 Billion In May On A Rise In Crude Price

  

Foreign investors have pulled out a massive $4 billion (over Rs 26,700 crore) from capital markets so far this month, primarily due to a surge in global crude prices.

This comes after such investors had taken out more than Rs 15,500 crore from capital markets (equity and debt) in April, the steepest outflow in 16 months.

Foreign portfolio investors (FPIs) withdrew a net sum of Rs 7,819 crore from equities and another Rs 18,950 crore from the debt market during May 2-25, taking the total outflow to Rs 26,769 crore ($ 4 billion), according to the latest depository data.

Harsh Jain, chief operating officer at Groww, an investment platform, attributed the latest outflow mainly to a rise in cost of crude oil prices. This would impact all the oil-importing economies, including India, and adversely affect its current account deficit, fiscal deficit, imported inflation and create headwind for economic growth.

Besides, investors were cautious after U.S. President Donald Trump cancelled a planned meeting with North Korean leader Kim Jong Un and threatened to impose tariffs on auto imports. FPIs had started profit-booking before the Karnataka elections, a crucial indicator for the 2019 general elections results, he said.

“Another discomfort among the FPI (Category III) was the Securities and Exchange Board of India’s requirement for additional documents from key people in such a fund. Their concern is around the privacy and data theft,” Jain said.

So far this year, FPIs have put in just Rs 641 crore in equities and withdrew nearly Rs 30,000 crore from the debt market.

MORE WILL UPDATE SOON!!

Nifty to consolidate in expiry week; 3 stocks which could give 9-11% return in 1 month

We believe the markets will see a consolidation in the range of 10,500 to 10,730 levels over the next week.

 

We believe that the markets will see a consolidation in the range of 10,500 to 10,730 levels over the next week, and there could be volatility with respect to rollover movements in individual sectors/stocks and quarterly result.

Nifty 50 closed the week with marginal week-on-week gain of 10 points, and closed marginally above its crucial resistance level of 10,600-level.

The index recovered from the lows of 10,418 with broad-based positive momentum across sectors and the stocks in the last two days of the week.

The Nifty withhold the support levels of 10,440 (50 percent Fibonacci retracement of prior up-move from 9,952, to 10,929 levels).

We believe that the markets will see a consolidation in the range of 10,500 to 10,730 levels over the next week. Yes, there could be volatility with respect to rollover movements in The entire macro scenario is changing especially with respect to higher crude oil prices and weakness of rupee against Greenback.

We are witnessing stocks from energy, automobiles, cement and midcaps space which is hitting fresh lows and the correction is pretty sharp compared to the broader markets.

Defensive sectors like FMCG and IT are scaling fresh 52-week high in the current month. We would rather suggest booking profit albeit partially, in outperforming sectors.

Investors can also look to invest in beaten-down sectors/stocks, as they will converge over the next few months once the crude prices settle down in the near-term.individual sectors/stocks and quarterly results.

Declining by 7.4 percent and 6.9 percent on a month-to-date (MTD) basis, midcap and smallcap indices are trading below their long-term 200-day average, which offers an opportunity for the investors to accumulate high-quality midcap stocks at regular intervals to build a strong diversified medium-term portfolio.

Top 3-5 positional call which could give handsome returns to investors in next 1 month?

A) Here is a list of top three stocks which could give up to 11 percent return in the next 1 month:

Capital First (CMP: 557): Buy | Target: Rs 620 | Stop loss: Rs 535 | Return: 11%

The stock has retraced 61.8 percent of prior upmove (from Rs 346 to Rs 902), where its medium-term moving average worked as the key reversal point. The stock has closed at eight days high and with the sector in focus it is expected to outperform, going forward. The key technical indicators remain bullish mode, which signals strength in the stock.

Kajaria Ceramics (CMP: 549): Buy | Target: Rs 589-610 | Stop loss: Rs 515 | Return: 11%

The stock ended on a positive note after two weeks of consecutive decline, where its long-term rising trend line has supported the reversal. Convergence in RSI rise signals an overall positive trend. In case of any decline, its 200 week average will continue to work as key reversal point.

United Spirits (CMP: 3250): Buy | Target: Rs 3,550 | Stop loss: Rs 3,060 | Return: 9%

The stock reversed after taking the support of prior multiple lows and rose to 10-day closing high. Reversal in key technical indicators from their oversold zone signals a bullish trend reversal. In case of any decline, recent swing low will work as the key reversal point.

MORE WILL UPDATE SOON!!

Mood of the Nation survey: Key takeaways

If the polls were to be held today, BJP’s vote share would come down to 35 percent, UPA could get 12 percent votes while other parties (including SP and Mayawati-led Bahujan Samaj Party) would together account for 46 percent.

  

With the 2019 Lok Sabha elections less than a year away, both BJP and the Congress have sounded the poll bugle and are leaving no stone unturned.

Prime Minister Narendra Modi continues to lead the saffron party from the front while Congress President Rahul Gandhi has announced his prime ministerial ambitions.

According to the Lokniti-CSDS-ABP News ‘Mood of the Nation Survey’ (round three) released on Thursday, the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government is likely to return to power if the polls are held today, however, with a wafer-thin margin.

The BJP would not get a majority on its own and will have to depend on its allies to retain power, the survey suggests.

Here are some of the key takeaways from the ‘Mood of the Nation’ survey:

BJP may not get majority on its own

The survey suggests that if the elections were to be held today, the BJP would not be achieve the 272-seat magic number. It would have to rely on its allies to retain power at the Centre.

NDA would get 274 seats while the UPA would win 164 seats. Other parties and regional parties would get 105 seats, the survey has suggested.

In terms of the nationwide vote share, NDA would get 37 percent votes, down from 38.5 percent in 2014. UPA would get 31 percent votes, up from 23 percent, while others would get 32 percent votes.

BJP makes loses in Uttar Pradesh

Out of the 80 Lok Sabha seats in the state — the highest for any state in the country — the saffron party had bagged 71 seats. Akhilesh Yadav-led Samajwadi Party (SP) had won five seats while Congress and Apna Dal (NDA member) bagged two seats each.

NDA’s vote share in 2014 in UP was 43 percent while UPA’s vote share was eight percent. Other parties put together, had received 49 percent votes.

However, if the polls were to be held today, BJP’s vote share would come down to 35 percent, UPA could get 12 percent votes while other parties (including SP and Mayawati-led Bahujan Samaj Party) would together account for 46 percent.

BJP’s performance dips in southern India

Out of 132 seats in southern India, the NDA is likely to win just 18-22 seats while the UPA could bag 67-75 seats, according to the survey. Other players and region parties could win 38-44 seats, if the polls were to be held today.

In 2014, NDA had bagged 2 seats in the region, UPA had won 21 seats while other parties had clinched 88 seats.

BJP makes gains in Bihar, Eastern India

The survey has revealed that the NDA would maintain its numbers in the state of Bihar. The NDA is likely to have a 60 percent vote share, far ahead of UPA’s 34 percent. Other parties would have a six percent vote share, if the polls were held today.

In 2014, NDA had a vote share of 58 percent followed by UPA’s 28 percent. Others had bagged a vote share of 21 percent in the previous general election.

In July 2017, Nitish Kumar, Chief Minister of Bihar, resigned from his post and broke his party's 'Grand Alliance' with Lalu Prasad Yadav's Rashtriya Janata Dal (RJD) and Congress.

Nitish was sworn in as the new Chief Minister less than 24 hours after he resigned, but this time with the support of the BJP.

The survey has also suggested that the NDA’s popularity has remained intact in the east. If Lok Sabha polls were to be held today, NDA is likely to get 86-94 seats out of 142 seats. The UPA would get 22-26 seats while others parties would bag 26-30 seats.

In 2014, NDA had won clinched 58 seats in the region, UPA had won 21 while others bagged 63. East India here includes Bihar, West Bengal, Odisha, Jharkhand and Assam.

In West Bengal, chief minister Mamata Banerjee-led Trinamool Congress is expected to hold onto the state if polls were held today. TMC is likely to get 44 percent vote share, followed by BJP’s 24 percent, Left parties’ 17 percent and Congress’ 11 percent.

Congress leads in Rajasthan, MP with clear margin

If the Assembly elections in the states of Rajasthan and Madhya Pradesh were to be held today, the Congress party could trump the BJP in both states.

The BJP is lagging behind in Rajasthan by a 5 percent vote share. Congress is likely to bag 44 percent vote share, followed by BJP’s 39 percent, according to the survey.

In Madhya Pradesh too, where Chief Minister Shivraj Singh Chauhan is fighting the anti-incumbency factor, the Congress is maintaining a comfortable margin of 15 percent vote share over the BJP.

Congress is likely to get a 49 percent vote share while the BJP could come second with 34 percent votes, if elections were to happen today.

Rahul Gandhi’s popularity rises, PM Modi’s dips

Around 24 percent of the people who were surveyed preferred Congress president Rahul Gandhi as the prime minister. PM Modi however, retained his lead being the preference of 34 percent of the respondents.

The popularity gap between the two leaders has come down to 10 percent from what was 17 percent five months ago, according to the second round of the survey.

According to the survey, almost 47 percent of the total 15,859 respondents are of the opinion that the Modi government does not deserve to be voted back to power in 2019. Less than two of every five respondents or 39 percent people thought it deserved a second chance, with the rest remained non-committal.

MORE WILL UPDATE SOON!!

Technical View: Nifty 50 forms a bullish candle; 10,524 crucial for bulls in the coming week

India VIX fell down up by 4.46 percent at 12.55 levels. On the options front, maximum Put OI is intact at 10,500 followed by 10,400 strikes while maximum Call OI is placed at 10,800 followed by 11,000 strikes.

  

Bulls charged on D-Street from the word go as they helped Nifty50 to climb 10,550 as well as 10,600 levels on closing basis. The index which made a bullish candle on the daily charts formed a Hammer-like pattern (not exact) on the weekly charts.

The Nifty50 is now trading above its crucial short-term moving averages and today’s intraday low of 10,524 will be of big importance in the coming week, suggest experts. A break below this level could again put further pressure on the index amid expiry week volatility.

On the upside, the next target for the index is placed at 10,733 levels but bulls will be able to take full control of the index if it surpasses 10,929 which was recorded on May 15, 2018.

The Nifty50 which opened at 10,533 slipped marginally to hit an intraday low of 10,524. Bulls took control of the index and pushed Nifty above 10,600 to hit an intraday high of 10,628 before closing the day at 10,605, up 91 points.

It was heartening to see bullish Hammer formation on weekly charts as markets recouped 100 percent of the losses witnessed in the first three sessions of the week with back to back strong bullish candles of last two sessions. This V-shaped recovery on an accelerated path, after hitting a low of 10,417, is raising hopes of a bottom around 10,417 levels.

Though, it will be too early to conclude that bottom is in place at recent low but the same will be confirmed if Nifty50 get past 10,929 by next 4 sessions which also coincides with current month expiry.

Mohammad further added that traders are advised to take a cautious stance if Nifty slips below 10,524 levels in next 2 sessions. On oscillators front, MACD shied away with an uptick from its equilibrium line on daily charts and this kind of behaviour is usually regarded as a strong bullish sign. The current upmove can initially expect to get extended up to 10,733 levels.

India VIX fell down up by 4.46 percent at 12.55 levels. On the options front, maximum Put OI is intact at 10,500 followed by 10,400 strikes while maximum Call OI is placed at 10,800 followed by 11,000 strikes.

Meaningful Put writing is placed at 10,600 and 10,500 strikes which could act as a strong support while Call unwinding is seen at immediate strike prices which give room for further upside.

Options data suggests a shift in a trading range between 10,500 and 10,700 zones. The Nifty index opened flattish and witnessed sustained buying throughout the trading session. It formed a Big Bullish Candle on daily scale followed by Dragon Fly Doji on a weekly scale which suggests buying is visible at lower levels in the market.

Now, till it holds above 10,550, it could extend its gains towards 10,680 and then towards 10,725 zones, while on the downside supports are seen at 10,550 and then towards 10,500 levels.

MORE WILL UPDATE SOON!!

Sun Pharma Q4 profit up 7% YoY at Rs 1,309 crore, beats estimates

Revenues declined 1.11 percent to Rs 7279.9 crore in Q4 on YoY basis but came above analyst estimate of Rs 6,778.8 crore.

  

India’s largest drugmaker Sun Pharmaceutical's consolidated net profit rose 6.94 percent year-on-year (YoY) to Rs 1,309 crore in the fourth quarter ended March, beating analysts' estimates.

Consolidated revenue for the quarter declined 1.11 percent YoY to Rs 7,279.9  crore in Q4 but was above analyst estimate of Rs 6,778.8 crore.

Consolidated EBITDA margin stood at 24.1 percent in Q4FY18.

A Reuters poll had forecast a drop in net profit to Rs 947.4 crore. It estimated a revenue decline of 0.68 percent YoY to 6,778.8 crore.

The company declared a dividend of Rs 2 per equity share of Re 1.

The results were announced after market hours.

Shares of Sun Pharma rose 0.97 percent to close at Rs 466.55 on BSE, the benchmark Sensex gained 0.78 percent to 34,924.87 points.

MORE WILL UPDATE SOON!!

These 38 multibaggers stocks rose up to 600% in 4 years; do you own any?

Since 2014, midcaps have faced three large round of corrections in January 2016, November 2016 and May 2017. In the current round, midcaps have already retraced 14 percent from the top, puncturing the bull cycle.

Midcap stocks surged in 2014 after Prime Minister Narendra Modi assumed office on hopes of pro-growth reforms and a strong bounce back in economic growth.

As many as 38 companies have returned 100-600 percent in the last four years. These include: Dalmia Bharat, IIFL Holdings, Natco Pharma, NBCC, TVS Motor Company, Page Industries, Biocon, Ashok Leyland, Rajesh Exports, and 3M India.

But if you joined the rally late, there are chances that your portfolio might still be bleeding. The BSE Midcap index, which nearly doubled since 2014, came under pressure in the last five-months, weighed down by falling rupee versus the dollar, sharp selling by foreign institutional investors (FIIs) and market regulator Sebi’s reclassification of mutual fund schemes.

In October last year, the regulator issued a circular directing mutual funds to group their equity schemes under large, mid and smallcap categories based on the market capitalisation of stocks the scheme have invested in.

Sebi’s reclassification is aimed at simplifying the life of a mutual fund investor by rationalising the number of schemes available in the market and also re-categorising the same. The will enable the investor to differentiate between schemes as per his/her goals and risk appetite, with relative ease and without much confusion.

“The reason why Sebi reclassification is leading to a sell-off in midcaps and smallcaps is because many largecap funds had a proportionately greater exposure to these with the aim of outperforming the benchmark index: 

  

If we look at the losers, there are stocks that have lost up to 90 percent of their value in the last four years. As many as 21 stocks in the BSE Midcap index posted negative returns since the Modi government came to power in 2014. These include: Reliance Communications (down 90 percent), Bank of India (down 70 percent), Adani Power (down 65 percent) and Reliance Power (down 65 percent).

What should investors do with these midcaps?

Since 2014, midcaps have faced three large round of corrections in January 2016, November 2016 and May 2017. In the current round, midcaps have already retraced 14 percent from the top, puncturing the bull cycle.

Despite India’s macro story taking a hit due to falling rupee against the dollar and higher crude oil prices there is a higher likelihood of bottom-fishing happening in the short-term. Hence, experts advise investors to be cautious while picking stocks.

It is imperative that an investor re-assesses the portfolio at periodic intervals to weed out stocks which do not fit various fundamental criteria. While a considerable premium valuation may warrant at least a partial profit-booking in the stock, the mere fact that it has been a multi-bagger is not the most appropriate argument to exit a stock.

Investors concerned about rich valuations can focus on companies in the largecap domain or stocks that turned largecap, experts said.

Midcaps are still trading at premium valuations as compared to largecaps. If investors are not ready to hold the stock for 3-4 years, then they should exit from the winners which have given multi-bagger returns.

She lists Tata Consultancy Services (TCS), Yes Bank, Bajaj Finance and Bajaj Finserve as some of the stocks which have grown from midcaps to largecaps over a period of time. These stocks continue to perform and have delivered multibagger returns to clients.

From the above table, she recommends quality stocks like Jubilant FoodWorks, Westlife Development, Parag Milk, Gujarat Narmada Valley Fertilisers & Chemicals and Dewan Housing Finance Corporation which have not corrected despite the broader index correction.

MORE WILL UPDATE SOON!!

See Nifty at fresh record high in FY19; 'quality stocks' available post correction

Number of quality stocks have become attractive after the recent correction and these can be value investments.

 

Given the worsening macro scenario and likely inflationary pressure in ensuing months, led by higher oil prices, premium valuations are completely dependent upon the earnings trajectory of companies. A look at 27 companies forming part of the Nifty (excluding banks) shows that adjusted earnings have improved by around 12 percent year-on-year (YoY) as against expectations of 15-20 percent growth. The management commentary of companies has been encouraging as volume growth was robust across sectors. Hence, earnings growth can potentially improve further in coming quarters, which may lead to sustainable premium valuations. The market may also be supported by a persistent flow of domestic liquidity into equity mutual funds. We foresee earnings growth to be in the 15-20 percent range in FY19.

 It is difficult to predict crude oil prices in the near-term. However, there is an upward price bias in the short-term due to supply pressures owing to the recent sanctions in Iran imposed by the US and ongoing production discipline between the Organisation of the Petroleum Exporting Countries (Opec) and Russia. We are hopeful that prices should reverse to $70/bbl levels in the medium-term as higher oil prices tend to impact global economic growth, which ultimately hampers oil demand. Consistent increase in oil rigs in the US (US oil production surpassed 11 million barrels per day) along with the likely breach of production discipline by Opec members at high prices may support oil prices to reverse going forward.

Higher oil prices will certainly impact India’s twin deficit as we import around 80 percent of our total oil requirement. India’s oil import bill for April stood at $10.4 billion (up 41.5 percent YoY). If we extrapolate this figure, India’s oil bill for FY19 is likely to be around $120-125 billion as against $87 billion in FY17. Hence, this incremental bill is certain to have major ramifications on our fiscal deficit, which can also hurt economic growth to an extent.

Nifty is hardly 500 points away from its last all-time high hit in January. Hence, surpass of that level cannot be ruled out given the earnings recovery of companies. We will have two elections in Rajasthan and Madhya Pradesh in second half of 2018. A positive outcome in favour of the National Democratic Alliance (NDA) with a stabilisation in oil prices can augur well for the market.

Given the fact that the upcoming elections in MP and Rajasthan are NDA governed states, it will probably give some indication about the electorate’s mood ahead of general election in 2019. At present, the NDA is ruling in over 20 states. Hence, the outcome of these two states will be taken as an indicator of the likely outcome of general election in 2019.

 Around 40 Nifty companies have reported their Q4 FY18 earnings so far. Excluding banks, 27 companies have reported average earnings growth of around 12 percent, which is certainly lower than our expectations. Considering the management commentary of companies, we foresee earnings recovery in FY19 is to be better than FY18. We expect 15-20 percent earnings growth in FY19.

After the Reserve Bank’s circular regarding recognition of NPAs in February, all banks have reported higher-than-normal slippages in the March quarter. We don’t expect a major upward move in slippages in FY19 as almost all categories of bad assets have now been reported in NPAs.

FY19 will be a year of quality stocks, irrespective of their market capitalisation. Most midcaps and smallcaps have delivered very high returns over the last 2-3 years without much earnings support. The recent correction in midcaps and smallcaps is a consequence of high valuations without earnings growth. Many quality stocks have become attractive after the recent correction and these can be value investments from hereon.

A retail investor should first create an asset allocation plan. If someone has an investment horizon of 10 years, investments in equities should be an integral part of that plan. At a young age, more capital should be allocated to equities for investing on a regular basis. In India, equities have delivered more than 12 percent yearly returns for the last 15 months. In a growing country, where per capita income is still a fraction of the developed world average, equities will keep providing better returns. Therefore, the road to riches goes through equity but it requires patience to practice it.

The shift from offline to online trading, growing prominence of mobile among online platforms, and emergence of data science are some key changes. This has resulted in the investing community taking informed decisions. The focus of brokers is no more partial to equity broking, but shifting to emerging asset classes like mutual funds and insurance.The impact of these changes on the mobile platform has evolved from just being the core for facilitating trades on the go, it now imparts information and provides access to transact across MFs and insurance solutions.

MORE WILL UPDATE SOON!!