Perfect storm’ may hit D-Street in 6 weeks, can sink stocks.

An over 4,600-point fall in BSE Sensex in just 25 sessions may be feeling like disaster! 

 

But wait, the worst is yet to come. At least one analyst is predicting a ‘perfect storm’ on Dalal Street in less than six weeks, and citing solid reasons too! 

The Indian equity market has become ultra-sensitive to weakening macros and negative news flows such as oil price rise, rupee crash and some corporate developments. 

But a few foreseen events could unfold in the day  ahead, which may go against market wishes and trigger a massive correction for domestic stocks: US sanctions in Iran is one, US midterm polls is another  and outcome of India’s own state elections could be the third. 

More pain in the offing 

We believe the Nifty 50 is headed for the 9,900 level.This translates into a further 400 points slide in Nifty and 1,200 points fall in the Sensex from current their levels.

The biggest worry could be Iran sanctions that will come into effect on November 4. India sources 10-12 per cent of its crude requirement from Iran. 

Analysts says the stock market is still under-estimating the possible disruption to crude output, especially in the light of the fact that Saudi Arabia and Russia – two major producers – have ignored recent US calls to increase crude production. A major disruption may cause crude prices to see a major spike .

Testing time for investors 

Foreign equity outflow from India has already topped Rs 17,664 crore so far this year, which is the worst since the Rs 52,987 crore FII outflow recorded in 2008. Foreign portfolio investors (FPIs) have sold equities worth Rs 1,500-1,600 crore in last three consecutive sessions. Should concerns over emerging markets deepen, the FII selling may intensify. 

Foreign investors own a whopping $408 billion worth of holdings in BSE200 stocks. 

Markets move on liquidity. Mutual fund schemes are sitting on losses this year, but they have somehow managed to bring in retail money. Will retail investors to sit tight despite negative returns is something that remains to be seen. They have not faced this dilemma for long .

US mid-terms elections & trade rhetorics 

How the US deals with friends and foes post its mid-term elections and how the outcome influences key decision such as trade war and Iran sanctions remains to be seen. US holds mid-term polls in November. 

One must see whether the rhetoric on trade war starts to recede post the US mid-term elections.

India has deferred its decision on retaliatory tariff in response to the recent US duty hikes till till November 18. Delhi would want clarity to emerge on the US response on Iran sanctions, analysts said. 

In 2013, India had received a partial waiver of sanctions on that country. 

We expect sanctions to adversely impact international crude oil prices, and India will be impacted more due to higher domestic oil prices, inflation, fiscal, bond yields and rupee weakness.

State elections 

Forthcoming state elections could become another pain point ; three major states – Rajasthan, Madhya Pradesh and Telangana – go for assembly elections this quarter, along with two smaller states – Chhattisgarh and Mizoram. 

The results of these state elections could set the tone for the general elections to be held in May, 2019, it said. 

In a bear case scenario, Bhatia said, if even the outcome of state elections  is unfavourable, it will be a perfect storm. 

We can fall significantly more from here on because our premium over some of the other emerging markets will have to shrink significantly.

Meanwhile, the government’s move to cut fuel prices has not been taken positively by the market, as it raised fears of more populist measures as the elections draw near. 

Shares of OMCs plunged up to 25 per cent on Friday, in addition to a similar fall seen in the previous session. 

Analysts noted that during the last two state elections – Gujarat (November 2017) and Karnataka (June 2018) – marketing margins for both petrol and diesel had turned negative in the months leading up to the elections. 

MORE WILL UPDATE SOON!!

Carnage on D-Street! Top 10 mistakes you must avoid in a falling market

Experts feel that investors should avoid timing the market as it is very tough to predict a bottom or top. Stay with fundamentally sound companies which have always braved the fall.

   

The S&P BSE Sensex on October 5 plunged nearly 800 points while the Nifty50 dropped by 282 points to record its largest one-day fall since August 2015. For the week, the Sensex lost 5 percent and the Nifty 5.6 percent.

Investors lost nearly Rs 4 lakh crore in terms of market capitalisation on BSE, taking the total weekly loss to over Rs 8 lakh crore.

When carnage of this magnitude takes place, it is not the money investors lose, it is the confidence that's shaken. A similar incident happened in 2008 when almost 30-40 percent of index value was wiped out in a matter of days.

Retail investors took nearly 5-6 years to re-enter equity markets via mutual fund route and we are already seeing signs of redemption starting from mutual funds which will further exert pressure on markets.

According to data from CAMS, a mutual fund registrar which covers 85 percent of the industry flows, cash plans or liquid funds saw outflows worth a whopping Rs 69,694 crore.

What should investors do? Well, experts feel that investors should avoid timing the market as it is very tough to predict a bottom or top. Stay with fundamentally sound companies which have always braved the fall.

There are multiple parameters which investors can use to select the stock, but in a falling market examining a fundamental of the company is key tools or first layer of the screener. “This fundamental can be linked to revenue trend, growth in profit margin, the attractiveness of return-on-equity and finally valuation.

Given a gravity of fall in the recent period, it is likely to propel investors to take ill-advised moves which can hurt the overall financial plan.

We have also collated a list of 10 mistakes which investors’ should avoid in a falling market.

Avoid withdrawing money

A common mistake most investors do in a falling market is exiting from ongoing investment which is meant for long-term. During a course of the investment cycle, there will be multiple drops in price due to any reasons.

This drop shouldn’t prompt investors to withdraw money as long as the fundamentals of the underlying asset are strong. Further, investors should continue with ongoing SIP in mutual funds.

The market will recover in long-term irrespective of the fall which is also evident from a case of 2008 financial-crisis which fell over 52 percent but gradually it recovered on a long-term basis.

Avoid buying more to average

Most likely investors tend to fall prey for falling knife in its effort to average the cost in falling market regime. Although there is merit in averaging the cost, it should be done on the basis of only fundamental soundness. Otherwise, it is likely to see a further drop in price if it’s backed by deteriorating fundamental.

Avoid value hunt

It is a general tendency among investors to buy the stock at discount, and especially during the falling market, they tend to go hunt for a value stock. Though this is a good bargain, it requires a series of analysis and studies. Making a random handpick just because a stock corrected could turn into value-trap.

Avoid altering long-term strategy

It is usually during falling market when investors try to change their investment strategy due to short-term events like falling market. This undermines the long-term strategy which will slow down the pace to achieve the financial objective.

The effective way to tackle this short-term event by building a proper asset-allocation which is sustainable in long-run.

Avoid using emergency

In order to fuel the portfolio and capitalize from the falling market, they tend to take leverage position by using emergency corpus. However, if decision reverse it will have a serious implication on financial position.

Trying to invest into favourites at one go

It is always prudent to invest in a staggered manner rather than arguing with the prices about how low is too low.

Getting caught in ownership bias

Fall in the market requires one round of introspection along with a fresh listing of potential winners and losers due to shift in the regime.

Past winning sectors may not be the best way to go. Choose better stocks of today than better stocks of yesterday. Respect the sector rotation.

Tying to catch a falling knife:

Single day falls in excess of 10-15 percent attracts a lot of investor attention. One drastic fall must be discounting some crucial information. Till the time we make peace with the new development, do not get in just cause the prices have come off.

Converting Trading into Investment:

A common mistake is to hold on to a trading position. The stock intended to be booked with 3-5 percent profit is held with a rationale of strong fundamentals when starts falling even beyond 3-5 percent.

This disconnect in the objective of deployment is an error along with the fact that the very fall might cause deterioration in fundamentals.

Exit trades with Stop Loss. Study the stock before investing.

Lack of Active Realignment:

Investors should be active in the day-to-day business of the market but a process of realignment is definitely prudent practice. Keep a track of portfolio beta and adjust it to a low beta or high beta by simply shifting weights as and when situation warrants.

Prudence is in reducing portfolio beta in the falling market and raising portfolio beta after a rising course resumes.

MORE WILL UPDATE SOON!!

Buckle up! Stay light as Nifty50 could retest 9,800-10,000 levels in medium term

The market is expected to remain weak on a medium-term basis.

 

The momentum-based oscillators are in ‘sell’ on near and on medium-term basis. Given the sharp fall over the past few weeks, the market is expected to remain weak on a medium-term basis.

The Nifty 50 index formed a “Bearish Engulfing” on the monthly time frame (September 2018). In general, this pattern has a negative implication for the Nifty 50 index and the market in general. 

Further, the Nifty 50 index closed below its 200-days simple moving average (SMA) for the second day in a row which is not a bullish sign.

The momentum-based oscillators are in ‘sell’ on near as well as on medium-term basis. Given the sharp fall over the past few weeks, the

market is expected to remain weak from a medium-term basis.

Our proprietary Greed/Fear indicator, which is a good sentiment measure of medium to long-term trend for the market, is well below its

equilibrium signalling that the capitulation is yet to come.

Taking that into consideration, the Nifty50 index may attempt to test the zone of 9,800 to 10,000 levels in the near-term.

A) The key indices and major stocks are displaying weak trend on the charts. The breadth of the market continues to remain in the negative

zone, as there are more number of stocks hitting fresh 52-week lows, while there are hardly a handful of them scaling to 52-weeks highs.

Given the negative readings, any sharp fall on the Nifty50 index towards 10,000 may attract some contra-trend buying. Therefore, one has to

be very nimble footed while attempting any such contra trades.

We are yet to see a proper capitulation in the market as measured by key indicators followed by us, therefore, there may be incremental

legs of weakness before the final bottom is confirmed.

Till then, it is better to stay on the sidelines.

MORE WILL UPDATE SOON!!

Options for equities as helmets for daredevils in time of stock market crash

Often times in the midst of a highly volatile session the market presents us with great anomalies. Such anomalies generally are short-lived and a corrective course that runs within a session or two would bring in swift opportunist gains.

  

The genesis of the Futures & Options (F&O) is into risk management, more so into the transfer of risk. Let us today discuss how these instruments, especially Options with its non-linear payoff can come in handy.

Often times in the midst of a highly volatile session the market presents us with great anomalies. Such anomalies generally are short-lived and a corrective course that runs within a session or two would bring in swift opportunist gains.

Over course of my trading life, I have had 3 such different types of situations, where it is too lucrative yet too dangerous to take a trade.

Where it’s like trying to fetch treasure out of a snake pit. All we are adding here is a pair of bite proof gloves in Options so that treasure or no treasure, won’t risk our lives.

Case #1 Stock has fallen 30-40-50% … good opportunity to invest for my bottom fishing friends

Here the investor is attempting to catch a falling knife. While there is a possibility that the stock would turn itself around immediately and pivot back to a more reasonable damage, equal chances are that there could be much more left to lose.

Relief comes in terms of Buying a Call. Instead of buying a stock at 100 buy a 100 strike Call. If the view is right, one would get all the benefit.

But, in case things were to deteriorate further from there all that is at stake is the Call Premium. Essentially, a cost paid to get the pair of gloves. On a later date when expiry nears the same can be converted to delivery as the storm calms down.

Case #2 If it has fallen so much at least there will be a recovery if not today maybe tomorrow

Holders of similar view as Case #1 but the class of participants here would be Traders. While the higher premiums are justified in the volatile times, it would ruin risk-reward for traders, who would want to get rid of the position as soon as a day or two if the stock pivots towards to parity.

In such cases, more often than not the premiums are up across strikes (EG 110 Call of Rs100/- stock would be trading at 15 in volatile times instead of 5 in normal times).

To counter this especially when one wishes to get rid of the position with mildest of recoveries. Pair up the Call Buy with a Short position in a few strikes higher call.

While the Call sold would cap the profits, it would give that much-needed funding when the premiums have soared multifold.

Case #3 abrupt move for an Investor Holding stock for Long Term

This is more a wealth preservation technique, instead of a wealth creation. I know the investors would not be tracking the stocks on daily basis, but it wouldn’t hurt to have an alert mechanism in place. (not that difficult in this digital era).

Just a simple drawing of attention would do when the stock starts behaving out of ordinary on the lower side. In such a situation, when there is an above average move Buy a Put Option just till the price stabilizes and shows you signs of firm ordinary behaviour. It is sort of buying medical insurance at the first sight of health irregularities.

God forbid if anything unfortunate were to happen, the pockets are not drained. So, gain all there is to gain if you win but using Options in turbulent times do not lose if you lose.

MORE WILL UPDATE SOON!!

Top lessons from Friday’s market crash and the swift recovery

Indian economy has been on a path of recovery over the last four quarters. There has been a broad-based improvement in growth suggesting tapering of GST and demonetisation disruptions.

  

The current market volatility isn’t accompanied by a live event so all sorts of conjecture on the state of the market are possible. It’s very hard to ignore a high decibel noise and focus on long-term. But here is how I see it:

a. Fake news is real. Do not alter investment or trading decision without fact-based analysis. Cheap doesn’t necessarily mean quality.

b. Avoid bottom fishing or selling based on forwards and rumors. Focus on business which can deliver earnings growth with strong balance sheets.

c. Leverage positions in F&O have to be sized correctly. Smaller positions for bigger moves is ideal when volatility rises. First time traders and investors should not be exposed to the volatility of derivatives.

d. Bear and Bull markets do cause prices to over and undershoot. Remember patience is a great virtue in markets and as numbers improve markets will come back.

What’s concerning?

A) Short term triggers – There were few short Term Triggers which caused Today’s rout.

RBI’s instructions to Yes Bank to replace Rana Kapoor as CMD put a lot of stress on the bank as well as weaker peer set across banks and NBFCs. While the change in leadership could be challenging for Yes bank to maintain its growth momentum and manage the balance sheet quality, generally tight liquidity conditions indicated by tightening yield put pressure across the sector. DHFL and Indiabulls Housing Finance were the other prominent sufferers.

The uncertainty surrounding the future of IL&FS and therefore liquidity conditions are souring sentiment. Though these issues appear to be transient they can be a source of significant volatility in the short term.

B) The macroeconomic landscape remains challenging. India’s external positions remain a key source of trouble for the rupee and interest rates. Pressure on India’s CAD due to stubborn exports and exuberant imports coupled with a lull in FDI/FII flows, a stressful dollar liquidity scenario is emerging. At 8.2% 10-year yield RBI may be constrained to raise rates to fend the rupee as well as contain the rising inflationary tide.

C) An intensifying dollar liquidity vortex is squeezing emerging markets one after the other. US FED, US Treasury and Corporate action combined together is likely to remove nearly $1.12 trillion in Dollar liquidity in 2018. This would keep weaker EMs on the edge.

D) Trade wars which have been pure political rhetoric till now but with $200 billion worth of imports duty on China lurking it may become a stress point.

The silver lining 

A) India’s economic growth is reverting to normalcy although many challenges remain. The current weakness in rupee is a way of markets to self-correct. Once this round of weakness is over and stock valuations become attractive and another round of opportunities will emerge.

B) The reflation of the Indian economy, which is underway, will lead to another secular trend in India’s consumption story. Indian economy has been on a path of recovery over the last four quarters. There has been a broad-based improvement in growth suggesting tapering of GST and ‘demonetisation’ disruptions.

C) Government expenditure has been a source of support for the economy and is likely to be so in a pre-election year.

D) The best news is perhaps on the earnings front where profit growth in Q1FY19 (ex PSU banks) has been close to 20 percent and maybe a harbinger to better tidings as the IIP and core sector data indicates.

MORE WILL UPDATE SOON!!

Friday's crash signals time to 'hide in defensives'; Sun Pharma, Wipro, Dr Reddy’s make good bets

Our strategy should be to hide ourselves in the defensive sector till the Nifty does not cross the all-time high level of 11,770.

 

In the past, the Nifty has a number of times witnessed a steep fall due to extreme sell-off because of unwarranted reasons. It is not new to market participants and instead of thinking and wasting time on what has happened, we should be focusing on the next strategy and learn from such falls and make the most of it.

Our observation has been that since the market has announced the GDP numbers (above 8.20 percent) it has been falling consistently. This is the best example of the famous quote, "Buy the rumour and Sell on the news".

In September so far, the Nifty has fallen 4.50 percent and the index heavyweights are down by nearly 10-12 percent, which is in tandem with the trend of the market.

However, we see that there is some serious damage while going through a stock-specific activity.

The lowest level of Friday is going to act as a major support level for the Nifty. It was the 50 percent level of the entire rise between 9,950 and 11,760.

We must give due weightage to the 50 percent retracement ratio and that is the major reason that we consider it to act as a trend decider level for the market in the future.

If we see increased volatility and further weakness below 10,865 on Monday then one more round of selling cannot be ruled out to levels that could either be 10,650 or 10,550.

Being in an uncertain market, instead of knowing what could be the next level we should try to understand what experts do during such market sell-offs.

Our strategy should be to hide ourselves in the defensive sector till the market does not cross the all-time high level of 11,770.

The reason — currently that the market is in an uncertain zone and due to a number of events which are lined up (US Fed meet/RBI meet and quarterly numbers) there could be increased volatility. These sectors trend higher during uncertainties.

While looking at the current statistics of GDP and the trend of the rupee, we suggest that one should look to add pharmaceuticals stocks over FMCG.

Technology stocks have already delivered eye washing returns in the past 12 months.

Taking a "Bottom Up" approach while selecting stocks from technology, and using a "Top Down" approach is advisable in pharmaceuticals space.

Technically, we like Sun Pharmaceutical with a final stop loss at Rs 550 and Dr Reddy’s with a stop loss at Rs 2,300 from the pharmaceutical space. On the higher side, we can expect 30 percent returns from current levels in both these stocks.

From the technology basket, we would stick to Wipro, which is entering into a multi-year breakout zone, keeping a stop loss for the same at Rs 300 on a closing basis.

Multi-year breakout formation in stocks generally offers hefty returns to investors. We expect Wipro to move to its all-time high of Rs 517 in the next 12 months.

MORE WILL UPDATE SOON!!

Nifty likely to trade sideways ; 3 stocks which could give 5-11% return

Upside for Nifty is expected to be capped on a short-term basis. We remain selective on specific stocks only and avoid aggressive long positions.

 

Despite outlining government’s measures to strengthen domestic currency and narrow current account deficit, the India equity market continued to witness a volatile trade regime on a range-bound level.

Further, the roll out from US administration to impose 10 percent tariff on Chinese imports continued to dent market sentiment, and once again the index breached below psychological levels 11,500 earlier in the week on Monday.

The Nifty index slipped from its important support level of 11,350-11,300 to touch a weekly low of 11,250 levels over a sustained selling pressure towards the closing hour.

Although the index rebounded marginally during the weekend session, it consolidated over the last two days to close at 11,278.90 levels, down by about 0.08 percent on a week-to-week basis.

The drag dominantly came from PSU Banks and Auto index which was down by 5.81 percent and 2.57 percent, respectively. The FMCG index was the top gainer with about 0.33 percent on the weekly basis.

After making a correction for two consecutive sessions to slip below important level of 11,300 levels coupled with a breach below 5-20-days EMA levels, the index formed a solid bearish candlestick pattern on its weekly price chart, indicating a selling regime.

The weekly RSI on chart stood at 59 levels indicating no major divergence in price, while the MACD continues to trade above the Signal-Line. The immediate hurdle for the index is currently placed at 11,523 and the next important support level is placed at 11,176.

The continuation of negative sentiment over falling rupee coupled with the weakening of global sentiment as trade tariff battle continues to escalate between the two giant economies of the US and China.

As internal advance-decline ratio continues to indicate a negative setup for the domestic market, the sideways direction favouring the downside regime is expected to keep the index range bound.

As an upside for the index is expected to remain capped on a short-term basis, we remain selective on specific stocks only and avoid aggressive long position. We maintain a range bound trade for the index at 11,520 levels on the upside and 11,237 levels on the downside.

Here is a list of top three stocks which could give 5-11% return in next 1 month:

Bhansali Engineering Polymers: Buy| LTP: Rs 137.05| Target: Rs 152 | Stop Loss: Rs 122 | Return: 11%

Bhansalli Engineering witnessed a sharp correction in the last six-month from a price band of Rs 217-160 towards Rs 125-120 levels, taking a strong support at Rs 111 levels.

Although it witnessed a periodic correction on a closing basis, the scrip recently witnessed an upward trajectory after bottoming out at Rs 120 levels and thus indicating a decisive buying trend at current levels.

The momentum indicator outlined a positive trend with weekly RSI inching at 58 levels. Further, in the coming session MACD is also likely to make a bullish crossover to trade above Signal-Line. We have a buy recommendation for Bhansalli Engineering which is currently trading at Rs 136.65.

Bajaj Corp: Buy| LTP: Rs 456.65| Target: Rs 490| Stop-Loss: Rs 425 | Return: 7%

Bajaj Corp made a strong rebound on its six-month price chart after consolidating in a range of Rs 496-476. It made a low of Rs 395 levels and managed to breakout from its crucial level of 100-days EMA levels placed at Rs 430.

The scrip touched a high of Rs 468 levels despite closing marginally below with gain of 6.73 percent on an intraday basis, and saw a significant volume build up against its average level in the previous trading session.

The weekly RSI level at 57 has shown a positive price divergence while MACD indicates a likelihood of bullish crossover in the next few sessions. We have a buy recommendation for Bajaj Corp which is currently trading at Rs 457.55.

Tata Motors: Sell| LTP: Rs 252| Target: Rs 240| Stop Loss: Rs 268| Return: 5%

Despite a periodical reverse trend, Tata Motors continues to remain under selling pressure on a weekly basis. It consolidated from a higher band of Rs 364 levels towards low of Rs 248 levels during the last six months.

It further slipped below from its 200-100-days moving-average level placed at Rs 383-370 levels to decline about 9 percent on weekly basis and thus indicating a short-term pressure on price.

The RSI on chart stood at 35 levels while MACD trading below its Signal-Line, indicating selling regime. We have a sell recommendation for Tata Motors which is currently trading at Rs 251.50

MORE WILL UPDATE SOON!!

Global brokerages see limited upside for Indian market. Here are 10 strong buys for 1-2 years

Goldman Sachs, which was strategically overweight on India since March 2014, has turned slightly cautious towards Indian market in 2018 and lowered its investment view to marketweight from overweight earlier.

  

While bulls were in full control until last month, September is turning out to be a lackluster month. The Nifty50, which touched a record high last month, saw sharp selling pressure in this month taking the index below 11,300.

Escalating trade war fears, sharp drop in the Indian rupee, growing concerns of rising current account deficit due to jump in crude oil prices, selling by foreign institutional investors and risk of rate hike by central bankers are some of the factors that weighed on Indian markets.

Global investment banks such as Goldman Sachs and Morgan Stanley, which have come out with their reports on Indian market, suggest that premium valuation could be a concern and the upside from current levels remains fairly limited.

Global investment firm Morgan Stanley has raised its 30-share BSE Sensex target to 42,000 for September 2019 implying a potential upside of 11 percent, on the other hand, Goldman Sachs maintains a target of 12,000 on Nifty which translates into an upside of little over 5 percent.

Goldman Sachs, which was strategically overweight on India since March 2014, has turned slightly cautious towards Indian market in 2018 and lowered its investment view to marketweight from overweight earlier.

Sectorally, the global investment bank has upgraded defensive stocks and exporters. It is overweight on banks, tech and metals. The key downside risks remain a less stable government.

Morgan Stanley, on the other hand, said Indian equities continued to be in an uptrend and investors should bet on favourite underperformers.

"Investors should choose price underperformers with improving earnings outlook and finally broaden their portfolios by adding small and midcaps," it said.

On its Focus List, Morgan Stanley added SBI, Prestige Estates and Apollo Hospitals, and removed Infosys, Havells India and Zee Entertainment, given the recent downgrades.

We have collated a list of top 10 fundamentally strong stocks from various experts which investors can look at buying with a minimum holding period of 1-2 years:

Dr Reddy’s Laboratories:

The company has reported robust first quarter FY19 results, aided by the launch of gSuboxone. According to the management of the company, it has focus on operational efficiencies which helped in significantly improving its margin profile.

In FY19, its priorities are driving productivity improvement, focusing on core therapeutic areas and big brands, and scaling up New Chemical Entity (NCE) launches done through the Amgen deal.

In the medium to long term, management of the company wants to focus on ramping up biosimilars through internal and partnered assets and building differentiated products in relevant therapies accompanied by further ramping up of the base business.

The management expects 15-20 launches in FY19 and also expects emerging markets to grow 16% YoY led by a robust spurt in Russia and ROW.

Zee Entertainment Enterprises:

The company has led the industry in its evolution and transformation. Along the way, it has entered newer geographies, both domestically and globally, launched multiple channels, strengthened distribution, expanded the genres and widened its audience profile.

Moreover, management focus towards expansion and market share would give strong growth to the company in coming years. During the quarter, its consolidated advertising revenue grew by 18.6% to Rs 1,146 crore.

Domestic advertising revenue growth at 22.3% continued to be strong driven by demand across categories and partly aided by lower growth in the base quarter.

Bajaj Auto:

The company has a diversified business model and has a strong focus on the profitable growth, widening reach in export markets and strategic alliances with global majors.

The domestic 2-wheeler market would start growing from the festive season & would continue to grow for next couple of years. The management has assured that the company would see a very healthy top line growth and a very healthy EBITDA increase in coming quarters.

FY18-19 capex plan stands around Rs 250-300 crore. It would look to expand and strengthen the 150cc Pulsar segment in addition to pursuing new three-wheeler markets within India.

Its total current capacity is approximately about 6.6 million. 3-wheelers will be approximately about 7.2 lakh. The company expects 1.9 million export numbers for FY 19.

UPL:

The company has strong fundamentals and a robust outlook. Its strong focus on brand building and customer reach is helping the company in increasing its market share in major addressable markets.

Moreover, with the acquisition with Arysta LifeScience, the company will be one of the world's largest global crop protection companies, with an innovative and differentiated product portfolio.

The management has been focussing on technological enhancement and new product developments which would aid the further financial growth of the company. Moreover, the company believes new launches would bear fruit in the coming term.

Indian Hotels Company:

The Company plans to continue to grow through a judicious mixture of owned and leased hotels, a de-risked model along with its ability to attract management contracts.

Its command and long & successful track record in operating hotels for third party owners would facilitate growth for the future.

Moreover, it has the ability to deliver improved returns on capital would be driven through product renovation, rigorous asset management, revenue maximization, cost control and reduced leverage and exit from non-core underperforming assets.

It has assigned a capex of Rs 3,000 crore for the next five years and hotel industry occupancy levels and average room rate (ARR) are showing upward trends due to a demand-supply gap.

Mahanagar Gas:

Monopolistic nature of the business and ramp-up/expansion in new geographies would drive volume growth in the coming years. Better economics of CNG/PNG versus liquid fuels in an era of a buoyant crude price regime and maintained spreads are tailwinds for the company.

Axis Bank:

Axis Bank has made significant investments to ride the next growth cycle (post-near-term asset quality challenges), with strong capitalisation and an expanding liability franchise.

The worst seems to have been priced in, and the bank is available at attractive valuations as compared to other similarly-placed peers. The new CEO could bring in a fresh perspective to the bank’s growth plans.

Rico Auto:

Post its split with FCC in 2015 Rico Auto has changed its strategy and now caters to PV and CV markets in addition to 2W. Strong order book of Rs 4800cr, capacity expansion and increasing volumes in alloy wheels, changing product mix are expected to improve the OPM.

Rico is in the process of launching 3 more products and improving profitability may help it get re-rated to a PE comparable with other auto-ancillary companies.

Engineers India:

EIL is likely to benefit from the expected capex in the hydrocarbon and petrochemicals industry as it is a market leader for consultancy. It’s a debt-free company with an order backlog of Rs 7229cr (~3.5x book-to-bill). With a healthy cash balance of Rs 2500cr, it may reward shareholders through another buyback or special dividend.

Sun Pharma:

Sun Pharma is amongst the few companies in India to have made large upfront investments in US specialty. OPM are expected to improve on the back of key drugs launch and moderating price erosion in the US.

The company has 422 approved products in USA and 139 pending for approval. Ramp up of generics and specialty business driven by increased investments augurs well for the company as it improves the launch visibility.

MORE WILL UPDATE SOON!!