Ahead of the bear run expected by majority of the market experts as the 50-stock Nifty is trading below 10,800 for two sucessive trade sessions. Market experts are suggesting invstors to go by the fundamentals of the counter they are going to invest in. On the basis of that, here are the top picks by experts that investors can think of before making any investment decision:
1] Prestige Estates Projects
Prestige Estates Projects reported revenue of Rs 11bn, down15% YoY, affected by IND AS 115 implementation in Q1FY19. In absolute terms, EBITDA grew by 35% YoY to Rs 3.4bn as projects booked (Kingfisher Tower & Royale) in Q3 were high margin in nature. Pre-sales was up 79% YoY and down 17% QoQ to Rs 9.4bn (Prestige’s share), primarily aided by existing projects and continued momentum in Jindal City project launched in Q4FY18. Also, collections were steady at Rs 9.3bn, flat YoY. In Q3, Prestige launched 1.6mn sqft of new projects at Bangalore and Hyderabad. Rental income was up 14% YoY at Rs 1.87bn, led by consolidation of Capitaland stake.
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On suggestion to the investors in regard to the realty counter Param Desai, Analyst at Elara Securities told, “The fundamentals of the counter indicating an upside potential of 18 per cent. We recommend investors to accumulate the counter and book profit at Rs 235/stock levels.” Currently, the stock is hovering around Rs 199/counter levels.
2] Dhanuka Agritech
Dhanuka Agritech revenue declined by 2% YoY to Rs 2.2bn, which was below our estimates of Rs 2.3bn and Consensus estimates of Rs 2.4bn. Volume contracted by 6% on less sowing during Rabi season & pest infestation and high channel inventory. Revenue dragged, given higher-than-normal sales return of Rs 490mn in Q3FY19. Adverse currency movements, rising raw materials prices and an inability to pass on the cost due to weak farmer sentiments led to a 670bp drop in gross margin to 36.6%. Consequently, EBITDA margin contracted 600bp YoY to 10%. EBITDA was down 39% YoY at Rs 215mn and was below our estimates of Rs 362mn. Adjusted PAT fell by 49% YoY to Rs 146mn.
On suggestion to the market investors in regard to the counter Pratik Tholiya, Analyst at Elara Securities told, “Fundamentals of the counter suggests an upside potential for 24 per cent. An investor can take a buy position in the stock for the target of Rs 466/stok levels.” Currently, the stock is hovering around Rs 376/counter levels.
3] Coal India Ltd.
Coal India delivered strong set of numbers with revenue at Rs 25046cr (up 15% YoY and 14% QoQ) on the back of significantly higher e-auction realisation at Rs 2847/t (up 42% YoY and 10% QoQ) and strong FSA realisation at Rs.1334/t (up 13% YoY and 2% QoQ). Off take volume came in at 153.8mt (up 1% YoY and 12% QoQ). Share of FSA increased to 88% of total off take in 3QFY19 (vs.80% in 3QFY18 and 85% in 2QFY19) and e-auction share fell to 10% (vs.17% in 3QFY18 and 13% in 2QFY19) but was better than expected. Coal dispatch to power sector increased to 126mt (up 3% YoY, 14% QoQ), however better than expected e-auction volume as well as realisation helped the company to robust performance. Going ahead investors believe company will post strong set of number in 4QFY19 as well, driven by strong realization in both FSA and e-auction. Furthermore, improvement in coal inventory level at power plants from 6 days at the end of Oct’18 to 12 days in Jan’19 would leave more room for improving e-auction volume.
On suggestion to the CIL counter Sagar Sharma, Research Analyst at Narnolia Financial Advisors told, “Fundamentals of the counter suggests and upside potential for 40 per cent. An investor can take buy position in the stock for the target of Rs 309/stock levels.” Currently, the stock is hovering around Rs 220/counter levels.
Apart from that pharma and IT stocks are expected to perform better. Hence, traders are expected to go by the minute details.
Niharika Ojha, Research Analyst at Narnolia Financial Advisors told, “Investors can think of taking buy position in technology stocks like Infosys, HCL Tech, MPhasis, MindTree, Tata Elxsi and Persistent.”