The golden rule for Samvat 2076 will be to stick to large caps and focus on true blue sustainable quality of earnings. Here are six such stocks to buy.
Despite all the concerns over Jio and GRMs, RIL continues to beat the global benchmarks in refining and petchem businesses. With a major revamp to cut Jio’s debt on the anvil, the group is likely to see a bigger value explosion. Digital and retail business has already become the driving forces of RIL.
You have seen this stock outperform the peer group ad nauseam. The September quarter saw a sharp growth in profits as well as a healthy expansion in its net interest margins. With gross NPAs still less than 1% and a strong retail book and CASA base, HDFC Bank is likely to give value for money next year too.
Notwithstanding all the hue and cry over consumption slowdown, HUVR hardly appears to be impacted. Top line growth may have tapered but the profit growth continues to be robust. With a strong rural franchise, HUVR is best poised to capture the rural mass market when demand picks up. The full benefit of GST on its efficiency and profitability is yet to manifest in a bigger way.
If you are worried about the whistle blower allegations, it does appear to be more of a case of misplaced enthusiasm in this instance. Class action suits would hardly apply in such cases and Infosys creates too many jobs in the US for such minor complaints to be taken seriously. On a more serious note, here is a company that consistently builds on growth, margins and guidance. This is your best bet in the IT sector!
Even as most FMCG companies have protested about the slowdown, Asian Paints has continued to flatter. There are a number of reasons. Firstly, it has made a big shift towards decoratives and that is less vulnerable. Its direct access model has helped to have full control over the value chain. Of course, low oil prices reduce its input costs and give a natural edge to Asian Paints.
If you think the stock is quoting at a rich valuation, you are perhaps right. But Bajaj Finance will benefit from the “winner takes it all” structure of NBFCs as other are struggling with basic issues. In addition, the retail focused business model and zero asset liability mismatch makes Bajaj Finance one of the top picks in the financials space. Forget the P/E ratio and focus on the story! ©