As we are headed towards the latter half of the year 2019 investing in the right stocks to strengthen your financial position should be at the top of your priority list. To help you keep the outperforming stocks for this year well within your investment radar here is an inclusive list of top stocks that you must look out for this year.
Indian Hotels: Buy| LTP: Rs.148| Target Price: Rs.163
Indian Hotels is currently the largest market player in the hospitality sector. It is expected to continue to have a sharp growth for the rest of 2019. It is expected to benefit largely from the turnaround happening in the hospitality sector. Since the occupancy level of the Indian Hotels is placed at 68%, the growth opportunity for this company is substantially high. Its efforts to rationalize expenses and high fixed cost proportion gives it an edge in terms of operating leverage. The current high demand scenario makes it quite a hot cake in the stock market space.
Jubilant Life Sciences: Buy| LTP: Rs.515| Target: Rs.775
Jubilant Life Sciences is a reasonably valued mid-cap pharma company expected to be one of the top scorers this year. Experts estimate the earning from this stock to rise by approximately 77% in the financial year 2019-20. Life sciences ingredients and pharma are expected to do well in 2019-20. The anticipated rise in profits is reasonable. The margins in the pharma industry are expected to substantially improve as a result of its presence in specialty pharma and formulations. As a result of the approval of the Rubyfill in the USA and long-term contracts in the specialty pharma business, the pharma segment in India is likely to see healthy growth and has great upside potential. This stock has a PE of 14.
Hindustan Unilever: Buy| LTP: Rs.1820| Target: Rs.2140
In the large-cap Indian consumer space, Hindustan Unilever (HUL) offers the best growth visibility. Four crucial factors are largely contributing towards levitating is earnings growth trajectory to about 20%. They are the following.
- Paced improvement in adapting to changing market requirements.
- Extensive plans for deploying technology and creating more entry barriers.
- Strong bend towards premiumization.
- Recognition and Prudent execution on Naturals.
HUL’s recent acquisition of GSK Consumer healthcare business has pushed HUL among one the country’s market leaders in the food and refreshment s category in which earlier it didn’t have market leadership.
Oberoi Realty: Buy| LTP: Rs.453| Target: Rs.574
In FY18 Oberoi Realty had a net debt to equity ratio of 0.3x. With strengthened monetization visibility of its ongoing projects and upcoming projects, Oberoi is anticipated to produce healthy free cash flow for the period FY18-20. It has one of the strongest balance sheets in the real estate sector of the nation. Its financial strength is likely to lead to value adding land acquisitions that are expected to drive growth potential way beyond the current land bank. Oberoi’s plan to multiply its annuity portfolio from 1.6msf to 4.2msf is expected to result in a 4x increase in the leasing income in the coming five years. The expected revenue/PAT CAGR/EBITDA over FY18-20 is of 47%/71%/45%.
Quess Corp: Buy| LTP: Rs.674| Target Price: Rs.886
Quess Corp reported strong growth in 2018-2019. It is one of the nation’s leading service providers. Quess Corp is expected to largely benefit from the continuous shift in favor of big market players in its industry. As a matter of fact, Quess Corp has seen a growth that is twice the industry average. Quess Corp’s margins have been improving as a result of increased contribution coming from specialized staffing. Its EBITDA margin has improved from 43% in 2018-19 to 31% in 2019-2020. Reasonable valuations have attracted analysts to Quess Corp. Its improving growth quality, cash flow generation, current valuation, robust growth profile makes it an attractive stock in 2019.
Aurobindo Pharma Ltd: Buy| LTP: Rs.723| Target: Rs.920
Aurobindo Pharma Ltd has a strong presence in Europe, USA and South Africa (exports form about 70% of revenue). It is one of India’s largest integrated pharma companies. Aurobindo Pharma Ltd is expected to drive a 2x industry growth rate in the Europe market and enhance profitability through the transfer of 97 products from Europe to India. This company’s outperformance in the Europe market, robust ANDA filings rate, minimal regulatory obstacles, and high paced approvals make its stocks one of the most sought after stocks this year. It is expected to record a revenue of 24%, EBITDA of 22% and 18% CAGR for Adj. PAT between FY2018-FY2020E. In FY2020E ROE and ROCE are anticipated to be 22% and 16% respectively.
Ashok Leyland Ltd: Buy| LTP: Rs.102| Target: Rs.150
Ashok Leyland Ltd is expected to majorly benefit as a result of an expected 10% to 12% growth in volumes in the Indian MHCV industry for FY2019. This growth has anticipated an account of rising in infra spending and construction spending of the nation. New product launches expected in the MHCV space are anticipated to witness better traction. Introduction of a full range of LCV models (2.5 to 7 ton) through an investment of Rs.4 billion in the coming three years is expected to strengthen the product portfolio.
In H1FY19 Ashok Leyland’ market share in the MHCV has increased from 33.5% to 35%. On the basis of strong demand, buoyancy the competitive intensity driven by pricing is expected to reduce. This will work positively for Ashok Leyland.
JK Lakshmi Cement Ltd : Buy |LTP:Rs.288|Target Price:Rs.480
From 5.3MTPA to 10.7MTPA JK Lakshmi Cement had doubled its capacity since FY14. This is expected to further increase to an 11.3MTPA in FY19. JKL’s cost efficiency can be compared to that of the best companies in the industry. It has built a 7.5MW of waste heat recovery (WHR), and it is currently commissioning 20MW via captive power plant in FY19 on the east of its facility which constitutes about 25% of its total capacity. The management has estimated a cost saving of Rs180-Rs200/t converting into an impact of Rs.50-Rs.60/t on the estimated EBITDA/t. In FY19, JKL has significant headroom to grow.