Old fashion biggies or new game-changers?
What 10 stocks are investors betting on for the next big Indian bull run?
“You get recessions, you have stock market declines,
If you don’t understand that’s going to happen, then you’re not ready,
You won’t do well in the markets”
Peter Lynch
With the rapidly growing world and immersive new changes happening around every day, India has taken a new leap on the global level. From impacting large international summits like the G20, COP26 to quickly implementing citizen-level national schemes, India is developing at a faster pace than ever before. And the major contributor to this growth comes from the Business space.
Indian Business has evolved itself into an industry where not only better opportunities of employment are available to the existing workers but even freshers have newer areas of learning and moving forward with even better ideas. With business being the fifth invisible pillar of the biggest democracy in the world, the capital markets have a major role to play here.
The stock market, as Warren Buffett says is a device for transferring money from the impatient to the patient — so what you pick out from all the universe available to you is a generous mixture of luck with prudence and research.
Speaking of Research, recent trends in the share market have surely surprised even the most seasoned of us. Before Covid raised its head to the world in December 2019 (exactly 2 years ago), the Nifty was ruling at 12000 levels dropping to a sharp 8000 bottom by March 2020. And from thereon, it’s been a joyride.
Having almost doubled up to 16000 levels by August 2021 — investors were taken in by a pleasant swelling of their portfolio values as markets continued to thump victory on their backs.
More people came in looking at the other's winnings — and by October we saw the market peaking out at 18000. And therein lay the reminder that when the Chaiwallah starts to give stock tips, perhaps it’s time to cash out and run!
Ever since, markets have shown a different side of its joyride to its patrons — sliding down and hovering around 17000 levels for more than a month. Most new investors are now left scratching their heads!
Were they played?
Do stock markets really make money?
Was this all a game?
Should they start looking at exotics like Dog-named cryptos instead?
Well, that’s when the wise words of the old hands come into reckoning –
As the global markets are bracing themselves for news that unfolds along the Omicron Covid-19 variant, investors are seeming to get exasperated — desperately waiting for someone to come and steady the ship!
Well, that’s not coming. So, we decided to help our readers out with a compilation of the trends we have been reading around some of the biggest names in the bourses and also the newbies that have just made a grand entry with a splash!! (yes, we are comparing the Twin HDFCs to the Zomatos and the Nykaas here).
Come let’s ease you up with the exhausting exercise of picking out those perfect ten for your portfolio — this is not in-house research and recommendation. These are stocks that we have heard the experts say are the ones that will sail you through the next 10 years of your investment journey- perhaps even give you a meaty chunk of India’s next Big Bull Run!
Are you ready? Here goes-
- Federal Bank says Axis Securities and Rakesh Jhunjhunwala
Federal Bank has shown extensive growth in the past years, having shown a formidable profit growth rate. The increase on retail focus, strong fee income, adequate capitalization, and prudent provisioning could go in their favour. Given strong underwriting standards, changing loan mix, and strong retail deposit franchise, the bank’s valuation could improve from current levels if asset quality trends are maintained and ROA improvement keeps on track.
2. Dabur says Centrum Broking and ICICI Direct
Dabur certainly has proven to be a ‘stock worth investing’ in the big bull run over the past few years. Dabur India is one of India’s largest FMCG players with an age-old presence in Ayurveda based products. The FMCG sector has been a laggard and taken significant beating against its many peers. This could be an opportunity for investors in defensive sectors such as this and Dabur may have the potential to surge higher in the near as well as long term.
3. Divis Laboratories says Hem Securities
Pharma Sector has appeared to be the best-growing industry due to the obvious reasons during the global pandemic. Divis completed debottlenecking and expansion of plants which got delayed due to the pandemic. It has maintained a good dividend pay-out as well. Given its strong moat, healthy financials and leadership in the segment and the fact that the company has been building capacities in a few more niche APIs as per growing demand, this could be a long term growth opportunity for its investors as well.
4. Bharti Airtel says Goldman Sachs & ICICI Securities
Incorporated in the year 1995, Bharti Airtel is a Large Cap company having a market cap of Rs 420110.66 Crores. The stock offers high earning visibility and forecasts a decent CAGR for the wireless business. India business may generate more than $2.5 billion of annual FCF on an average for the next four years. And if you want a piece of the dynamic Indian Telecom sector, the preferred bet in telecom would continue to be Bharti.
5. State Bank of India says Jefferies and Axis Securities
SBI is one of the best PSU banks with a strong CASA reach and a well-built digital-banking platform. The stock has fallen 10 per cent from its peak but investors seem to be salivating at the drop calling it perhaps the right time to buy. The bank has done well in managing its asset quality, robust capitalization, strong liability franchise and if the trend continues to remain, this could be a good bet in the banking sector for investors to buy and hold.
6. Tata Consultancy Services Says Saurabh Mukherjea of Marcellus Investment Managers
As predictions and big investors’ analysis is saying, the IT sector is going to have a bright future in terms of market. And TCS is one of the big companies in the IT Industry. One can never go wrong with TCS with some research. The stock PE of TCS is less than the industry’s PE. Experiencing fantastic profit and sales growth in the past few years, TCS has an adequate dividend pay-out of 54.5% which makes it certainly investment-worthy.
7. SUN PHARMA says Sanford Bernstein
With a major part of the pandemic perhaps behind us, Pharma stocks seem to have cooled off in the past couple of quarters. FDA inspections in the US have also added to the concerns that the sector is experiencing. But by FY23, these concerns could be cooling off and companies like Sun Pharma that have moved the focus from generics to speciality could be doing really well. Apparently, Sun also has a product portfolio that is lesser exposed to the US generic pricing erosion for the same reason. Could be a reason for investors to buy and hold for sure.
8. Larsen & Toubro says Morgan Stanley
Strong policy, tech tailwinds; 5x capacity growth ahead — that’s the way Morgan Stanley
thinks the next couple of years are going to play out for players like L&T. For investors who prefer selective stock-picking over macro investing, cyclicals over defensives, and large caps over small caps, L&T could become the engine of global Capex and draw global clients for conventional IT projects around cloud, mobile, SaaS or even engineering R&D.
9. Tech Mahindra says ICICI Direct & Emkay Global
A large-cap IT bellwether incorporated in the year 1986, Tech Mahindra has provided Software Services to its clients for several decades now. It has remained fairly outperforming above its peer group and has beaten the benchmark return by a huge margin over the last 5 years. Despite delivering more than 200 per cent returns in the last 5 years, market experts are still bullish on the stock as it is a zero-debt company and potentially insulated from the rising global inflation. It is also expected to benefit from the country’s 5G roll-outs as it provides hardware infrastructure to telecom companies.
10. Ashok Leyland as per CLSA and Geojit
Domestic truck demand is likely to recover sharply over the next three years and who better to benefit from this trend than Ashok Leyland. The revival in freight demand, an improvement in truck fleet utilization levels and also a sharp increase in replacement demand for trucks, could well place the Heavy Commercial Major in an advantageous position for the revival of commerce and trade in the country.
As you watch these ten stocks carefully over the next couple of days, remember the market is forever throwing up opportunities for the long term. As ventures like Nykaa explode with massive success, there are the Paytm stories of going down the hill too.
It is always hard to say what the future holds for any business. What’s seemingly stable today, may become the epicentre of investor angst tomorrow. Keep reviewing your portfolio every once in a while, and ensure that you have regularly evaluated your plays without necessarily taking action every time something hits the news.
Investing is the right balance between knowledge, patience and action — do it right. We wish your portfolio all the best for the next Big Indian Decade!!
India’s data and demographic dividend — along with its proven technical proficiency — will make this decade the country’s “Techade”
India’s Prime Minister Shri Narendra Modi
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