1. Sensex may surge over 20% in 2016, top 10 investment options for you

Sensex may surge over 20% in 2016, top 10 investment options for you

Market experts believe 2016 is likely to be a continuation of the 2014 rally and benchmark indices can surge over 20 per cent in the next 12 months.

By: | Updated: December 28, 2015 12:51 PM
V-Mart Retail share price, Sensex, BSE, NSE

Domestic equity markets are going to settle the year 2015 with a negative return of nearly 5-6 per cent against massive gains of 30 per cent in 2014. (Photo: Reuters)

Domestic equity markets are going to settle the year 2015 with a negative return of nearly 5-6 per cent against massive gains of 30 per cent in 2014. This year, the BSE Sensex fell from 27,499.42 on December 31, 2014 to 25,838.71 on December 24. However, small and mid caps outperformed benchmark index this year. The BSE Midcap index and BSE Smallcap index gained 6.22 per cent and 5.80 per cent till December 24.

In 2015, sentiments remained negative following concerns over the US Fed rate hike, slowing growth in Chinese economy and falling crude oil prices. On the domestic front, doubts over the passage of important bills like GST and Land bills affected the market movement.

Market experts believe 2016 is likely to be a continuation of the 2014 rally and benchmark indices can surge over 20 per cent in the next 12 months. Angel Broking believes Sensex and Nifty can touch 31,500 and 9,500, respectively, in the next one year.

Rohit Gadia, founder and chief executive officer, CapitalVia Global Research, said, “As overall marco economic data are improving, reform initiatives being taken by the government, outlook of markets in next year will certainly be much better as compared to current scenario as from second half of FY16 companies should post better quarter results and we expect market to be favourable for investors to earn returns of around 20-25 per cent.

Espousing Gadia’s outlook, DK Aggarwal, chairman and managing director, SMC Investments and Advisors said, “Factors like cooling inflationary pressure, a pro-growth government and an economy relatively sheltered from a potential economic slowdown, is expected to support the sentiments of the market participants and it is expected that the market may witness 15-20 per cent growth in the year 2016.”

After speaking to stock market experts, we give a list of top 10 stocks that could be good investment options in 2016.

Bajaj Finserv
Recommended By: ICICIdirect.com
Why Buy: Bajaj Finserv, a financial conglomerate under the flagship brand of Bajaj and leadership of Sanjeev Bajaj has witnessed a sharp surge in earnings in all three key business segments. In general insurance, it is the most profitable and efficient player among competitors. Bajaj Finance, a niche consumer durable lender, reported a 4 times increase in loan book in FY11-15 and earnings surged at 38 per cent CAGR. The brokerage house expects consolidated revenue, net profit to grow at a CAGR of 12.9 per cent and 22.9 per cent to Rs 22,996 crore and Rs 2,551 crore, respectively, over FY15-17E. Post recent insurance FDI increase, life and general insurance are expected to trade strong, while dividend from them can be an upside risk. ICICIdirect has ‘Buy’ rating on the stock with targe price of Rs 2,308.

Jet Airways
Recommended By: ICICIdirect.com
Why Buy: The recent sharp fall in ATF prices (down over 40 per cent from peak of FY14) have provided significant room for margin expansion along with the growth opportunities for an Airline Industry. The Indian air travel market is highly under penetrated market, despite liberalising actions taken by the Government of India. India’s penetration of 80 per 1000 population is low relative to other developing markets such as Brazil, Turkey, Indonesia and China, where penetration rates are between 350/1000 and 650/1000 respectively. Considering these earnings growth lever, the brokerage house expects Jet Airways to gain market share along with the improved profitability over the next few years. Assuming the benefit of lower ATF prices, the company’s EBITDA margin to scale up to 11.3 per cent as witnessed in FY11 from 1 per cent in FY15. The share price of company can touch Rs 790 in 2016.

Asian Paints
Recommended By: CapitalVia
Why Buy: Overall trend of the stock is bullish, it is forming ascending triangle pattern in long term charts, it has resistance at the level of 893, with the crossing of the which , it may continue the positive run again. It is also moving above its 50 and 200 DMA, Support of 760 can be placed as stop loss in it.

LIC Housing Finance
Recommended By: Angel Broking
Why Buy: For companies like LIC Housing, the funding environment has eased; thus it will lead to lower cost of borrowing, while retail housing loan growth and outlook remains reasonably good. Despite competition in mortgages, volume growth in the individual loans segment remains fairly strong. LIC Housing continues to grow its retail loan book at a healthy pace with healthy asset quality. Angel Broking believes the company to post a healthy loan book CAGR of 18.7 per cent over 2015-17E which is likely to reflect in an earnings CAGR of 20.5 per cent, over the same period. The share price of LIC Housing Finance can touch Rs 571.

Radico Khaitan
Recommended By: Angel Broking
Why Buy: The IFML segment is under penetrated and leaves scope for growth for domestic liquor companies. Going forward, increase in income levels would lead to higher growth in IFML brands. The company has strong brands in the premium liquor category, which should lead to higher revenue for the company. We expect a significant hike in liquor prices in the coming financial year as there haven’t been any significant ones in recent times. The brokerage house has a ‘Buy’ rating on the stock with target price of and target price of Rs 156.

Recommended By: IndiaNivesh Securities
Why Buy: In 2014-15, the IT park and realty division delivered 89.6 per cent year-on-year revenue growth and contributed 40.6 per cent to the overall revenue. The brokerage house expects 15 per cent YoY increase in FY16E revenue and has ‘Buy’ rating on the stock with target price of Rs 1,896.

Camlin Fine Science
Recommended By: IndiaNivesh Securities
Why Buy: The company’s capacity expansion in Dahej‐SEZ should lead to significant reduction in sales‐to‐raw‐material ratio. Further, Europe subsidiary selling Hydroquinone (around 4,900 MTPA) in open market will result in higher realisation. As a result, the commencement of Dahej facility would have two‐ways margin expansion. As a part of its growth strategy, the company has progressed towards expanding its product portfolio in Food Ingredients and Industrial Products Divisions. On the same line, the company launched four new products (HQMME, MDB‐ Methylene, 1‐Chloro‐2,5‐DImethoxy Benzene, and MDB‐Methyelen) in FY16. Given the cost and quality advantage, the brokerage house expects these products to gain sizeable market share and likely to deliver higher revenue growth over near-to-medium term. IndiaNivesh believes the share price of the company can touch Rs 136 in 2016.

VA Tech Wabag
Recommended By: ICICdirect.com
Why Buy: VA Tech Wabag (Wabag) is a leading MNC in the water treatment space (water desalination, sewage water treatment, waste water treatment, etc), with a global presence. The company operates on an asset light-EPC led model in water treatment projects across municipal and industrial segments, where it focuses on design and engineering while outsourcing civil construction and erection jobs. Wabag has executed over 2,250 projects till date and has a market share of 14 per cent in the Indian markets. The management has maintained its guidance of 20 per cent growth across order intake and revenue for FY16E. The brokerage house has a ‘Buy’ rating on VA Tech Wabag shares with target price of Rs 830.

Recommended By: CapitalVia
Why Buy: The over all trend of the stock is bullish and currently stock is consolidating at the higher level with positive sentiments.

Godrej Properties
Recommended By: SAMCO Securities
Why Buy: Godrej Properties is efficient growth oriented company with manageable debts having diversified portfolio across top cities in India. The company works on asset light model which generates superior returns for the shareholders.

Disclaimer: The stocks are recommended by the respective brokerage houses and not a recommendation from Financial Express online).

  1. K
    K N.
    Jun 19, 2016 at 12:14 pm
    We should not make much noise on Mr Raghuram Rajan exit. Are the India is empty of economist and wisdom people. A lot of other talented people is available and they will do much better to Rajan. I do not say that Rajan work is not appreciable. Undoubtedly every loyal Indian on such a higher posts want to do his best and Rajan has done his best. Not let others to do their bests. At all the new entry like Virat in Place of Schin has done much better Batting. So keep calm and let God do best for India.
  2. R
    rajat jindal
    Apr 30, 2016 at 9:09 am
    icici market share will incease around 260 in may month

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