Even the worst of bull markets have given investors certain stocks with the ability to outshine the gloomy markets.
Even the worst of bull markets have given investors certain stocks with the ability to outshine the gloomy markets. Similarly, the fall in equity markets this year that saw the S&P BSE Sensex and the 50-stock Nifty tank almost 40% has thrown up opportunities that can help investors jump figure out market leaders once bulls return to Dalal Street. Research firm ICICI Direct, in a recent report, listed out seven stocks that are being favoured by the equity markets in the current environment and are likely to generate above-normal returns for investors in years to come.
“Historically, post three major corrections of 1997, 2000 and 2008, stocks which outperformed during the initial base formation phase, turned out to be leaders of the next bull market and generated multifold returns in following three years,” ICICI Direct said. The stocks have been picked from a universe of 918 stocks listed on the NSE.
The stock has completely retracted its immediate previous decline and has registered a trendline breakout on the technical charts. Britannia, one of the leading biscuit manufacturers in India could also benefit from the coronavirus pandemic that might shift consumers to packaged foods instead of loose products, according to ICICI Direct. “The company is well-positioned to maintain its leadership in the branded biscuit category, where the company enjoys around 33% market share in the biscuit market size of 35,000 crore branded biscuits category in India, the report said. Britannia Industries’ share price has jumped 61% since the last week of March.
Sanofi remains one of the fastest-growing companies in India in antidiabetic therapy. Its top five brands posted a cumulative revenue CAGR of ~14% (CY15-19), leading their combined contribution to the company’s domestic sales to grow from 44% to 54% over December 2015-19, according to the report. The stock saw a sharp 20% correction in the month of March, however, since then it has jumped close to 34% till date.
Larsen & Toubro Infotech Ltd
“The stock has been one of the major outperformers within technology space and has seen a decent recovery over the past nine weeks from March 2018 lows,” ICICI Direct said. The information technology major has a diverse client portfolio ranging from banking, manufacturing, utilities, and pharmaceuticals. “In the near term, we expect the company to face headwinds in terms of pricing pressure, lower discretionary spend and delay in deal ramp ups. However, we expect LTI to see a revival in H2FY21E based on ramp up in deals won and recovery in troubled verticals, the report said. L&T Infotech has jumped 38% since the last week of March.
Investment by Avenue Supermarts Radhakishan Damani has sent the stock price surging higher and higher but that is not all for the scrip. “The stock has generated a resolute breakout above the last 12 months consolidation range (| 115-68) signalling a resumption of fresh up move and offers fresh entry opportunity,” technical analyst at ICICI Direct said. India Cements is among the leading players in South India with an installed capacity of 15.5 MT spread across South India, with major markets being South India, followed by West and East. The company’s plans of expansion have been put on hold which will let the firm focus on debt reduction.
(The stock suggestions are by the abovementioned brokerage or research firm and not by Financial Express Online. Please consult your investment advisor before investing.)