Midcap index hits all-time high; Equitas Holdings, Bajaj Electricals among 5 stocks to buy

By: | Published: July 11, 2016 10:46 AM

At 10.34 am, Sensex was trading 469.27 points up at 27,596, while NSE Nifty was trading 131.40 points up at 8,454.60. Midcap was trading 162.37 points up at 12042.74.

Midcap index at record high; Equitas Holdings, Bajaj Electricals among 5 stocks to buyAt 10.34 am, Sensex was trading 469.27 points up at 27,596, while NSE Nifty was trading 131.40 points up at 8,454.60. Midcap was trading 162.37 points up at 12042.74. (Express photo)

Benchmark Sensex jumped over 450 points to trade over 10 -month high of 27,612.86 and the NSE Nifty reclaimed the 8,400-mark in early session on Monday amid firm Asian cues. BSE Midcap index also touched its all-time high of 12042.81 with all the stocks in the index were trading in green except 7, which were in red.

At 10.34 am, Sensex was trading 469.27 points up at 27,596, while NSE Nifty was trading 131.40 points up at 8,454.60. Midcap was trading 162.37 points up at 12042.74.

Indiabulls Housing Finance Ltd, Jindal Steel, Shriram Transport Finance Company Ltd, Cadila HealthCare, Bank of India and Alstom T&D were among the top gainers in the midcap index.

According to Nirmal Bang Institutional Research,”In the wake of improving demand, better monsoon and stable commodity prices, we expect the companies in our mid-cap coverage universe to post moderate revenue, operating profit, net profit growth of 11 per cent, 15.4 per cent and 16.5 per cent, respectively, for the June 2016 quarter. Taking into account the current economic environment, Arvind, CCL Products, Crisil, Greenply Industries, ICRA, Kajaria Ceramics (KCL) and Supreme Industries are expected to post a good performance, while Bata India, Credit Analysis & Research (CARE), La Opala RG (LORL) and V-Mart Retail (VRL) are likely to report a weak performance.”

Below are 5 midcap stocks on which brokerage houses are looking bullish

Bajaj Electricals
Recommended by Angel Broking
Target Price: Rs 268
Why Buy: The company is among the top four players in the consumer durables segment. Improved profitability backed by turn around in E&P segment will support sentiments toward Bajaj Electricals. The company has strong order book which shows earnings visibility from here onwards. Bajaj Electricals shares were trading at Rs 247 in the morning trade on July 11.

Equitas Holdings
Recommended by Angel Broking
Target Price: Rs 235
Why Buy: Equitas Holdings has strong loan growth backed by diversified loan portfolio and adequate CAR. Return on equity and return on assets are likely to remain decent as risk of dilution remains low. The company has attractive valuations considering growth opportunities. Shares of Equitas Holdings were trading at Rs 183.30 on Monday.

Siyaram Silk Mills
Recommended by Angel Broking
Target Price: Rs 1,347
Why Buy: The company’s strong brands and distribution network would boost growth going ahead. Shares of Siyaram Silk Mills currently trades at an inexpensive valuation. Stocks of the company were at Rs 1098 in the morning trade on July 11.

Lakshmi Machine Works
Recommended By: Nirmal Bang Institutional Equities
Target Price: Rs 4,688
Why Buy: The brokerage house expects the company may report YoY revenue growth of 7.4 per cent.This will be driven by lower base of the year-ago period, strong domestic orders amounting to Rs 2,400 crore and short-execution cycle export order enquiries to the extent of Rs 230 crore witnessed by textile machinery division as of end-March 2016, and spurt in sales of machine tools division led by strong revenues registered in April 2016. Nirmal Bang expects Lakshmi Machine Works to start getting a share of profits from its real estate joint venture from 1QFY17. Revenue growth coupled with expansion in EBITDA margin, flat tax rate and marginal growth in depreciation may translate into 14.6 per cent YoY growth in net profit to Rs 50.3 crore. The scrip was trading at Rs 3880 in the early trade on Monday.

Timken India
Recommended By: Nirmal Bang Institutional Equities
Recommended By: 650
Why Buy: Nirmal Bang expects YoY double-digit revenue growth run-rate for the past nine quarters to continue in 1QFY17 as well. This will be mainly on account of strong volume growth posted by higher tonnage commercial vehicles or medium and heavy commercial vehicles where the company has a strong presence. PAT is likely to register YoY growth of 25 per cent mainly on account of the absence of exceptional expenditure. Shares of the company were trading at Rs 558.75 in the morning trade on Monday.

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