Even as the ensuing Cricket World Cup 2019 assumes heightened focus, brokerage firm IIFL has come out with its dream portfolio of stocks which includes marquee names such as Reliance Industries, Bajaj Finance and HDFC Bank.
Even as the ensuing Cricket World Cup 2019 assumes heightened focus, brokerage firm IIFL has come out with its dream portfolio of stocks which includes marquee names such as Reliance Industries, Bajaj Finance and HDFC Bank. IIFL has created a well-diversified portfolio including opening batsmen, middle-order, all-rounders and bowlers and the wicket-keeper. According to the firm, the opening batsmen include “high alpha generators, thumping the new ball in the powerplay on sentiments and once they get their eye in, capitalising on early signs of a cyclical recovery.” Infra-giant Larsen & Tuobro as well as public lender SBI (State Bank of India) fit this bill. L&T, even in a challenging environment, has perfected its technique through a RoE & cashflow-focussed approach to merit a top order inclusion, said IIFL.
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“Its strong balance sheet coupled with a large order book (2.7x TTM sales) makes it conducive to an aggressive stroke-play towards efficiently executing complex and large projects,” said the firm in its report. In case of SBI, IIFL noted that the nation’s biggest bank is now back with much gusto, mainly buttressed by clarity on trends of stressed asset formation and imminent resolution in certain accounts in NCLT. The middle order includes HDFC Bank, Gujarat Gas and Deepak Nitrite.
“Coming in at number three, this is the rock and spine of the team. Sharing the characteristics of the middle order, IIFL said that these players could augment a good start and become high earners in a cyclical upturn. And, if the macros peg down the openers, these players would give stability and consolidation to build momentum and provide a late acceleration when fundamentals improve in the slog overs, said IIFL. “Though, of late, a slowdown in retail loans is being viewed as a chink in its armour, HDFC Bank’s strong operating efficiency and low cost of funds places it in the best position to navigate any bouncers,” said the firm in the report.
Among the bowlers of IIFL are Bajaj Finance, RBL Bank and Tech Mahindra. Bajaj Finance is among the world’s finest players, as in times when nagging regulations and conditions, with liquidity squeeze and various headwinds, have reduced its NBFC peers to bowling machines lying butchered all around the park, BAF has not deviated from its core strength, notes the research firm. The all-rounders include Reliance Industries and Tata Global Beverages. Equally dexterous with both, the bat and the ball, these players can lend the final momentum to innings and provide those crucial bowling breakthroughs, said IIFL. ICICI Lombard has been chosen as the wicket-keeper given that the disciplined conservative style making this player safe, as a house.