- Date : 18/12/2018
- Read: 5 mins
Planning to invest in stocks this New Year? Get some expert advice!
Defining a good stock is easy but identifying one in advance can be tricky. The main reason is the unpredictability of the stock market and the economy in general. Nevertheless, experts have an eye for promising shares and are able to identify stocks that are expected to rise in the days to come.
We have for you 8 stocks that are showing good long-term prospects and have already started a buzz in the market with signs of promise. This is not an exhaustive list; their performance is subject to future ups and downs in the market.
They are listed below in no particular order:
1. South Indian Bank – SIB surprised many with its Q2 results when its current account and savings account ratio went up by 11.5% in one year. During this period the deposits also increased by 11.6%, as did the net profit. With a decent dividend yield and P/E ratio, this is a good share for the long term. The price per share has been fluctuating between Rs 12 and Rs 34 and is recovering after a fall since October 2018. The bank emphasises its retail presence and aims to increase the push towards more housing and mortgage loans. It is setting up branches and processing centres, and also has a special cell to regularly track its non-performing assets.
2. Indiabulls Real Estate – This has a significant presence in real estate development and office rentals, which is set to bring in sizeable sales revenue and rental income. Their development portfolio under construction is valued at around Rs 28,000 crore, while office rental portfolio under development is over Rs 500 crore. Theirs earning per share has improved year-to-year when compared to Q2 last year. Boosted by a JV with Blackstone, Indiabulls is looking to increase its annuity revenue to the tune of Rs 4600 crore by 2022. And with a rise in net profits from Rs 61.6 crore to Rs 75.9 crore in the year-to-year comparison, Indiabulls Real Estate can be a good long-term investment. Its shares went from Rs 50 to Rs 250 in 2016-18 before a major decline this calendar year.
3. Manganese Ore India Ltd (MOIL) – This is a government-owned mini-Ratna company that is engaged in the mining of manganese ore. It is a debt-free company that is generating solid income in the wake of the rise in demand for manganese. It is planning a capacity expansion and expects to double it by 2021. MOIL is the market leader in manganese ore and is in a risk-free business. For this year’s first quarter, it posted an impressive profit of Rs 113 crore on revenues of Rs 313 crore and yielded an EPS of Rs 4.40 for the said quarter. There are high hopes on its future EPS, mainly due to its expansion plans and the demand for the metal. Increase in its turnover only supports this hope and therefore MOIL seems like a good long-term investment at Rs 182 per share. It was around Rs 100 per share three years ago but rallied to up to Rs 260 before falling steeply this year.
4. Titan – Tata’s footprint in the jewellery, accessories, and eyewear sector, Titan has a presence in 32 countries. It has added to its number of stores, and customer acquisition is expected to increase due to increased presence and brand value. Besides this, the consumption pattern in jewellery is shifting from investment to fashion, thus increasing the demand for these products. Titan’s results for the previous financial year and this year’s Q1 have exceeded market expectations and it is a good long-term buy for the New Year. Titan was trading below Rs 400 for a long time before a swift rise in 2017; it hasn’t fallen below Rs 730 in the past year.
5. Indian Energy Exchange Ltd (IEX) – This acts as a platform for the physical trading of electricity for power producers and consumers. It controls a near-monopoly market with a whopping 95% market share in exchange-traded electricity. In the last quarter, IEX recorded 17% growth in day-ahead market (essentially, power trading for the next day) when compared year-to-year. Power distribution companies are showing a preference for trading through the exchange, which is good news for IEX. Besides, a push for 100 GW of renewable energy by 2022 puts IEX in it for the long run. A new entrant in the stock market, IEX’s shares generally stay in the range of Rs 140-180.
6. Graphite India – From less than Rs 100 two years ago to touching Rs 1000, Graphite India’s share price may seem as if it has peaked already. There was a sharp decline in exports from China, which raised the stock of domestic players like Graphite India. It has a well-settled domestic market and a good presence in the US, Europe, Middle East, and southeast Asia. It is expanding into value-added graphite and carbon products, and recently acquired a 46% stake in the US-based Graphene Corp. Apart from good future plans, the present seems strong for Graphite India due to supply constraints keeping the price of its flagship product (graphite electrodes) high. It suddenly rose from below Rs 100 to reach Rs 1100 before coming down to its current rate of Rs 860 per share.
Related: All about IPOs in India
7. Biocon – Being a well-settled and well-known biopharma player, Biocon has a strong presence in drug development and innovations, manufacturing, biologics and in the generic drug business. It is the largest biologics company in India and has made an early foray into the biosimilar business, which shows long-term promise in the company. Its venture Biocon-Mylan is readying to launch biosimilar products for the US and EU market, which should strengthen its profitability in the days to come. Its strategic manoeuvres in the global biosimilar market make it a good stock to hold for the long term. Biocon shares used to be under Rs 200 but they rose continuously in mid-2016 and stayed above Rs 500 per share ever since.