Stocks with strong fundamentals to buy for 2018

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Srilata Rao
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Stocks with strong fundamentals to buy for 2018

Post by Srilata Rao » Fri Dec 29, 2017 11:53 am

As per moneycontrol.com, here is a list of stocks handpicked by experts from the midcap space which could turn out to be serious wealth creators in the next 2-3 years:

Analyst: D.K. Aggarwal, Chairman and Managing Director, SMC Investments, and Advisors

Ahluwalia Contracts

The strong order backlog, combined with proven execution capabilities and low-geared balance sheet, would help the company to deliver healthy growth in the foreseeable future.

The government’s increasing focus on the construction industry is expected to generate better order flows going forward. The Management is planning to reduce its debt and expects the Company to be debt-free in the coming years. This improving balance sheet position is expected to increase profitability levels, going forward.

MindTree

The company has positioned itself as a comprehensive solutions provider. As per management of the company it has the capability to create opportunities to cross-sell its R&D engineering services to its clients and also supplement its IT services capabilities.

The Company’s overall strategy of achieving industry-leading growth through deep domain expertise in chosen verticals combined with technical depth, customized for clients remain the same.

An enviable client list and a fantastic leadership team are two clear advantage areas for Mindtree and plan to leverage them to engineer meaningful technology solutions to help businesses and societies flourish.

Monte Carlo Fashions

The Company holds a very good standing among the buyers regarding its winter wear collection. The brand has been launching various collections from time to time to keep its customers ahead in the fashion lane and enjoys an enviable position among all apparel brands in the country.

The management is planning to expand the product range to be recognised as an all-season apparel brand and increase footprint across the country.

Techno Electric & Engineering

Techno Electric & Engineering Company is a provider of engineering, procurement, and construction (EPC) services to core sector industries in India. The management of the company is confident of the company’s potential to expand the EPC segment on the back of capex revival, led by PGCIL and SEBs, with strong visibility of traction in the order book.

In FY18, the management has said that it would focus on the closure of projects, which it believes will prune retention money and improve working capital cycle.

Elgi Equipments

The company’s growth plans entail an investment of Rs 5,000 crore over the next 10 years. It is planning to double its turnover in the next three years, betting big on exports and localising products in markets like the US and Europe.

Company’s performance in the international markets contributed significantly to the top line and ensured overall growth. The company was able to maintain sales and the growth in volume had enhanced profitability.

Analyst: Mustafa Nadeem, CEO, Epic Research

NCC

NCC is one of the stock that has been advised by us to our clients a few weeks back and we continue to be overweight in the sector as well as stocks since prospects look bright for next 2 - years. We expect over 25 percent appreciation from present levels.

Titagarh Wagon

This stock is looking attractive since there is an overall theme at play and we prefer this in Infrastructure space with a time horizon of 2 -3 years.

DLF

We have recommended this stock earlier as well and remain bullish for next 2- 3 years till 2020 keeping reforms and implementations of policies that will have a huge benefit for this stock. With REIT coming into action DLF may be the biggest beneficiary given its presence across India.

Bodal Chemical

This stock is continuously outperforming the fact that chemical space may continue to do well. The margins have improved drastically with an increase in top line and improved bottom line.

From two digit to three digits and at present levels as well we expect it to appreciate 20 percent and outperform overall space for FY19.

Brokerage Firm: Prabhudas Lilladher

Capital First (CAFL):

CAFL continues to grow non-LAP and in new product segments like used cars & salaried personal loans. Overall asset under management (AUM) growth improved to 28 percent on a YoY basis with retail growing over 33 percent YoY.

We expect risk-adjusted margin to further move up as mix changes towards higher IRR based lending as it continues to scale up and we believe it is on track to achieve 16 percent return on equity (ROE) in FY19 & 17.5 percent in FY20E on back of PAT CAGR of 34 percent over FY17-FY20E.

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