Indian market continued its record-hitting spree for the fifth consecutive day in a row for the Sensex and second consecutive day in a row for the Nifty.
The S&P BSE Sensex hit a fresh record high of 37,327, while Nifty50 hit a fresh record high above 11,200 at 11,253 in the morning session.
Experts advise investors to stay with stocks which are seeing good earnings momentum in June quarter and could carry forward in the following quarters as well.
"It is redeeming to see the Nifty and the Sensex cruising at all-time highs, something we predicted quite early in Jul-18. New highs have come about on the back of sustained inflows into mutual funds. This asset class has replaced FIIs as the prime movers of the markets," Dhiraj Relli MD & CEO HDFC Securities told Moneycontrol.
"Earnings are also catching up. The Nifty earnings, which grew at a CAGR of 3 percent between 2013 and 2017, increased by 8.5 percent in FY18, and this year they are likely to be in high teens. This should make the valuations look comfortable," he said.
Here is a list of top 10 stocks from various brokerage firms on which they either have a buy or an outperform rating and could give 4-45 percent return in the next 6-12 months:
ITC: Outperform| CMP: Rs 287.15| Target raises to Rs 360 from Rs 350| Return 25 percent
Credit Suisse maintains an outperform rating on ITC post Q1 results and raised its 12-month target price to Rs 360 from Rs 350 earlier. The cigarette business is seeing a revival, and a potential re-rating could start playing out for the stock in the near-term. The Q1 net profit was ahead of estimates, and EBITDA growth highest growth in nine quarters.
Bharti Airtel: Buy| CMP: Rs 357| Target: Rs 520| Return 45 percent
UBS maintains a buy rating on Bharti Airtel with a target price of Rs 520. The Q1FY19 was a respectable performance amidst a tough environment.
Africa momentum remains strong with revenue growth and margin improvement. Bharti Airtel has managed to hold its market share better than peers.
Shriram Transport: Overweight| LTP: Rs 1,409| Target: Rs 1700| Return 20 percent
JPMorgan maintains an overweight rating on Shriram Transport post Q1 results with a target price of Rs 1,700. The net profit was driven by loan growth and a sharp reduction in credit cost helped the company.
INDAS accounting shifts beneficial to both EPS & BPS. Loan growth at 22 percent running is above forecast. Increase in axle load norms is likely to improve earnings of core customers.
L&T: Overweight| CMP: 1306| Target: Rs 1,600| Return 23 percent
JPMorgan maintains an overweight rating on L&T post Q1 results with a target of Rs 1,600. The Q1 big picture looks good. Consolidated top-line was a beat, led by service businesses.
Core EBITDA bogged down by large provisions and impairment. The Realty business was a drag on 1Q results.
Jubilant FoodWorks : Buy| CMP: Rs 1,397| Target: Rs 1900| Return 36 percent
CLSA maintains a buy rating on Jubilant FoodWorks post Q1 results but raised its target price to Rs 1,900 from Rs 1,575 earlier. The reported a big beat in June quarter once again. It reported strong SSSG despite a decent base.
The gross margin was steady despite the extension of the Every Day Value. The stock has some more upside left even after posting a strong rally in the last 12 months.
L&T Technology Services: Buy| CMP: Rs 1,521| Target: Rs 1,750| Return 15 percent
CLSA maintains a buy rating on L&T Technology Services post Q1 results with a target price of Rs 1,750. The June quarter witnessed a stellar revenue growth but the margin was a miss.
Large deals are ramping up for the company. The pipeline is healthy and client mining remains strong which is a positive sign for the company. Secular growth and cyclical recovery story intact said the CLSA note.
Yes Bank: Buy| CMP: Rs 369| Target: Rs 469| Return 27 percent
Reliance Securities maintains a buy rating post Q1 results with a target price of Rs 469. Yes Bank is making sustained progress towards building a strong retail franchise, which we believe would strengthen its balance sheet and boost earnings.
Further, a detailed study of loan book indicates that the Bank has been able to manage the issues on asset quality front effectively. Notably, the Bank raised capital to support its aggressive growth plan over the next 2-3 years.
Looking ahead, the global investment bank expects the Bank to sustain continuous improvement in operating metrics led by dwindling headwinds on asset quality front and improving balance sheet growth, especially in the Retail segment.
Marico: Buy| CMP: Rs 363| Target: Rs 420| Return 15 percent
BofA-ML maintains a buy rating on Marico post Q1 results with a target price of Rs 420. The Copra prices on a likely cyclical downtrend which helped the company to post better results.
BofA-ML expects healthy earnings revival. The key positives are receding RM pressure, revival in rural demand and market share gains under GST. Marico is better placed among staple in terms of valuation.
Bajaj Finance: Overweight| CMP: Rs 2683| Target: Rs 2800| Return 4 percent
JPMorgan maintains an overweight rating on Bajaj Finance post Q1 results with a target price of Rs 2,800 from Rs 2,683 earlier. Solid earnings growth was driven by loan growth and opex performance.
INDAS transition impacts earnings and book value growth. According to the global investment bank, the company is set to deliver another 30 percent earnings growth for the year. It remains a top pick in the NBFC space.
Crompton Greaves Consumer: Buy| CMP: Rs 240| Target: Rs 280| Return 16 percent
Edelweiss maintains a buy rating on Crompton Greaves Consumer post Q1 results with a target price of Rs 280. Crompton Greaves Consumer (Crompton) posted results in line with estimates driven by its strategy of faster bottom-line growth than top-line expansion.
The management is confident of delivering 10–15 percent overall growth with sustained OPM improvement led by better cost control/rising share of premium revenue even as it executes the Go-To-Market (GTM) strategy, which is showing early-stage benefits (in the west region). The target of Rs 280 is based on reasonable earnings/cash flow CAGR of 21/25 percent over FY18–20E and huge potential to expand the target market versus peers.
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