With the New Year just a few days away, CNBC-TV18 decided to bring you some great stock ideas for your portfolio in 2020. On CNBC-TV18 Special 20 Big Little Stocks, we have Dipan Mehta, founder and director of Elixir Equities with his top 5 stock ideas for the year 2020.
Dipan Mehta is a well-known expert on Indian stock markets and is a frequent commentator on all leading news channels and print publications.
Mehta’s stock recommendations for the year 2020 are:
Speaking about Amber Enterprises, Mehta said, "It is one of the largest contract manufacturers for ACs and AC components and most of the leading air conditioning companies are its clients. Available at about 23-24 times trailing 12 months given the kind of growth prospects this company has got, it can easily delivery 15-20 percent type of return over the next 12 months or so. Very positive on that specific company and it is a good play on the consumption story."
On L&T Finance Holdings, he said, “Being part of L&T Group, the company has been able to raise resources very easily, as we saw the success of their debenture issues recently. L&T Finance is not just auto finance or not just housing finance, it is into almost everything, it is into all the segments of the lending, it is going down the line trying to lend the retail level which is safer than the wholesale level or so. I feel it should be traded at a much higher PE multiple and earnings growth will also come into play so very positive on that stock."
While giving his take on NBCC, Mehta said, "The best company may not be the best investment, it is out of favour with the investors. however, a lot of the government departments who are its prime customers is in favour with them. With Rs 80,000 crore order book position, Rs 4,000 crore of cash against Rs 6,000 crore market capitalisation, it is just a matter of time. So you need patience in this stock, it is a matter of time before all these orders start to contribute. We are looking at 24 percent above compound return over a three year period in NBCC."
Talking about Quess Corp, he said, "The management has done very aggressive acquisitions because of which the topline has grown. However, lot of having got wiped out in interest and depreciation. Going forward, they are going to be extremely conservative as far as new acquisitions are concerned. A lot of their demand comes from the new-age business so to an extent it is a nice growth trajectory for them. It is a nice secular growth story."
On Aster DM Healthcare, Mehta said, "We are positive on the hospital space per se and spending on healthcare is non-discretionary spending and a globally it is going up and in India as well. Aster DM Healthcare is an asset-light business model and the fact that the company got a massive position in the UAE region, where they have hospitals, clinics and pharmacies. Very high return ratios per se and available at a reasonable valuation as compared to some of the other hospital companies. For the first time, this September quarter, the India business turnaround and posted positive EBITDA. So typically hospitals are long gestation businesses so they have done a lot of expansion within India and the Gulf region. Now, all those expansions are now starting to contribute materially to the topline and bottom line. So I think earnings in the next 2-3 years will really grow at a compound rate of 15-20 percent or so and again a stock available at a reasonable valuation about 20-24 times trading 12 months."
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