Monthly-Stock-Portfolio

Elite Wealth Advisors Ltd. released Monthly stock portfolio January 2020. Our stock market research analysts always recommends best stock picks to our clients for investing in share market. There are 10 best stocks in this month, for your better portfolio which are given below:

Monthly Stock Picks – January 2020

Company Recommendation CMP (Rs) Target (Rs) Upside

(%)

Time Horizon
Reliance Industries Buy 1536 1620 5 1Month
HDFC Buy 2457 2550 4 1Month
Hindustan Unilever Buy 1934 2050 6 1Month
Havells Buy 654 700 7 1Month
Axis Bank Buy 756 800 6 1Month
M & M Buy 541 580 7 1Month
Biocon Buy 296 320 8 1Month
JSW Steel Buy 276 310 12 1Month
L & T Buy 1342 1400 4 1Month
West Coast Paper Mills Buy 224 255 14 1Month

consider the prices as on 3rd Jan 2020 at 10am

Weightage of Investment (10 Lakh)

Company Amount (Rs) Weightage(%)
Reliance Industries 100,000 10%
HDFC 100,000 10%
Hindustan Unilever 110,000 11%
Havells 100,000 10%
Axis Bank 90,000 9%
M & M 120,000 12%
Biocon 80,000 8%
JSW Steel 110,000 11%
L & T 120,000 12%
West Coast Paper Mills 70,000 7%
Total 1000,000 100%

 

Reliance Industries Ltd:

CMP NSE/BSE Symbol MCAP (Cr) Sector Equity (Cr) Face Value Book Value Beta-Sensex
1536 RELIANCE/500325 973289.63 Refinery 6339.20 10.00 639.47 0.97

 

 

Reliance Industries Limited is engaged in refining, petrochemicals, oil and gas, organized retail, digital services and others.RIL achieved net sales of Rs 152149 crore in Q2FY20, an increase of 4% as compared to Rs 146018 crore in the corresponding period of the previous year. Increase in revenue is primarily on account of robust growth in Retail & Digital Services businesses which grew by 27% and 43%, respectively.This was partially offset by decrease in Refining and Petrochemicals segment revenue with 17.7% fall in Brent crude price. EBITDA of the company increased by 7.1% to Rs 23,169 crore from Rs 21,641 crore in the corresponding period of the previous year. Robust growth in contribution from Retail up 67% Y-o-Y and Digital services up 48% Y-o-Y led to increase in EBITDA. The Company continues to make major strides in its retail and digital services businesses led by focus on growth markets with offerings in the right product segments and compelling value proposition.Jio continues to be the most popular wireless broadband service provider in the country with its subscriber base increasing to355.2 million as of 30-September-2019.Net subscriber addition for the Company during the past twelve months was 103 million, which is the highest in the industry by a substantial margin.  It is noted, RIL achieved fastest growth in retail operations as their stores covering 24.5 million sq. ft of retail space (up 25% YoY) than all major organized retailers put together on account of continuous adding more brands to retail operations to enhance its revenue.RIL is aiming to list its consumer businesses Reliance Jio and retail arm Reliance Retail in next five years also the company is aiming to be net debt free by 2021 by raising funds and selling stake in various business. All of these steps by the company will contribute to the growth of the company.

HDFC Ltd.:

CMP NSE/BSE Symbol MCAP (Cr) Sector Equity (Cr) Face Value Book Value Beta-Sensex
2457 HDFC/500010 426412.81 Finance 345.81 2.00 724.84 1.17

 

 

Housing Development Finance Corporation Limited is engaged in financing by way of loans for the purchase or construction of residential houses, commercial real estate and certain other purposes, in India. The Company’s segments include loans, life insurance, general insurance, asset management and others.HDFC has registered 61% surge in the net profit to Rs 3961.53 crore in the quarter ended September 2019 (Q1FY2020), driven by dividend income and the profit on sale of investments on part stake sale of GRUH Finance of Rs 1627.09 crore.The company has maintained stable margins and spread, while improved expense ratio. The overall revenue growth of the company was boosted by dividend income of Rs 1074 crore in Q2FY2020 compared to Rs 6 crore in Q2FY2019, as dividend from HDFC Bank (Rs 865 crore) and GRUH Finance (Rs 70 crore) was received in the second quarter of the FY2020 as against the first quarter in the previous financial year.HDFC stands structurally strong to balance growth with quality. In retail loan business, HDFC has demonstrated capabilities with 15-16% YoY growth reflective of market share gains. Being market leader in housing finance (HFC) prime salaried segment, HDFC is well positioned to tap the high growth.

Hindustan Unilever Ltd:

CMP NSE/BSE Symbol MCAP (Cr) Sector Equity (Cr) Face Value Book Value Beta-Sensex
1934 HINDUNILVR / 500696 419573.06 Personal care 216.48 1.00 37.11 0.67

 

Hindustan Unilever Limited is engaged in fast-moving consumer goods business comprising home and personal care, foods and refreshments. The Company’s segments are Soaps and Detergents, Personal Products, Beverages, Packaged Foods, and Others.The Company reported a 21.2 per cent year-on-year growth in net profit to Rs 1,848 crore for the July-September quarter (Q2) of FY20.Growth was aided by lower corporation tax, which came into effect last month. Company has registered 6% growth in consolidated sales to Rs 10105 crore for the quarter ended Sep 2019 compared to Rs.9490 crore in the corresponding period of the previous year.Amidst a challenging market environment, the company has delivered another quarter of resilient performance and sustained margin improvement.Rural growth that used to be 1.4 times of urban rate is now about 0.5 times of urban growth rate. The deceleration of rural growth is much faster than urban growth. The focus on consumer value, excellence in execution and market development continues to serve the company well.The various measures announced by the Government and the Reserve Bank of India to spur investment and improve liquidity are welcome steps. Moreover the company is confident that the government will take all necessary steps for higher income transference to rural India. HUL remains well positioned to unlock the structural FMCG India opportunity while navigating the short-term challenges.

Havells India Ltd. :

CMP NSE/BSE Symbol MCAP (Cr) Sector Equity (Cr) Face Value Book Value Beta-Sensex
654 HAVELLS/ 517354 40940.02 Electric Equipment 62.58 1.00 68.01 1.16

 

Havells India Ltd (HAVL) is a leading player in electrical consumer goods in India. It is the market leader in light‐duty power distribution products. Its offerings include electrical products like circuit protection equipment (domestic and industrial switchgears), cables and wires, and consumer durables like fans, CFLs, and lighting fixtures.Havells Q2FY20 revenue grew by modest 2% YoY, led by consumer durables segment & Cable which grew by 20% & 7% YoY. Lighting & fixtures and Switch gears de-grew by 2% & 6% YoY. Weak construction sector demand on account of tighter liquidity situation in the sector and slowdown in industrial segment impacted these segments.Havells has gained market share in most of its categories even during a challenging environment. Over the outlook the company expects a better second half in this fiscal. Demand outlook remains benign, though H2 expected to improve on improved business efficiency.

Axis Bank:

CMP NSE/BSE Symbol MCAP (Cr) Sector Equity (Cr) Face Value Book Value Beta-Sensex
756 AXISBANK / 532215 213525.80 Private Bank 563.95 2.00 354.58 1.32

 

Axis Bank is the third largest private sector bank in India. The Bank offers the entire spectrum of financial services to customer segments covering Large and Mid-Corporates, MSME, Agriculture and Retail Businesses.Axis Bank has registered net loss of Rs 112.08 crore in the quarter ended September 2019 (Q2FY2020), driven by a one-time tax impact of Rs 2138 crore due to changes in corporate tax rate. Excluding this impact the net profit is showing jump of 157% to Rs 2026 crore from Rs 789.61 crore in Q2FY2019.The Net Interest Income of the bank has accelerated at 17% to Rs 6102 crore with NIM rising to 9 quarters higher of 3.51% in Q2FY2020. The bank has also posted 11% growth in fee income, led by retail fees rising 16%.The bank has continued to reduce GNPA and NNPA for the 6th straight quarter to 5.03% and 1.99%, as compared to 5.25% and 2.04% end of June 2019.Bank’s Capital Adequacy Ratio (CAR) has strengthened post capital raise: Common Equity Tier 1 ratio stood at 14.04% compared to 11.68% at the end of Q1FY20.During the quarter, the bank has opened 190 branches – highest in the last 24 quarters – to take the Bank’s overall domestic branch network to 4284. Branch banking continues to be an integral part of growth strategy. The bank now expects Net Interest Margin for FY20 to be higher than NIM in FY19 and bank reiterates medium term range of 3.5%-3.8% on NIM.The bank continues to expect its loan growth to be 5-7% faster than industry.

Mahindra & Mahindra:

CMP NSE/BSE Symbol MCAP (Cr) Sector Equity (Cr) Face Value Book Value Beta-Sensex
541 M&M /500520 66670 Automobile 595.8 5 365.37 1.39

 

Mahindra and Mahindra Limited is engaged in the manufacture of passenger cars, commercial vehicles and tractors. It is India’s 3rd largest passenger vehicle company and the 2nd largest commercial vehicle company. Mahindra & Mahindra Limited (M&M) is the flagship company of the Mahindra Group. The Mahindra Group has a leadership position in utility vehicles, information technology, financial services and vacation ownership in India and is the world’s largest tractor company, by volume.The company will also launch product in electric vehicle named electric KUV in 4QFY20 followed by C100 (last mile connectivity) to be launched in Q2FY21Q3FY21 and S201 electric SUV in Q1FY22-Q2FY22.The overall passenger vehicle is expected to remain weak in FY20 and the management expects it to decline to 5% in H2FY20 as against 23% in H1FY20. The management has reiterated the decline in tractor industry growth outlook from 5% to 7-8% for FY20. The UV segment is expected to see a positive growth in H2FY20 while the CV segment is expected witness de-growth of 25%.  M&M’s market share grew in all segments it competes in. In tractors, market share grew 1.5% and 0.6% in the PV segment. Overall UV segment (at industry level) will post positive growth in H2FY20 due to new launches. In SCV segment regained >50% market share, which had dipped in the past few quarters. M&M’s market share grew 7.2% to 7.8% in the PV segment.

Biocon:

CMP NSE/BSE Symbol MCAP (Cr) Sector Equity (Cr) Face Value Book Value Beta-Sensex
296 BIOCON /532523 35545 Pharmaceutical & Drugs 300.00 5 365.37 0.60

 

Biocon is India’s largest biopharmaceutical company that develops biotechnology therapies for disease. The Company is focused on developing, manufacturing and supplying novel and biosimilar pharmaceuticals for diabetes, cancer and autoimmune conditions.Biocon has four key businesses: biologic and novel molecules, branded formulations, small-molecule API and generic formulations and research services.The company has also set up additional manufacturing line for trastuzumab and Human insulin for USD0.10 per dose for middle and lower income countries.In-licensed early stage asset from Evotec—will develop, manufacture and commercialize the product, Evotec will receive milestones.Revenue growth led by generic formulations – primarily rosuvastatin, simvastatin and atorvastatin and API growth led by immunosuppressants.The 40% YoY growth was led by pegfilgrastim, adalimumab in EU, and trastuzumab in Ems. In pegfilgrastim, there is some shift from OnPro to PFS. Coherus already has 40% share in the vial market. Decline in share has been due to maximization of available capacity and Enhanced capacity could start showing better market share.

JSW Steel Ltd.:

CMP NSE/BSE Symbol MCAP (Cr) Sector Equity (Cr) Face Value Book Value Beta-Sensex
276 JSWSTEEL /500228 64440.5 Steel 241.72 1.0 152.55 1.45

 

JSW Steel is one of the largest domestic steel producer with an installed capacity of 18 million tonne per annum (mtpa). The Company is a part of the O.P. Jindal Group, manufactures iron and steel products. The company’s products include hot-rolled steel strips, sheets/plates, mild steel (MS) cold-rolled coils/sheets, MS galvanised plain/corrugated/colour-coated coils/sheet, steel billet, bars and rods.Company remains focused on capex projects (Rs. 48,715cr cumulative capex projected over FY18-21E). All development projects are on track to commission as per the schedule, including 5MTPA capacity expansion at Dolvi, capacity expansion at CRM-1 complex at Vijaynagar works and modernization-cum-capacity enhancement at downstream facilities of JSW Steel Coated Products. The Indian Government’s vision of increasing Indian steelmaking capacity to 300 MnT by 2031, JSW Steel envisions increasing its domestic capacity in India to 45 MnT over the same time period. The company expects steel demand to grow 5% in FY20 and should pick-up in H2FY20 on account of measures announced by Government. In the current challenging scenario, the declining trend seen in coking coal prices would act as a silver lining. This would aid steel spreads (EBITDA/tonne) to inch higher from Q2FY20 levels. The steel consuming sectors – construction, infrastructure, real estate, manufacturing, auto and Infrastructure is the focus area for the government.

Larsen & Toubro Ltd.:

CMP NSE/BSE Symbol MCAP (Cr) Sector Equity (Cr) Face Value Book Value Beta-Sensex
1342 LT /500510 188782 Engineering – Construction 1256.84 2 442.26 1.31

 

Larsen & Toubro Limited (L&T) is a leading engineering and construction company in India with a nationwide as well as international presence. It has interests in infrastructure, power, metallurgical & material handling, heavy engineering, shipbuilding, electrical & automation, machinery and industrial products and realty.Through its subsidiaries, associate companies and joint ventures, the group is involved in hydrocarbon business, IT services, financial services, and infrastructure development ventures.Total opportunity pipeline of Rs. 5.2trillion. This includes anRs. 4.5trillion infra opportunity, which is spread across verticals. Additionally, hydrocarbon – Rs. 400billion, MMMH – Rs. 100billion and heavy engineering &defence – Rs. 100billion.Net working capital continues to be elevated at 23% due to the stretched payment cycle amid a tough liquidity environment in addition to the vendors support policy.Revenue contribution yet to pick up for a few large projects, including coastal road projects. The rise in finance charges (part of operational expenditure) was due to growth in financial services business (higher borrowings) along with a 25–30bps YoY increase in finance cost.Staff cost increase on the back of Mindtree acquisition and augmentation in the service business (Rs. 12billion).EBITDA margin improvement reflects the stage of execution and job mix.Two large orders in the current year aided replenishment of the order book. Revenue decline of 54% reflects depleted opening order book.Other income includes dividend from a subsidiary amounting to INR6.75bn in Q2 (versus Rs. 4.2billion YoY) and Rs. 7 billion in H1 versus Rs. 7.9 billion YoY.  Average tax rate of 25–26% going forward at the company level.

West Coast Paper Mills Ltd.:

CMP NSE/BSE Symbol MCAP (Cr) Sector Equity (Cr) Face Value Book Value Beta-Sensex
224 WSTCSTPAPR/500444 1479.17 Paper & Paper Product 13.21 2 166.66 1.03

 

West Coast Paper Mills Ltd (WCPML), incorporated in 1955 is the flagship company of S.K. Bangur group. The company is among India’s top five paper& paper board’s manufacturer in terms of total capacity of 320000 mtpa. WCPML operates in two business segments; Paper/Paperboard (including Duplex Board) at Dandeli and Telecommunication Cables at Mysore.The sale of Paper and Paperboard was301931 MT during the year against 291512 MT in the last year i.e., higher by 10419 MT. Turnover during the year was Rs. 1851 Crores as against Rs. 1624 Crores (exclusive of excise duty) in the last year, i.e., higher by Rs. 227 Crores. The growth was driven by higher sales quantity and better realization. The EBITDA margin was 26.43% during the year.


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