Investors, at home and abroad, will have their eyes fixed on Finance Minister Nirmala Sitharaman today as she presents the Union Budget 2019. Market participants will be marking her words to bet on sectors likely to benefit from this year’s policy decisions. Ahead of the budget announcement, here are the top stock ideas by the country’s leading brokerage and research houses:
1. Hindustan Unilever Ltd (HUL)
Chola Securities suggests investors to buy the HUL stock for a target price of Rs 1,900. The brokerage house says HUL is focusing on driving volumes by realigning its pricing in a slow demand environment. There is continued visibility on improvement in operating profit margin as GST-linked supply-chain reorganization is expected to continue over the next 4-6 quarters.
2. Dabur India
Chola Securities suggests investors to buy the Dabur India stock for a target price of Rs 440. Dabur is expected to report 10.9% CAGR (compounded annual growth rate) in revenue over FY18-21 while profit after tax (PAT) is expected witness a CAGR of 12.5% over the same period. The company has a very strong distribution network, which caters to around 6.3 million retail outlets.
3. Larsen and Toubro (L&T)
Brokerage house Stewart and Mackertich suggests investors to buy the L&T stock for a target price of Rs 1,800. The brokerage house says it is evident from the BJP’s election manifesto that infrastructure development will be a major goal and government is likely to spend $1.4 trillion for that purpose which is expected to get further push in the upcoming budget. Being the largest player in that space, L&T is likely to avail the benefits of a major chunk of that amount, pushing up its revenue and profitability.
4. Mahindra and Mahindra (M&M)
Stewart and Mackertich suggests investors to buy the M&M stock for a target price of Rs 720. The The brokerage house says NBFC-led liquidity crunch and poor consumer sentiment have slowed the auto sales significantly in India. So a stimulus to boost the sales is highly expected in the upcoming budget and being a major player with a widely diversified product portfolio in the Indian auto space, M&M is likely to benefit.
5. Siemens
Stewart and Mackertich suggests investors to buy the Siemens stock for a target price of Rs 1,340. Union Budget 2019 may witness stimulus in the Railways and Infrastructure sector. Siemens being a key player in the railways and infrastructure development may be beneficiary of this budget.
6. Supreme Industries
Stewart and Mackertich advises investors to buy the Supreme Industries stock for a target price of Rs 1,200. The government is targeting piped water supply ( ‘Nal Se Jal’ Scheme) to all homes by 2024. In this Budget 2019, there may be some announcement for implementation of the scheme. So, the demand of PVC and CPVC pipes is likely to grow significantly. Supreme, being one of the key players in this segment, may find demand boost up.
7. UltraTech Cement
Chola Securities advises investors to buy the UltraTech Cement stock for a target price of Rs 5,200. The brokerage house says Ultratech’s strong free cash flow generation can help in significant debt reduction over the next two years that could help drive the stock performance. Moreover, renewed demand is likely to be driven by an increase in infrastructure spending and rural and affordable housing (under Pradhan Mantri Awas Yojna) projects.
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