Skip to main content

Four sectors, 20 stocks that look attractive after June quarter earnings

Even management commentary gave the market a confident outlook to withstand businesses against the COVID spread and its impact.

Prashanth Tapse

Looking beyond and after June quarter earnings, investors are now flocking to virus-resilient sectors in the market. And despite COVID-19 severely hampering economic activity, markets consistently surged on better-than-expected June quarter earnings and on hopes of COVID-19 vaccine. Indian investor sentiment was also boosted by domestic liquidity, which continued to drive Indian equities in tandem with global markets.

Even management commentary gave the market a confident outlook to withstand businesses against the COVID spread and its impact. With unlocking formulas supporting phased re-opening of economic activity, market started discounting the severity of impact of virus spread over businesses, going forward. But it seems like more businesses are dealing with coronavirus and markets have learnt to live with it.

Here are sectors which we believe investors should focus on and invest in after June quarter earnings session:

Life Insurance a sweet spot sector: Life Insurance Corporation (LIC) clocked a sharp 40 percent month-on-month growth in individual premiums in July and August, led by a jump in the sales of big-ticket pension and term assurance plans. We believe life insurance space in India has been gaining significant traction, with top private sector players delivering strong performances over the past two to three years. We expect private insurance companies like HDFC Life, SBI Life and ICICI Prudential Life could see the same traction in premium collection growth.

Defence sector stocks to be in action on the back of Atma Nirbhar Bharat boost: The procurements will focus on indigenous design and development. Platforms and equipment worth Rs 31,130 crore will be procured from Indian companies and they will be manufactured in India. In the last 5 years, India has spent Rs 3.5 trillion on import of defence items and expects the opportunities of Rs 4 trillion in next 5 years, hence defence stocks like Bharat Dynamics, Bharat Electronics, ZenTech, Cochin Shipyard, HAL and L&T are set to benefit.


The real estate sector can see a boost in the coming quarter: The Centre makes a countrywide effort to push affordable housing and Maharashtra is considering reducing stamp duty on real estate from 5 percent to 2-3 percent in order to give a boost to the industry. The government recently appointed a committee, under the chairmanship of HDFC head Deepak Parekh, to make recommendations to boost the sector. One of its recommendations was to cut stamp duty by 50 percent. Realty & building material stocks to be focused in coming quarters. We like Kolte-Patil, Godrej Properties, Sobha, Brigade Enterprises, Raymond, Ashiana Housing etc. Paints /Tiles stocks are also to follow the trend.

Government's move to build a better infrastructure sector: National Infrastructure Pipeline will ease COVID hit on the economy. Government has identified about 7,000 projects in different sectors that will be part of the National Infrastructure Pipeline. The National Infrastructure Pipeline will play a crucial role in resurrecting the country's economy from the impact of the corona outbreak and the country is going to spend more than Rs 100 lakh crore on this. Hence we are bullish on stocks such as Larsen & Toubro, Ashoka buildcon, Dilip Buildcon, KEC International and KNR Construction.

The author is AVP Research at Mehta Equities.

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com/SD Solutions advises users to check with certified experts before taking any investment decisions.

Source - Moneycontrol.com

Comments

Post a Comment

Popular posts from this blog

Panacea Biotech shares hit 5% upper circuit after dengue vaccine completes phase I & II study

DengiAIl induced robust neutralising antibody responses against all the four dengue virus serotypes, the company has said in an exchange filing. Panacea Biotech share price hit 5 percent upper circuit on the BSE on September 24 after the company completed phases I and II study of its dengue vaccine candidate DengiAIl. "Panacea Biotec Ltd. is delighted to announce the successful completion of its Phase I/II study to evaluate the safety and immunogenicity of its vaccine, DengiAll, a single-dose liveattenuated tetravalent vaccine," the company said in an exchange filing. Live-attenuated vaccines contain weakened bacteria or viruses that trigger an immune response but do not cause disease. The company said DengiAIl induced robust neutralising antibody responses against all the four dengue virus serotypes. DengiAIl has been found to be safe and well-tolerated with no serious adverse effects, the company said. After a single-dose, more than 80 percent of the participants ...
Post a Comment
Read more

Taking Stock | Profit-booking pulls Nifty below 14,450; Sensex drops 549 points

  All the sectoral indices ended in the red with IT and PSU bank indices falling 2 percent each. The market remained under pressure on January 15 on the back of profit-booking across sectors amid weak global cues. At close, the Sensex was down 549.49 points or 1.11% at 49,034.67, and Nifty was down 161.90 points or 1.11% at 14,433.70. "The market witnessed profit-booking and following global trends. Nifty continues to resist 14,600 and has taken a dip towards 14,360. If the market closes below 14,380 levels, we might see a correction till the levels of 14,180-14,200. Momentum indicators like RSI, MACD are indicating a small correction in the markets," said Ashis Biswas, Head of Research at CapitalVia Global Research. All the sectoral indices ended in the red with IT and PSU bank falling 2 percent each. Broader markets performed in line with the main indices with BSE Midcap and Smallcap indices falling 1 percent each. Tech Mahindra, GAIL, HCL Tech, Wipro and ONGC...
Post a Comment
Read more

Similar to 2020, D-Street is at record high ahead of Budget 2021; will history repeat itself?

  Experts are of the view that a repeat of 2020 or what happened in March might not be possible but some consolidation cannot be ruled out. Back in March when everyone wanted to write-off 2020 from their books, hope and liquidity supported markets and investor sentiment. Nobody thought that after touching a 3-year low in March 2020, benchmark indices would give double-digit returns by the end of the year. The S&P BSE Sensex and Nifty50 rallied by about 15 percent in 2020 and the big outperformance came from the small and midcap stocks. The rally is still continuing in 2021. The S&P BSE Sensex, which climbed Mount 49K, is up over 3 percent while the Nifty50 is up over 4 percent so far in January. Sensex scaling the 49,000-mark and Nifty50 touching 14,500 levels ahead of the Budget 2021 could make anyone cautious about the strength of the rally. Back in January 2020, both Sensex and Nifty touched fresh highs ahead of Budget, and then the market fell like a pack of cards. The ...
Post a Comment
Read more