Which Stocks to Add When Free Fall Continues on D-Street? Investors tightened their grip on the Indian stock markets on Monday on fears of aggressive interest rate hike. Data showed US inflation hitting a 40-year high at 8.6 per cent in May, weakening the “inflation peak” story and opening doors for further aggressive Fed rate hikes. BSE S&P Sensex fell 1,400 points to 52,860 level, while Nifty 50 broke below 15,700 level on Monday, June 13.
According to Nomura India, “Friday’s month-on-month core CPI print in the US means that the peak-inflation narrative, delayed for now, is likely to remain on a hawkish trajectory until the Fed shows monthly inflation sequentially. Clear signs of recession.”
The FOMC will be the main event in the coming week, where our economists are looking for a 50bp increase and Chair Powell is indicating a fourth 50bp increase in September.
Siddharth Sedani – Vice President, Equity Advisory, Anand Rathi Shares & Stock Brokers, said: “Two things have been affected India Inc.’s Profitability. One, increase in interest rates, and second, increase in input costs. The former has cast a heavy shadow on companies that borrowed heavily. Those with little or no debt on the books will survive the storm. With uncertainty around interest rates expected to remain for some time, it would make more sense for investors to stay in stocks with zero or low debt. When interest rates are rising, servicing debt becomes increasingly expensive and it eats into the company’s profits, in such a scenario companies with little or zero debt are in a better position.
Companies are facing a double whammy from the fall in margins, first interest rate hike and second raw material and energy price hike.
“Companies with lower levels of debt in rising interest tend to perform better and are the best value makers. When the cost of capital for the company is low, the company’s future cash flows are discounted at a lower rate. This means That higher valuation for the company and a hike in the equity share price,” Sedani said.
According to experts, in the current environment, debt-free companies provide a safe investment option, companies with low debt are the best bet for investment when there is volatility on all fronts, such as interest rates, geopolitical turmoil, etc. Other factors like turmoil and crude petrol. worth.
Here are some stock recommendations by Anand Rathi Shares and Stockbrokers to protect your portfolio from market downturns
CRISIL – Target Price – Rs 4000
CRISIL Limited is India’s leading provider of ratings, data, research, analysis and solutions with a strong track record of growth and global footprint. The company provides independent opinions, actionable insights and efficient solutions to over 100,000 customers. We are confident that the company will maintain the momentum of its business growth driven by its investments in talent and technology, improving economic activity, new product offerings and solutions.
Container Corporation – Target Price – Rs 780
Concor is a major player in the CTO business (65 per cent market share) with 60 terminals. Revenue from rail transport comprised 75 per cent of the total revenue (4 per cent through roadways, 13 per cent through management income, 2 per cent through warehousing and 4 per cent others). The company plans to add ~246 rigs and around ~50,000 containers over the next three to four years. During FY22, the company has added 2 terminals and is planning to add 5-6 terminals during FY23. There are several triggers for the stock such as high double stacking (a jump of 46 per cent in 3757 trains from FY2222), running rakes with higher axle load, targeting 1 million TEU container run rate at Khatuwas (MMLP), Dadri to DFC Diversification into connectivity, JNPT, other logistics verticals.
Data Pattern – Target Price – Rs 881
After successfully demonstrating the design, development and delivery of components and products for various defense projects and platform companies, the company now plans to scale up its operations and enter new areas such as systems integration from pure component or product suppliers. The company envisages upgrading its existing facilities, doubling the floor area and manufacturing capacity, adding larger and heavier equipment and integrating larger radar and mobile electronic warfare systems. With established capabilities and expertise in the defense sector, a strong thrust in Make in India, and high budget redistribution in defence, the company is in a sweet spot for above-normal growth in revenue over the next few years.
IEX – Target Price – Rs 270
IEX achieved good business performance in FY22 catering to 102 BU volumes across all market segments and witnessed a year-on-year growth of around 37 per cent. IEX is actively working towards launching long-term contracts in both electricity and renewable energy, the National Open Access Registry, ancillary markets, gross bidding contracts and capacity markets, and is expected to launch these segments in FY 2013. are optimistic about.
The views and investment suggestions of experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decision.
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