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Sensex And 10 Other Stocks Will Exceed Growth In 2017

[Image: Sensex-2.jpg]

NEW DELHI: The domestic equity market failed to cheer investors in 2016, but the next 12 months are likely to be more exciting as the equity indices are projected touch fresh record highs amid global as well as domestic headwinds.
Analysts say there will be plenty of challenges for domestic investors in 2017, but they should use every dip to dig into quality stocks. There will be a lot of action in specific stocks. Hence, investors should be positioned in the right sectors to maximise gains.
JPMorgan has maintained a 'neutral' stance on the domestic market and expects the Nifty50 to hit fresh record high of 9,600 in 2017, which translates into an upside of over 17 per cent from its current level.
Demonetisation may drag corporate earnings in 2017 compared with analysts' estimates of double-digit growth before demonetisation. But the economy may not be impacted that much, as feared, the global brokerage said.
Of the 36 monthly economic indicators that CLSA tracks, 22 are still showing a positive picture for the economy. The data is far better than what was initially feared. "The pace of remonetisation at Rs 16,000 crore a day has been a positive surprise. If this pace is sustained, normalisation would happen sooner than March 2017," it said.
Based on recommendations of different global brokerages, here is a list of top 10 stock ideas that investors can look at for calendar year 2017.
1. ITC: Attractive smoke

A 12 per cent correction in the stock over the past three months factors in most risks related to demonetisation as well as uncertainty over the GST. CLSA expects a steady improvement in cigarette volumes and model in 4-5 per cent YoY growth in volumes from April 2017 onwards.

ITC's valuations are reasonable at 26 times one-year forward earnings, which is almost one standard deviation below the average of past five years.
2. Maruti Suzuki India: Stellar franchise

CLSA expects 12 per cent volume growth CAGR over FY17-CL19 driven by multiple new products, easing capacity constraints and demand normalisation after the demonetisation fall.

The brokerage has forecast a healthy 15 per cent growth in earnings per share (EPS) CGR over FY17-19 and sees potential for faster earnings growth if the demonetisation impact is softer than expected. Maruti is the best large-cap p ..
3. ICICI Bank: Worthy of rerating

Completion of key asset sale transactions (JP Associates and Essar) should ease the currently elevated stressed loans at 9 per cent of total. The core franchise remains strong, with a Casa ratio of 46 per cent, which is highest in the sector. The stock is attractively priced, with a valuation that is 30-50 per cent below its peers.
4. Power Grid: Defensive growth

CLSA forecasts a 50 per cent growth in Power Grid's regulated equity during FY16-19CL, which will not only accelerate earnings growth but also reduce the risk of equity dilution.

The company is well positioned to deliver a 14 per cent EPS growth CAGR over FY17-CL19. It looks inexpensive despite a 30 per cent rally year-to-date, trading at a PE and PB of 11.5 times and 1.8 times FY18, respectively, on over 16 per c ..

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