Wednesday, June 4, 2014

Acche din ahead...

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With the onset of Acche din in the stock market for all types of investors, it is time to focus on Acche stocks which will also ensure that Acche din keep going. So here are my picks:

With the division of Andhra into 2, expect construction activity of all types to start picking up there. And with Modi sarkar trying to improve things for the infra companies, keep an eye on the likes of IVRCL, GVK, GMR among the most common ones besides a host of small names. However, don’t expect them to double overnight from here, though IVRCL has already doubled in the last 1 month and the other 2 also have run up quite a bit. Over a period of time, they should do well. However, considering the dizzying heights the markets have touched, more on hope than any real things on the ground, it might be prudent to spread your money over a period of time to benefit the most. Also remember that the budget is just round the corner. As has been seen, there will be bouts of profit booking occasionally in some of these scrips, at which time an entry can be made.
On the Infra side, again with Gadkari, Mumbai’s flyover man, at the helm, there should be a pick-up in road construction activity. And with good friend Gadkari running the show, Mhaiskar of IRB Infra should rightly feel pleased. So this would be a good time to board the IRB Infra train. Another one in the same league is IL&FS Transportation Networks, though for different reasons. With parent IL&FS, a known infra major, gearing up for putting things in shape, this also should be a beneficiary. And in this effort, its Spanish JV with Elsamax should certainly come in handy. Not only can they have access to better technology, but also participate in orders across the border with them.

And with Modi at the helm, can the Gujarat gang of companies be far behind? Already Adani Enterprises has doubled from where it was in April. But considering the diverse businesses it is in, a favorable environment should benefit it. And other Adani companies also have jumped quite a bit. While Adani Power has run more on sentiments than fundamentals, Adani Ports has not. With Modi sarkar’s stress on exports, ports should certainly get a leg up. Adani Ports will certainly merit attention but among the other 2, Gujarat Pipavav, with an MNC parent, should also reward its shareholders. Already it has doubled from where it was a few months back, and not only because of the election results. Its last quarter results were pretty good too. And they can only improve with a favorable environment in place. The dark horse here could be Essar Ports. Though it will also ride the infra wave along with the other 2, any additional triggers such as delisting buzz should only add to the zing. But keep in mind that Essar group is not known to be investor friendly. This time though they may not have much control on the price front with the environment also taking the scrip upwards (they pulled a fast one on Essar Steel shareholders when nobody wanted to touch steel stocks and they could easily convince investors to dump Essar Steel at a throwaway price. Now they are laughing their way to the bank.

With a separate ministry/dept. for renewable/non-conventional energy, keep an eye on Orient Green which specializes in exactly this. Also Suzlon can be a direct beneficiary, if it is able to bring its debt to manageable levels in the coming weeks/months.

With the govt. deciding to allow FIIs/FDI in Insurance, Max India has already jumped. However, AB Nuvo has still not joined in the fireworks. Even w/o the Insurance trigger, this is 1 scrip which has so many diverse businesses that it can only generate good returns for its shareholders once it starts unlocking values in these businesses.

And if you still have money left after buying all of the above stocks, buy the tried and tested blue-chips like ICICI Bank, L&T and Axis Bank among others.