5 Best Shares To Buy Today For Short Term

5 Best shares to buy for short term in Sep 2018

The general rule of thumb is that shares bought for less than one-year holding duration are considered as short-term shares. Here are the best shares to buy today for short term duration of around six months. These top shares can be a bought now, today, tomorrow, or any other day as long as they are around the price recommended. If your time horizon is long term i.e. more than a year then visit best shares to buy for long term.

Disclaimer: Shares recommended and opinions below are for informational purposes and shouldn't be taken as a final advice from Niveza India. You shouldn't rely on this free advice solely and do your own research to arrive at the final conclusions. Our final opinion on which shares to buy for short-term investments is sent via SMS and Email to subscribers of Our Premium Products.

Shares To Buy For Short-Term

Va Tech Wabag Ltd (NSE: WABAG) (Share Price: Rs.308): Potential Buy

Valuation: Fairly-Valued stock with TTM PE of 15x.

Reasons to consider: VA Tech Wabag (Wabag) reported dismal Q4FY19 numbers which was largely discounted in the price. But going forward company can witness a turnaround given the order flows from the government in Namami gange project, strong guidance and order execution. Key orders won include SWTP in Saudi Arabia (Rs 933 crore), desalination order in Tunisia (Rs 596 crore), STP order in Doha (Rs 555 crore), etc. The order backlog is now at Rs 9061 crore.

Key Drivers: Under the Namami Gange action plan, Wabag has already won Rs 147 crore WWTP, Rs 253 crore sewage and related projects. With decisionmaking expected to improve in the next few months, Wabag is now expecting large orders integrated city management projects up to Rs 5000 crore for cities of Kanpur, Allahabad, Patna and Kolkata. Wabag has already been declared L1 bidder for Kolkata project (Rs 550-600 crore). As these large projects are likely to follow the hybrid model, Wabag may also raise up to Rs 400 crore for meeting equity contribution criteria. All such projects are likely to be centrally funded to the tune of 40%. The rest 60% is to be funded via debt and equity. Wabag is witnessing significant order opportunities from overseas markets from geographies like South East Asia, Latin America, Middle East regions and Sub-Saharan regions. The major driver will be the receivable from various project which includes of Rs 550 crore from Genco projects which is getting delayed due to various reasons but management expect to recover all their receivable during the year which will help them to cut the interest cost and debts and boost the profitability.

Financial: Total revenue Rs 679 crore in Q4FY19 vs Rs 1037 crore in Q4FY18 down 34%. PAT at Rs. 40 cr in Q4FY19 vs Rs 63.5 cr in Q4FY18 down 35%. Ebitda stands at Rs.44 cr in Q4FY19 down 55% vs Rs. 97.5 cr in Q4FY18.

Rallis India Ltd (NSE: RALLIS) (Share Price: Rs.148): Potential Buy

Valuation: Fairly-Valued stock with TTM PE of 18x.

Reasons to Consider: Rallis reported a subdued financial performance with revenue down 8.5% YoY to Rs 339.7 crore, primarily due to the poor show from the standalone business (down 9% YoY, 94% of consolidated revenue). Revenues from the standalone business were impacted largely due to muted sales growth from the domestic market but decent growth from international market arrested the decline, to some extent. On the other hand, Metahelix reported stable growth of 2.3% YoY to Rs 22.5 crore. Adjusting one-time charge of Rs 7.2 crore towards retirement benefits in employee expenses and Rs 5 crore towards contribution to the electoral fund, standalone EBITDA was at Rs 31 crore (down 27.4% YoY) while Metahelix registered an operational loss of Rs 13 crore against a loss of Rs 7.9 crore in Q4FY18. Higher other income (Rs 11 crore vs. Rs 1.6 crore in Q4FY18) helped the company to maintain its bottom-line performance. But in coming quarters rallies can show good performance overall primarily due to increasing demand in metribuzin along with key products like pendimethalin and acephate are likely to drive international market growth. Further, capital investment in backward integration for some of the active pharma ingredient (API) is expected to improve the operational performance in the medium to long run.

Key Drivers: Rallis has been expanding its capacity in Metribuzin, which is considered one of the major revenue contributors in the companys international market. The management highlighted that dicamba and glyphosate have some resistance issue, which translates into better volume growth outlook for Rallis since it holds 12% global Metribuzin market share. Further, the CRAMS business has also been witnessing decent growth, which can aid overall growth in the years to come. Increasing distributors from 3500 currently to 4200 in FY20 along with better incentive scheme from April 2019 are likely to deliver stable/decent growth in the domestic market. Further, increasing presence in Kharif crops for Metahelix can diversify the revenue stream, to a certain extent, in years to come. The company has been developing its portfolio in cotton and vegetable seeds, translating to a better growth outlook for Metahelix in the medium to long run.
Financial: Total revenue Rs 340 cr in Q4FY19 vs Rs 371 cr in Q4FY18 down 8.5%. PAT at Rs. 1.4 cr in Q4FY19 vs Rs 19.6 cr in Q4FY18 down 93%. Ebitda stands at Rs.6.8 cr in Q4FY19 down 80.5% vs Rs. 34.8 cr in Q4FY18.

Nestle India Ltd(NSE: NESTLEIND) (Share Price: Rs.11400): Potential Buy

Valuation: Over-Valued stock with TTM PE of 68x.

Reasons to Consider: Net sales for the quarter increased 8.9% YoY to Rs 3,003 crore led by robust domestic volume growth driven by aggressive new launches last year. Operating profit increased 5.9% to Rs 737.7 crore while margins declined 71 bps to 24.6% on a high base. Volume growth in CY18 was 11.1% YoY, led by strong growth in confectionery business at 15% YoY, beverages at 11% YoY and prepared dishes at 14% YoY. Milk products posted a 4.8% YoY volume growth. Given aggressive A&P done by the company behind new launches, we expect lower double-digit volume growth whereas Kit Kat, Milkmaid and Nescafe have been relaunched while more brands are likely to be remodeled, pushing volume growth upwards. It has new offerings in below Rs 10 price point which will help in gaining market share. NIL has announced plans to launch organic food products in the milk products & nutrition segment.

Key Drivers: The out-of-home (OOH) business registered volume and value growth in FY18, led by an increase in reach and distribution of KitKat, Maggi & Nescafe across key out-of-home channels, such as educational institutes, airlines, railways, offices, and food service channels like hotels and restaurants. Nescafe Classic, Maggi Coconut Milk Powder and Milk Maid performed well driven by new customer acquisitions and increased penetration through stronger customer engagement. NIL has launched 39 products in the past two years and it has launched 13 new products in FY18 which increased its ad spend up 44.4% YoY across all categories. NIL is targeting the youth segment, which has high disposable income, by leveraging the health and wellness platform as it complements their changing and upwardly lifestyle. It has plans to accelerate innovations centered on superior health, nutrition and wellness at appropriate price points which will drive the growth in the future.

Financial: Total revenue Rs 3002 cr in Q4FY19 vs Rs 2757 cr in Q4FY18 up 9%. PAT at Rs. 465 cr in Q4FY19 vs Rs 424 cr in Q4FY18 up 9%. Ebitda stands at Rs.738 cr in Q4FY19 up 6% vs Rs. 697 cr in Q4FY18.

INOX Leisure Ltd(NSE: INOXLEISUR) (Share Price: Rs.330): Potential Buy

Valuation: Fairly-Valued stock with TTM PE of 25x.

Reasons to consider: Inox Leisure reported strong growth across all parameters, driven by a strong box office show. It is noteworthy that Q4FY19 was one of the best quarters for the industry with net box office collections (ex-regional) witnessing staggering growth of 40% YoY. F&B revenues grew 58.3% YoY to Rs 123 crore while ad revenues grew 29.5% YoY to Rs 43 crore. Growth during the quarter was marked by strong contribution from surprise hits with long tails, which also boosted the multiplex share of box office revenues. The company has guided for annual screen addition of 80+ going ahead apart from that management has also indicated that the capex for new per screens would be Rs 2.75 to Rs 3 crore.

Key Drivers: The content going forward is also encouraging with movies such as Bharat, Super 30, Kick 2, Mission Mangal, Brahmastra, etc. The management expects the ad momentum to continue with an increase in ad revenue per screen & realisation per minute. It has also indicated advertisement growth is being driven by a mix of realisation and volume improvement. Recent consistency in content performance and a healthy pipeline signal strong growth ahead for the multiplex industry. With inox continues to impress with industry leading growth across all parameters it also has a strong balance sheet with net debt to EBITDA of 0.1x in FY19.

Financial: Total revenue Rs 478 cr in Q4FY19 vs Rs 323 cr in Q4FY18 up 48%. PAT at Rs. 48 cr in Q4FY19 vs Rs 57 cr in Q4FY18 down 16%. Ebitda stands at Rs.96 cr in Q4FY19 up 120% vs Rs. 44 cr in Q4FY18.

Elgi Equipments Ltd (NSE: ELGIEQUIP) (Share Price: Rs.265 ): Potential Buy

Valuation:Over-Valued stock with TTM PE of 55x.

Reasons to Consider: Elgi Equipments (Elgi) reported Q4FY19 numbers where its revenue grew 14% to Rs 528 cr and net profit grew 31% to Rs 35 Cr. Overall, Elgis domestic operations show a direct correlation and multiplier effect with pace of manufacturing and industrial activity (IIP) in India. It is also a dominant leader with a market share of 40-45% in the garage equipment space for automotive equipment through its subsidiary ATS Elgi. As per the management, the domestic market continues to witness a healthy rate of inquiries for its air compressor products from clients. However, there have been select instances of hesitation in finalizing orders by clients suggesting potential sluggishness in demand, going ahead. India business & direct exports for air compressors contributed Rs 894.5 crore (56%) of overall revenue in FY18. The company has a relatively higher market share in the smaller rated compressors. It recently acquired Australias largest air compressor distributor Pulford Air & Gas.

Key Drivers: Elgi, through acquisitions, has several foreign subsidiaries in key markets such as the US and Europe (Pattons in the US) (Rotair in Europe). It has recently acquired Pulford with an intention to expand into the Australian market. The company has scaled down its operations and rationalized costs in markets like China, Brazil. Over the past two years, Elgi has managed to consistently increase the profitability of foreign subsidiaries (EBITDA margins 7.7% in FY18) and has plans to improve further. With continued traction in key subsidiaries such as Pattons and Rotair & newer acquisitions, we expect revenues to grow 24.0% CAGR from FY18-20. Thus, it would also improve the share of foreign subsidiaries in consolidated revenue from 32.3% to 36.2% over FY18-20. Elgi Equipments has continued to strengthen its domestic & international operations for air compressor. It also dominates the automotive equipment segment through ATS Elgi. We believe Elgi is an excellent combination of market leader, robust balance sheet, efficient working capital management, consistent dividends, and clean management.

Financial: Total revenue Rs 528 cr in Q4FY19 vs Rs 462 cr in Q4FY18 up 14%. Net Profit at Rs. 35 cr in Q4FY19 vs Rs 27 cr in Q4FY18 up 31%. Ebitda stands at Rs.64 cr in Q4FY19 up 17% vs Rs. 55 cr in Q4FY18.

How to Find the Best Short-Term Shares?

Whenever you are contemplating stock investment, whether it's for short-term or long-term, you have to do a certain amount of research. There are aspects which ought to be touched upon in order to find a company worth investing. For a long-term view, you have to do an in-depth analysis of the company, its business, corporate governance, etc. However, if you have a short-term view, the process can be cut short considerably.

No Need For A Thorough Sectoral Analysis - In-depth sectoral analysis or the top-down economic analysis is not called for when you are looking for short-term stocks. The screeners are set to find the events which will have an impact on the price of the stock in the near future. These events can be anything like quarter earnings, conducive government's policies, a good order-book, optimistic management commentary for subsequent quarters, etc. These are some of the short-term triggers which have a marked influence on stock prices.

As gaining from short-term stocks needs high precision, it's a domain for experts. That's why its prudent to avail services of an advisory firm.

Niveza offers p3600 short term which give short-term value picks with thorough research and analysis. Not just that, you get timely updates of all the open calls along with precise entry and exit points.

Benefits of Buying Short-Term Shares

Like every other form of investment, short-term investment has its own set of pros and cons. From the quantum of returns to risk and reward equation, there are plenty of points on which short-term investment locks horns with the long-term investment. Let's take a point by point look at the pros and cons of going short.

Instant Gains - In the stock market, a whole lot depends on how you time the market. It's a daunting task to understand the constant mood swings of the market, but if you manage to enter a stock at the right time (when it has bottomed out) then you are in for instant gains. In many cases, a certain stock goes down consistently but once it bottoms out then there is a fair possibility for it to start its northward trend. Those who enter the stock at this level get immediate upside on their investment. Quick gains are one of the most enticing aspects of short-term stocks.

Research On The Merit Of Situation - The biggest stumbling block for doing a long-term investment is that one has to do a thorough research of all the financials of the company. In short-term investment, the analysts don't seek the clarity of too far ahead, their objective is to reap the maximum advantage of the short-term price movements. Such movements happen at the anticipation of good earnings, swelling order book or any substantial good news with respect to the company or corresponding sector. To gain from such movements of the stocks it's important to have perfect entry and exit points, only then one gets the optimum benefit of investing in short-term shares.

Disadvantages of Buying Short-Term Shares

The Palpable Threat Of Market Volatility - As we discussed above, volatility is just another name of stock investment. Short-term investors are amongst the people who stand to lose a lot in the market downturns. Investment in equity on a short-term basis always carries a certain risk. As the market cycles are extremely volatile, it can't be said with certainty that your investment strategy will come through as planned. This stands as one of the biggest disadvantages of short-term investment. In contrast to this, those who invest in the long-term stocks automatically discount the short-term hiccups which every stock goes through in its life cycle. There are some stocks which look very volatile in the short-term, but give excellent returns in long term.

Pay More Brokerage & Taxes -There are few investors who give a serious thought to equity brokerage they pay. They think it's a nominal amount that brokers deduct before delivering the stocks. Brokerage in India is extremely high, to add to it, there are plenty of taxes and cesses which are levied on every trade (buy & sell). Naturally, short-term investors and day traders have to pay more brokerage as they are constantly engaged in the buying-selling process. On the other hand, those who go long, and refrain from constant buying and selling of stocks, save a lot on brokerage, cess and taxes.

Risk Factor - When you are investing in stocks with a certain time frame in mind and target in mind it makes it easy to build your risk-reward profile. It simply means to have the math ready of how much you are willing to lose if you aiming for a certain profit. For example, if you are investing Rs.25,000, you can say if your profit target is 20% upside, to get that, you can bear the downside of 8%. It means your stop-loss would be placed at 8% below the buying price. If the stop-loss hits you can invest the same capital in other stock. This way your capital doesn't get stuck for a long time.

To know more about other short term investment options and plans read Best Short Term Investment Plans And Options For 2019. However, if you are looking for long term investment avenues then you can refer our scholarly article on Best Long-Term Investment Options And Plans In India.

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ABOUT AUTHOR

Niveza Editorial Desk : We are a team of stock market nerds trying to stay ahead of the herd. We spend our grey cells everyday to a pave a smooth road for our clients in the shaky world of stock market. While tracking the mood swings of the market we bring our clients the most rewarding deals.

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