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

TCS Ltd. (NSE: TCS) (Share Price : Rs.1960): Potential Buy

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

Reasons to consider: Tata Consultancy Services Limited (TCS) is engaged in providing information technology (IT) services, digital and business solutions. The Company's segments include banking, finance and insurance services (BFSI); manufacturing; retail and consumer packaged goods (CPG); telecom, media and entertainment, and others, such as energy, resources and utilities, hi-tech, life science and healthcare, s-Governance, travel, transportation and hospitality, and other products. It has reported stable revenue growth of 20.3% YoY and 1.3% QoQ in Q3FY19. This was largely led by strong revenue growth from digital services vertical and BFSI segment for the quarter. However, the EBIT for the quarter remains subdued due to higher employee benefit expenses. The EBIT margin for the quarter stood at 25.6% with contraction of 90 bps. The bottom-line showed sturdy performance with 2.6 % qoq to Rs.9560 crore. In addition, the company won deals Rs.590 crore in the quarter spread across different segment and geographies.

Key Drivers: The digital and BFSI segment continue to remain major revenue contributors for the company with 30% revenue contribution each. The retail segment ( 16.5% of revenue) also reported robust growth in the quarter and hold the huge potential of growth. Going ahead we see robust deal wins and strong growth across the verticals will aid to double-digit growth in FY19 & FY20E. However, the slowdown in the global economy remains key risks to look out for. one can buy the stock in correction.

Financial: Company had reported a Revenue of Rs 37338 cr in Q3FY19 Vs Rs 30904 cr in Q3FY18 up 20.8%, Net profit of Rs 8105 cr in Q3FY19 vs Rs 6531 cr in Q3FY18 up 24%, whereas EBITDA stands at Rs 10083 cr in Q3FY19 vs Rs 8288 cr in Q3FY18 up 21% and EBITDA margin up 19bps to 27% in Q3FY19 vs 26.8% in Q3FY18.

ITC Ltd. (NSE: ITC) (Share Price: Rs.296): Potential Buy

Valuation: Fairly-Valued stock with TTM PE of 31x.

Reasons to consider: ITC Limited is a holding company, which is engaged in the marketing of fast moving consumer goods (FMCG). The Company operates through four segments: FMCG, Hotels, Paperboards, Paper and Packaging, and Agri-Business. ITC reported a steady quarter with broad-based growth across segments. Cigarette volumes grew a healthy 7.5% with 8.8% EBIT growth as stable prices propelled a steady increase in consumer demand. FMCG business reported 41.6% higher EBIDTA led by strong traction in processed foods and lower losses in personal care despite one-off losses on business restructuring in Lifestyle retailing. Paperboard business is in fine fettle given gains from steady prices and benign input costs.

Drivers: ITCs vision of reaching Rs 100,000 crore turnover with FMCG contributing Rs 70,000 crore is on the right track with companys slew of new launches recently. It has forayed into packaged non-basmati rice market with Sona Masoori in Bengaluru. In the dairy segment, it has launched four variants of RTD milk beverages under Sunfeast Wonderz brand in Karnataka and Tamil Nadu. ITC is looking to expand its dairy business further by launching paneer in Kolkata and milk beverages on a pan India level in the near term. It has launched pouch milk under Aashirvaad Swasti and curd under Aashirvaad Swasti Dahi. It expanded its noodle portfolio by launching Sunfeast Yippee noodles in four new variants and launched its traditional flavours snack Tedhe Medhe Wakhra Style under Bingo brand.

Financial: The company had reported a Sales of Rs 11227 cr in Q3FY19 Vs Rs 9772 cr in Q3FY18 up 15%, Net profit of Rs 3210 cr in Q3FY19 vs Rs 3090 cr in Q3FY18 up 4%, whereas EBITDA stands at Rs 4325 cr in Q3FY19 vs Rs 3889 cr in Q3FY18 up 11% and EBITDA margin has contracted 654bps to 38.5% in Q3FY19 vs 45.1% in Q3FY18.

NTPC Ltd (NSE: NTPC) (Share Price : Rs.148.50): Potential Buy

Valuation: Under-Valued stock with TTM PE of 12x.

Reasons to consider: NTPC reported Q3 numbers wherein revenues came at Rs 24120.4 crore in Q3FY19 vs Rs 20774 crore in Q3FY18. On an operational basis, gross power generation grew 3.4% at 70 (BUs) Q3FY19 vs 67.7 (BUs) Q3FY18. Whereas, energy sold grew 3.1% YoY to 65.3 (BUs) Q3FY19 vs 63.4 (BUs) Q3FY18. PLFs of coal plants were at 77.7% vs 76.9% in Q3FY18. As on 9MFY19, the companys commercial capacity was at 44185 MW. The average tariff for 9MFY19 was at Rs 3.47 / Kwhr. Fuel cost per unit during Q3FY19 was at Rs 2.17 / unit vs Rs 2.04 / unit QoQ.

Key Drivers: Management in concall stated in the coming quarter the under-recovery figure will improve as losses from its Unchahar plant will now be contained and the plant has re-started its operations from Dec 2018. It currently has 21,071MW under construction power project out of which it plans to capitalize 4-5GW of capacity each year for the next 4 years which will lead to strong growth in its regulated equity base. NTPC is also planning to add around 10GW of solar capacity in the next 3 years.

Financial: In Q3FY19 Net Sales was Rs 24120.4 crore Vs Rs. 20774 crore in Q3FY18 up 16%. Net Profit at Rs. 2385 crore in Q3FY19 up 1% from Rs. 2361.7 crore in Q3FY18, whereas EBITDA stands at Rs. 6580 crore in Q3FY19 vs Rs. 5277 crore in Q3FY18 up 25%.

Financial: Net sales of Rs 752.68 crore in Q3FY19 vs Rs. 581.41 crore in Q3FY18 up 29.46% YoY. Net Profit at Rs. 148.32 crore in Q3FY19 vs Rs. 123.98 crore in Q3FY18 up 19.63% YoY whereas, EBITDA stands at Rs. 259.48 crore in Q3FY19 vs Rs. 215.03 crore in Q3FY18 up 20.67% YoY.

Bata India Ltd. (NSE: BATAINDIA) (Share Price : Rs.1340): Potential Buy

Valuation: Over-valued stock with TTM PE of 58x

Reasons to consider: Bata India Ltd had posted a strong performance in the December quarter with revenues growing 15.5 percent to Rs 778.7 crore YoY and net profit higher by 51.3 percent to Rs 103.2 crore YoY. It has reported double-digit revenue growth with Same Store Sales Growth(SSSG) grew 12% for the quarter and margins for the quarter improved significantly by 350 bps to 58.6% YoY.

Key Drivers: Company efforts towards premiumisation of product portfolio yielded better operating margins and will remain better in coming quarter. It has concentrated on redesigning of its existing store model with a specific focus on various categories like sports, youth, and women which will drive the growth in the coming quarters. Management has a plan to add 150 stores in FY19 (100: COCO, 50: franchisee)

Financial: In Q3FY19 Net Sales was Rs 779 crore Vs Rs. 674 crore in Q3FY18 up 15.5%. Net Profit at Rs. 103 crore in Q3FY19 up 51.3% from Rs. 68 crore in Q3FY18, whereas EBITDA stands at Rs. 163.6 crore in Q3FY19 vs Rs. 111.5 crore in Q3FY18 up 46.8% & EBITDA Margins at 21% in Q3FY19 vs 16.5% in Q3FY18 up 447bps.

Bharat Electronics Ltd. (NSE: BEL) (Share Price: Rs. 91.50): Potential Buy

Valuation: Under-Valued stock with TTM PE of 11x.

Reasons to consider: Bharat Electronics Ltd. (BEL) is a Navaratna enterprise having 37% market share in Indian Defence Electronics and has strong order book. Its core business is in radar & weapons systems, defense communication & electronic warfare. Recently, the company declared its third-quarter result which beats the analyst estimates on all front due to strong operational performance and order execution of EVM & VVPAT.

Key Drivers: BEL is well positioned to benefit from the rising defense expenditure, supported by strong manufacturing base with current capacity utilization of 60%. Strategic collaboration with foreign technology partners for new product development will also benefit the company in the coming quarters. The company spends (9.0%) on R&D of its total revenues which will help them to develop an innovative product in defence. Whereas, Order book of Rs 48,400 crore at end Q3FY19 looks healthy and provides strong revenue visibility.

Financials: In Q3FY19 Net Sales was Rs 2716 crore Vs Rs. 2506 crore in Q3FY18 up 8%. Net Profit at Rs. 508 crore in Q3FY19 up 68% from Rs. 303 crore in Q3FY18, whereas EBITDA stands at Rs. 785.74 crore in Q3FY19 vs Rs. 494.40 crore in Q3FY18 up 59%.

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.

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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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