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5 Best Shares To Buy Today For Short Term
Nov 04, 2019 | 12:00 PM IST
Nov 04, 2019 | 12:00 PM IST
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
Bharat Electronics Ltd(NSE: BEL) (Share Price: Rs.110): Potential Buy
Valuation: Under-Valued stock with TTM PE of 13.6x.
Reasons to Consider: Bharat Electronics Ltd (BEL) in its FY19 annual analyst meet guided for FY20 revenue growth of 12-15% (FY19 revenue included Rs 2500 cr from EVM) and sustainable EBITDA margin of 19-21%. Nomination based order margins have reduced to 7.5% from 12.5% earlier, however operating efficiencies are likely to partially offset the impact of this margin rationalization by MoD. BELs cumulative order intake for FY2019-FY2020 till date increases to Rs 7342 cr, but it is lower by about 50% as compared to H1FY2019, largely due to Rs 9200 cr of Long Range Surface to Air Missile order intake in Q2FY2019. However, management is hopeful of securing large orders in the remaining of FY2020E, including Coastal Surveillance System and upgrade of the Samyukta Electronic Warfare system. The company has a robust order book of Rs 51,715 cr, at 4.3x its FY2019 revenue provides healthy revenue visibility in the future.
Key Drivers: The governments Make in India initiative and rising spends for modernizing defence equipment will support earnings growth in the coming years, as BEL is one of the key players with strong research and manufacturing capabilities in the defence space in the country. A robust order book provides strong revenue and earnings visibility. The management is hopeful of bagging certain large orders such as Akash Missile System (7 Sqdn) order during FY2020. BEL believes diversification in non-defence segment would drive future growth. Segments like Space Electronics, Solar, Homeland Security, Smart Cards, Telecom, Railways, Civil Aviation, Software as a Service, Fuel Cells, Li-ion Batteries are major focus areas in non-defence segment. Company is also focusing on Artificial Intelligence-based projects and Indigenization going ahead. BELs working capital has been stretched due to budget constraints across clients. However, some improvement in receivables is expected due to advances from the Akash missile order which should restrict further working capital deterioration which will be the key driver for the stock.
Financial: Total revenue saw flat at Rs 2102 cr in Q1FY20. PAT at Rs 205 cr in Q1FY20 vs Rs 180 cr in Q1FY19 up 18%. Ebitda stands at Rs 348 cr in Q1FY20 up 11% vs Rs. 310 cr in Q1FY19. EBITDA Margins in Q1FY20 at 17% up 200bps from 15% in Q1FY19.
Himadri Speciality Chemical Ltd(NSE: HSCL) (Share Price: Rs.80): Potential Buy
Valuation: Under-Valued stock with TTM PE of 11x.
Reasons to Consider: Company reported its Q1FY20 numbers where, revenues of Rs. 524 Cr down16% YoY, EBITDA of Rs. 129 Cr down 7% YoY with EBITDA/MT of Rs. 15,063 vs Rs 13,886 QoQ. PAT for the quarter stood at Rs. 73.5 Cr down 4% YoY. Though the sales volume has been impacted due to tepid demand from Aluminium, Steel and tyre sectors, the rising EBIDTA per tonne is a clearly indicating a shift towards value added products; the company has been consciously adding more value added products which include various grades of specialized carbon black, advanced carbon material, refined naphthalene, specialized construction chemicals etc. to its core product-CTP. The CTP volumes were down 10% QoQ (80,167 MT vs 88,808 MT). The demand for high margin projects Specialty Carbon Black (SCB) and Advanced Carbon Materials (ACM) continued to remain high and HSCL is set to come up with their expanded capacities by late FY20.
Key Drivers: Being largest manufacturer of Coal Tar Pitch (CTP) in India, it caters mainly to the domestic aluminium, steel, tyre and graphite electrode manufacturers who would be impacted by the slowdown, but the business model of HSCL enables it to protect its interest which is very much evident from the improving . EBIDTA/tonne reported by the company despite lower volumes. It also has a diversified portfolio of products which include Carbon Black (CB), Specialty Carbon Black (SCB), Naphthalene and Advanced Carbon Material (ACM); SCB and ACM are the value-added high-margin products which would start meaningfully contributing to the EBIDTA by FY21 onwards. CTP is the cash-cow business for HSCL. It commands around 70% CTP market share in the domestic market. The slowdown witnessed in Aluminium, Steel and tyre sectors has impacted the demand. The company has completed its capacity expansion plan of 1,00,000 TPA and commissioned it in Q3FY19 which has taken the CTP capacity to 5,00,000 TPA (an increase of 25%). Additional capacity would be utilized for the value-added products viz., the specialized carbon and advanced carbon material. At the current juncture, the domestic CTP demand is expected to grow at 6% per annum over the next 3-4 years mirroring the expected rise in production capacities of 3 major aluminum producers in India. With this rise in demand and the expanded capacity, HSCL is expected to benefit and this shall help them boost their revenues.
Financial: Total revenue Rs 524 cr in Q1FY20 vs Rs 627 cr in Q1FY19. PAT at Rs 73.5 cr in Q1FY20 vs Rs 76.6 cr in Q1FY19 down 4%. Ebitda stands at Rs 129 cr in Q1FY20 down 7% vs Rs. 139 cr in Q1FY19. EBITDA Margins in Q1FY20 at 23% up 100bps from 22% in Q1FY19.
Brigade Enterprises Ltd(NSE: BRIGADE) (Share Price: Rs.214): Potential Buy
Valuation: Fairly-Valued stock with TTM PE of 20x.
Reasons to Consider: Construction in Brigade Tech Garden (BTG), 3.3 million sq ft (msf) development in 51:49 JV with GIC, is in full swing. It has already received OC for 1.2 msf and leased out area of 0.7 msf with another hard option of 0.4 msf. BEL aims to complete construction of incremental 1.8 msf area by December 2019. BEL has so far achieved average pre-leasing rate of Rs 55 psf pm vs Rs 52-53 psf pm guided earlier. On the residential front, 86% of ongoing & 93% of upcoming launches are mid-income & affordable housing projects, which should drive sales momentum ahead. As per analyst reports overall, once 8.7 msf area is operational, BEL could generate Rs 533 cr exit rentals by FY22E which can also seen as positive and support on the earnings going forward.
Key Drivers: BEL received a strong response to its key affordable and mid income category housing. These include El Dorados four towers at initial stage (launched in Q1FY20) 489 units (85% area) sold so far and Brigade Utopia (launched in H2FY19) - 1,000 out of 1,900 units sold. BELs 86% ongoing projects & 93% upcoming launches aligned towards the midincome and affordable housing category, makes comfortable on its strategy to calibrate its supply pipeline with the demand dynamic in the residential market. The agile response is expected to drive sales momentum, going ahead, and BEL continues to expect 4.0 msf sales volumes in FY20E. It has total 1,779 keys (operational & under development) in its hospitality portfolio. Also, company has been looking to dilute stake in hospitality business and has now received term sheet from a PE player for stake sale which will benefit to reduce the debt from balance sheet in coming quarter and can generate positive cash flow.
Financial: Total revenue seen up 2% at Rs 709 cr in Q1FY20. PAT seen at Rs 41 cr in Q1FY20 vs Rs 63 cr in Q1FY19 down 35%. Ebitda stands at Rs 182 cr in Q1FY20 up 1% vs Rs. 180 cr in Q1FY19.
Wipro Ltd(NSE: WIPRO) (Share Price: Rs.249): Potential Buy
Valuation: Fairly-Valued stock with TTM PE of 14x.
Reasons to Consider: Wipro reported a healthy performance for the quarter with in line revenue, surprise at the margin level for Q2. Further, digital (39.6% of revenue) grew a healthy 6.4% QoQ, 28.6% YoY in the quarter. Another key highlight is the decline in voluntary attrition to 17% vs 17.6% in Q1 . Company has given qualitative commentary suggests that momentum in order book is better compared to Q1. Taking this into consideration and two deals getting consolidated in Q3, the management has guided that its Q3FY20E IT services revenue growth would be in the range of 0.8-2.8%.
Key Drivers: With improving qualitative commentary on deal front and digital growth, we expect growth to accelerate in next two years with room for margin revision upwards from 18.3% estimated in FY21E. Digital going strong with 29% YoY growth in Q2FY20, now constitutes 39.6% of revenues. Further, a reduction in tax estimates for FY20E, FY21E led to revision in PAT estimates.
Financial: Total revenue seen at Rs 15130 cr in Q2FY20 vs 14302 cr in Q2FY19. PAT seen at Rs 2553 cr in Q2FY20 vs Rs 1650 cr in Q2FY19 up 54.7%. Ebitda stands at Rs 3155 cr in Q2FY20 up 39.6% vs Rs. 2260 cr in Q1FY19.
ACC Ltd (NSE: ACC) (Share Price: Rs.1550): Potential Buy
Valuation: Fairly-Valued stock with TTM PE of 15.8x.
Reasons to Consider: ACC reported an in line operational performance but disappointed on PAT front due to higher-than-expected tax expenses. Revenues grew 3% YoY to Rs 3,464 crore on the back of healthy realisation growth, at Rs 5,380/t, up 4.7% YoY. Volumes declined 1.7% YoY to 6.44 MT owing to muted demand scenario during the quarter due to a weak economic scenario and extended monsoons. The RMC division continued to grow in double digits, posting 11% YoY volume growth to 0.81 lakh cubic metre. Profitability witnessed an improvement during the quarter led by higher realisations and lower raw material costs. EBITDA margins witnessed an expansion came in line with estimates at 14.2%. The company reported a 31.8% rise in EBITDA to Rs 493.2 crore. PAT came at Rs 302.6 crore, 45% higher YoY.
Key Drivers: The government has announced several measures to spur growth in the economy. Thus, demand is expected to revive from H2YF20. However, overall growth of the industry is expected to remain low on the back of a weak first half but can recover in second half. However, cement industry is expected to witness healthy growth in demand, due to push for infrastructure development by govt especially in rural areas, rate cuts by the RBI, incentives of significant lower rates for new companies setting up manufacturing facilities are expected to attract new investments, thus reviving growth in the economy and for the sector. Also, the additional capacities which the company has announced are expected to be commissioned in FY21E.
Financial: Total revenue seen at Rs 3464 cr in Q2FY20 vs 3364 cr in Q2FY19. PAT seen at Rs 303 cr in Q2FY20 vs Rs 209.2 cr in Q2FY19 up 44.7%. Ebitda stands at Rs 493.2 cr in Q2FY20 up 31.6% vs Rs. 374.3 cr in Q1FY19.
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.
At Niveza India Pvt Ltd., we all come to work everyday to take the challenges of stock market head on and to change people's perception that stock market investment is like a gamble. Over the years, we have built our profile as a company which has brought optimum value to our subscribers through our well-researched stock recommendations.... More>>
At Niveza India Pvt Ltd., we all come to work everyday to take the challenges of stock market head on and to change people's perception that stock market investment is like a gamble. Over the years, we have built our profile as a company which has brought optimum value to our subscribers through our well-researched stock recommendations. We don't promise you unrealistic returns, we don't chase intraday or F&O dreams. We believe in the ideals of value & growth investment; these values are reflected in our products. We are always marching ahead with the goal to better ourselves.
Disclaimer: Niveza does not guarantee the accuracy or completeness of information on the site, nor does Niveza assume any liability for any loss that may result from reliance upon any such information or recommendations. Information and recommendations on the site are for general information only. Nothing contained herein is an offer to sell nor solicitation to buy any securities.