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

HDFC (NSE: HDFC) (Share Price: Rs.2280): Potential Buy

Valuation: Fairly-Valued stock with TTM P/BV of 5.1x.

Reasons to consider: HDFC reported loan growth of 13.1% YoY to Rs 406607 crore. Individual loan book which constitutes 71% of the portfolio continue to grow at a healthy pace of 14.9% YoY at Rs 288819 crore. Growth in non-individual/ corporate portfolio slowed for 2nd consecutive quarter in a row to 8.4% YoY on back of unfavourable lending environment. On asset quality front, HDFC reported marginally improvement in asset quality QoQ with GNPA ratio declining 4 bps to 1.18%. GNPA in nonindividual/ corporate witnessed improvement of 12 bps QoQ to 2.34%, while individual loans GNPA remained steady at 0.7%. While, Operational performance remain stable, attributable to higher other income & healthy NII. Other income was aided by extra ordinary gains from stake sale in Gruh finance which was around Rs 1900 cr.

Drivers: Given tight liquidity conditions and headwinds in real estate, HFCs are facing twin balance sheet problem of moderation in growth as well as increasing risk of deterioration in asset quality, especially on exposure to developers financing. While, on the other side HDFC Ltd led by superior fundamental is expected to outperform its peers. It has been a consistent performer, maintaining loan spreads of 2.29-2.33% loan spreads since last 5 years, across interest rates cycles. It also enjoys the industrys best rating (CRISIL AAA/Stable), due to its healthy asset quality (GNPA at a stable 1.18%) and a diversified and stable resource profile. We believe that lower competitive intensity should benefit strong players such as HDFC. We believe HDFC will continue to maintain its robust credit risk profile in the medium term, backed by its healthy asset quality and a strong financial risk profile. Its subsidiaries like HDFC Bank, HDFC Asset Management Company and HDFC Life are industry leaders in their own respective segments and their listing further strengthens the financial risk profile of the franchise. Govt policies thrust for housing expected to continue with the Governments oft stated focus towards Housing, one can reasonably expect measures benefitting / encouraging demand in the segment. Earlier, in the first edition of the NDA government, steps like GST rates reduction, policy incentives for homebuyers etc were helpful. Financiers, should be a key component and beneficiary of favorable govt. policies and HDFC being the Industry leader, should be key beneficiaries.

Financial: Its annouces Q4 result where, Net interest income stood at Rs 2,847 Cr in Q4FY19. Net advances grew by 5.5% to Rs 406,607 YoY. Net profit at Rs 2,862 cr vs Rs 1,961 cr YoY. NIM remain at 3.1% YoY.

Larsen & Toubro Ltd(NSE: LT) (Share Price: Rs.1475): Potential Buy

Valuation:Fairly-Valued stock with TTM PE of 24x.

Reasons to consider: L&T said that public capex remained robust in rail, metro, power T&D, and hydrocarbons, although private sector capex was tentative. The company expects ordering to pick up more meaningfully in 2HFY20, in line with what it said in 4Q2019. L&T management said it has well articulated plans in different verticals, including plans to leverage its experience to help clients in their automation process. It is confident of further expanding RoE (RoEs improved 120bps in FY19), as outlined in the current strategic plan which ends in FY21, and has already started developing its next strategic plan for beyond FY22. The order inflow was Rs 1,768 bn in FY19, a growth of 15.6% YoY. The EBITDA margin for the year was 11.6%, up 20bps YoY. The PAT margins were 6.3%, marginally up from 6.1% in FY18. The working capital was well managed at 18% of sales, from 20% in FY18, which helped increase RoEs in FY19 to 15.3%, from 14.1% in FY18. On the debt profile continued to be stable as L&T maintained the net debt equity at 1.5x, the same as FY18.

Drivers: The companys order inflow and revenue guidance for FY20 was strong, and we believe the improving margins and robust order book of Rs 2.9trn, it give us clear visibility of achieving the revenue growth and target RoEs. The Company has established price discovery mechanisms such as zero level costing, historical benchmarks, market intelligence, XaaS Costing Model, Digital AI Weighment systems have been introduced at the Kancheepuram Works. For its Aerospace business, two programs have been approved for procurement under SP viz. Naval Utility Helicopters (NUH) and Program 75(I) for construction of Conventional AIP Submarines indigenously. While, the EoI for NUH program has been released for Indian and Foreign OEMs in FY19, the same is expected for P75(I) in Q1 of FY20. High-speed Railway projects modernization of railway stations, the Ahmedabad Mumbai High-speed rail and depots are expected to gain momentum in FY20. Orders were also secured for engineering, procurement and construction of one of the tallest office structures in Amravati, construction of Cancer hospitals at 18 locations in Assam, expansion of the IIT Campus at Hyderabad, a commercial complex from a major developer and construction of a botanical garden at Oman.

  • Mumbai coastal road project.
  • Construction of Thane creek bridge connecting Mumbai to Navi Mumbai.
  • Underground metro packages in phase 2 of Bengaluru metro.
  • Bharatmala Pariyojana Phase 1, and execution proceeded in during FY2019.
  • L&Ts transportation business won the largest value single domestic order for the expansion of Delhi International Airport. Secured various orders for construction of
  • Highways as well as city infrastructure development projects.
  • 8-Lane Mumbai Nagpur Expressway (57.9 km), Maharashtra.
  • Construction of utilities and roads for Amaravati Government Complex and Zone 12 A projects.
  • A Design & Build Systems Package for a Mass Transit System in Dhaka.
  • Overhead electrification and signaling & telecommunication package in the Eastern Dedicated Freight Corridor.

Financial: Total revenue Rs 30,822 cr in Q4FY19 vs Rs 26,941 cr in Q4FY18 up 14.4%. Net Profit at Rs. 2,394 cr in Q4FY19 vs Rs 2,301 cr in Q4FY18. Ebitda remain flat at Rs 3,460.9 cr in Q4FY19 vs Rs 3,459.5 cr in Q4FY18.

Finolex Industries Ltd(NSE: FINPIPE) (Share Price: Rs.498): Potential Buy

Valuation: Fairly-Valued stock with TTM PE of 17.8x.

Reasons to consider: Finolex Industries is one of India's leading manufacturers of pvc -U pipes & fittings and pvc resin. Its pipes and fittings largely find use in the agriculture segment followed by construction and industrial segments. It is positive on PVC pipes demand in the longer run and believes that GST would be positive for the organized players. In pipes segment, the company passes on the impact of raw material prices with a lag. Based on strong brand and quality products, the company pass on any increase in raw material prices which also protects margin during rising raw material prices. We believe that the PVC pipes demand would improve particularly in rural segment in H2FY20 based on expectation of strong Rabi season in FY20 positively impacting rural demand. And recent correction in crude prices with rupee appreciation will impact positively on margins & profitability.

Drivers: Government infrastructural projects push such as Swachh Bharat Mission, Pradhan Mantri Krishi Sinchai Yojana and the Smart City Programme, India's PVC pipes market is estimated to grow at double digit (though low) over the next few years. Industry reports contend that unparalleled focus on smart water, waste management and rainwater harvesting would give great fillip to Indian piping industry. We believe that FIL would be a major beneficiaries from governments focus on irrigation and improvement in rural consumption in the long term. The company is targeting to grow its product range across both agri and nonagri pipes in the longer run. Addition of CPVC pipes is one such step in that direction. Further, it is expanding its product range in fittings segments. Its fittings SKUs which now stands at 1,500 and there is enough scope to expand it further. The company is expanding its capacity every year in order to achieve double digit volume CAGR in the longer run. FILs capacity addition plan of 40,000 tonne in FY19E is based on its target to achieve double digit volume growth in the longer run. Its aggressive capex in last few years would support its revenue growth. The company intends to add 10-15% capacity through internal accruals in the next 2 years. The company can further increase its capacity based on brownfield expansion at its existing three manufacturing locations.

Financial: Total revenue Rs 964 cr in Q4FY19 vs Rs 809 cr in Q4FY18 up 19%. Net Profit at Rs. 91 cr in Q4FY19 vs Rs 120 cr in Q4FY18 down 24%. Ebitda remain stands at Rs 159 cr in Q4FY19 vs Rs 191 cr in Q4FY18 down 16.7%.

Colgate Palmolive (India) Ltd(NSE: COLPAL) (Share Price: Rs.1210): Potential Buy

Valuation: Over-Valued stock with TTM PE of 40x.

Reasons to consider: The company reported 4.2% YoY growth in revenue to Rs 1085 cr mainly driven by 4% volume growth. Operating margins expaned 60 bps to 27.6%. PAT declined by 10.7% YoY to Rs 169 cr compare to Rs 189.5 cr last year due to one time exceptional gain of Rs 34.1 cr in FY18. If we exclude the impact of the exceptional item for the previous year, the PAT has actually increased by 5 percent in the current year. CPIL has been able to maintain its toothpaste volume market share at 52% and increase its toothbrush market share by 280 bps to 48% on a YoY basis. CPIL posted almost 5% topline growth largely driven by volume growth of 4%. CPIL volume growth has improved in past few quarters primarily driven by new launches in the naturals portfolio. CPIL has aggressively increased its promotional spend to drive growth in its 'Naturals' and overall toothpaste portfolios. In naturals, CPIL has increased its volume market share by 120 bps YoY to 8.1%. We see in coming quarter naturals portfolio contribution to overall revenues to increase over time resulting in robust volume growth trajectory with healthy operating margins.

Drivers:With stable market share, CPIL is now targeting market share gains through growth initiatives, including the growth of naturals, kids and Palmolive portfolio, as well as distribution expansion. The company launch of Swarna Vedshakti nationwide during Q3FY19 is gaining significant traction. In addition, the company has relaunched its key brand Colgate Total. Further, Palmolive Facial Bar was launched in key markets, which resulted in better volume growth. It also launched Colgate ProClinical battery operated toothbrush. Going ahead, we believe the company would gain market share primarily driven by new product launches and decline in competitive pressure from Patanjali. We believe its aggressive stance on increasing A&P spend would support new launches. CPIL has one of the widest distribution networks in India, which spans across 6 million outlets across the country. Going forward, the increasing distribution network would help enhance the volume growth of the company. For increasing its presence in rural areas, CPIL has undertaken initiatives like Project Jagruti and Disha for the same which will benefit the company in the longer run.

Financial: In Q1FY20 Net Sales was Rs 1085 crore Vs Rs. 1042 crore in Q1FY19 up 4.2%. Net Profit at Rs. 169 crore in Q1FY20 down 10.7% from Rs. 189.5 crore in Q1FY19,whereas EBITDA stands at Rs. 300 crore in Q1FY20 vs Rs. 282 crore in Q1FY19 up 6.6%.

Bajaj Consumer Care Ltd(NSE: BAJAJCON) (Share Price: Rs.299): Potential Buy

Valuation: Fairly-Valued stock with TTM PE of 20x.

Reasons to consider: The companys topline rose 8% in Q1FY20, driven by a 4.6% volume growth. The volume performance was impacted due to stress in the CSD ( Canteen store departments) channel. Excluding CSD volume, the domestic businesss volume rose 3.5%. The strong volume growth in modern trade (+13%) and multifold growth in IB sales helped it mitigate the negative impact of CSD decline. The company was able to expand GM by taking price hikes in the quarter. However, operating margin shrunk, due to a rise in A&P spends. The ADHO ( Almond drop hair oil ) brand continued to gain volume and value market share. However, new product launches may lead to a further rise in A&P spend which will put pressure on margins. In company's total revenue rural contributes 41% while urban accounts for 59%.

Drivers: To expand the portfolio, the company restaged Bajaj Cool Almond Drops in the cooling segment in March 2019. The launch was supported by higher A&P spend. It also continued ADHO relaunch activities in Q1FY20 to increase market share. Nomarks was relaunched in the Q4FY19 to gain marketshare and position it as a premium ayurvedic skincare brand. Nomarks brand witnessed significant growth in Q1FY20 with the launch of Sunscreen and increase in reach. Post restaging these brands, volume market share of ADHO in total hair oil rose from 7.4% in MAT June 2018 to 7.7% in MAT June 2019, and in Nomarks, from 8.0% to 8.6% over the same period. Bajaj Cool Almond Drops witnessed highest offtake amongst new launches in hair oil (4 months since launch) with market share of 1.3% in cooling oils in June19. Low value packs witnessing encouraging growth compared to premium in rural areas. Nomarks brand grew +300% with the launch of Sunscreen and increase in reach. Sunscreen market is growing at +20%. Although major players are Himalaya, Lotus, Garnier, etc, the category is not stabilized. Going ahead, we believe that the rural areas should benefit from stimulus which will help them to garner market share and improve margins.

Financial: In Q1FY20 Net Sales at Rs 240 crore Vs Rs. 223 crore in Q1FY19 up 8%. Net Profit at Rs. 56 crore in Q1FY20 up 8.9% from Rs. 52 crore in Q1FY19,whereas EBITDA stands at Rs. 74.6 crore in Q1FY20 vs Rs. 68.6 crore in Q1FY19 up 8.7%.

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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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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