Best Shares To Buy For Short Term In February 2019

Share Market Weekly

In general, Short-Term investments are considered to be riskier than long term investments. But, short-term investments are important for making more profit from cash savings or liquid assets. Below were the best stocks to buy in Feb 2019, read Best Short Term Stocks To Buy Today if you are looking to buy shares today.

Ashoka Buildcon (NSE: ASHOKA) (Share Price: Rs.122.8):Potential Buy

Valuation: Attractive with TTM P/E 10.70x

Reasons to consider: The companys current order book for the September quarter ended stood at Rs. 9763.7 crore which gives strong revenue visibility for the next three years. Further, robust bidding pipeline worth almost Rs. 35000 crore in the second half of FY19 gives confidence to the companys management to win orders worth around Rs. 4000-4500 crore in FY19E.

Drivers: Ashoka Buildcon is looking to transfer ACL stake to an InvIT. This stake sale through InvIT can help the company to utilise the proceeds to fund HAM projects.

Financial: On financial front, standalone revenue for the third quarter of FY19 came in at Rs. 1065.12 crore as against Rs. 658.92 crore for same period last year, registering 61.6% yoy increase. This was primarily driven by volume growth across the board. EBITDA for the quarter rose by 99.6% yoy to Rs. 148.83 crore from Rs. 74.57 crore with a corresponding margin expansion of 266 bps. EBITDA margin for the quarter stood at 14%. The net profit for the quarter came in at Rs. 62.18 crore as compared to Rs. 46.99 crore for same quarter last fiscal, yoy increase of 32.3%. The PAT margin for the stood at 5.83%.

JM Financials (NSE: JMFINANCIL) (Share Price: Rs.74.45): Potential Buy

Valuation: Attractive with TTM P/E 9.97x.

Reasons to consider: The company has entered into financing of affordable housing segment and also looking at having exposure in retail business. With post-money equity valuation of upto Rs. 7,175 crore for its NBFC subsidiary JMFCSL, JM Financial (Rs. 225 crore) along with external investor (Rs. 650 crore) will infuse Rs. 875 crore. This may lead to increase in the net worth of JMFCSL by 50 per cent.

Drivers: As banks are diminishing in Capital adequacy ratio and ability to give loan at lower rate, refinancing also offer a good opportunity for the company and will act as a major driver.

Financial: On the financial front, looking at the recently concluded quarter Q2FY19, the total consolidated revenue came in at Rs. 975.70 crore, showing 27 per cent YoY jump. The net profit after tax and before minority interest stood at Rs. 240.27 crore, posting 14 per cent YoY jump. Gross NPA and Net NPA stood at 0.5 per cent and 0.4 per cent respectively as of September 30, 2018 compared to 0.6 per cent and 0.5 per cent respectively as of June 30, 2018. The total loan book stood at Rs. 17108 crore as of Q2FY19 as against Rs. 16442 crore as of Q1FY19.

ACE (NSE: ACE) (Share Price: Rs.75.30): Potential Buy (10 Steps To Pick The Best Stocks)

Valuation: Undervalued with TTM P/E 13.28x

Reasons to consider: ACE, a market leader in the pick & carry cranes segment (>60% market share) currently enjoys a demand tailwind. Introduction of newer value added products is expected to boost topline while increasing utilisation levels will provide operating leverage benefits to aid ACEs bottomline.

Drivers: Robust sales of pick and carry cranes with launch of newer product, whereas boost in tractor sales will drive its margin further.

Financial: On the financial front the revenue for the quarter grew ~30% YoY to Rs.362.6 crore mainly driven by robust growth in cranes & tractors i.e. agri equipment segment,EBITDA margin fell ~250 bps YoY to 7.2% largely due to impact of higher steel prices (COGS, up ~460 bps YoY), offset by operational efficiencies due to incremental demand growth. EBITDA was at Rs. 26 crore, down 4.1% YoY. PAT de-grew 9.4% YoY to Rs.14.9 crore.

Cochin shipyard LTD (NSE: COCHINSHIP) (Share Price: Rs.342.05): Potential Buy

Valuation: Undervalued with TTM P/E 9.50x

Reasons to consider: CSL has a healthy order book of Rs. 1607 crore plus L1 status for ASW vessels (Rs. 5392 crore). It is also likely to receive order for phase III of IAC,which is likely to be ~Rs. 10,270 crore (Rs. 3000 crore as fixed price contract and Rs. 7270 crore as cost-plus contract). This takes the total order backlog to Rs. 17,569 crore (adding ship repair orders of ~Rs.300 crore).

Drivers: CSL has planned a huge capex of ~Rs.3000 crore over FY18-21E (Rs. 2768 crore for the new larger size dry dock and repair facility, Rs.100 crore for Hooghly Cochin Shipyard and Rs.150 crore for developing docks at Mumbai, this initiative will help to drive the stock further.

Financial: On the financial front, revenue for the quarter Q3FY19 rose strong by 16.5% YoY to Rs.716.4 crore. Shipbuilding revenues grew 35.4% YoY while ship repair revenues de-grew 20.7% YoY. We expected revenue of Rs.671.5 crore for the quarter EBITDA margins came in at 22.1% vs. 22.3% YoY. Gross margins declined 190 bps YoY due to higher contribution from the shipbuilding segment. Employee expenses grew only 6.9% YoY. Absolute EBITDA grew 15.5%YoY to Rs.158.5 crore Other income declined 2.5% YoY to Rs.49.7 crore. Accordingly, PAT grew 14% YoY to Rs.147.6 crore

NBCC (NSE: NBCC ) (Share Price: Rs.54.35): Potential Buy

Valuation: Fairly Valued with TTM P/E 26.45x

Reasons to consider: Till September ended quarter the company has bagged orders worth almost Rs. 10,000 crore, this resulted into overall order book of Rs. 80,000 crore which gives strong revenue visibility for the next 4-5 years. Besides, it has maintained its order inflows guidance of Rs. 25,000 crore for FY19. The government has announced modernization of 400 railway stations with an investment outlay of Rs. 1 lakh crores. NBCCs management has retained its revenue guidance for FY19E at 3035 per cent.

Drivers: The company has obtained approval from the supreme court to start the construction of two redevelopment projects Netaji Nagar and Sarojini Nagar. The management indicated that construction work for these projects would resume from the first month of 2019.

Financial: During Q2FY19, the companys standalone net sales surged almost 36.6 per cent to Rs. 1,541 crore from corresponding quarter of previous fiscal. However, EBITDA for the quarter declined almost 30 per cent to Rs. 59.11 crore from corresponding quarter of previous year. This can be attributed to change in accounting standard which resulted into decline in EBIT margin of PMC segment. The adoption of new accounting standards resulted into change in accounting treatment of advance payment of PMC margins. But higher other income led 16 per cent yoy growth in net profit to Rs. 85.96 crore.

Yes Bank (NSE: YESBANK) (Share Price: Rs. 185.3): Potential Buy (10 Steps To Pick The Best Stocks)

Valuation: Fairly valued at TTM P/E of 10.47x

Reasons to consider: The companys loan book is likely to grow ~30 per cent in FY19, while risk weighted assets growth would be slower than loan growth. Current focus within retail loans was on building a quality loan portfolio and, hence, yields are low. As the book grows, yields would increase (after FY20), when the bank starts taking-on additional risk.

Drivers: Better capital adequacy and lowering slippages are expected to put yes bank back to top in best asset quality class. Recently the stock has corrected heavily. The management succession plan is yet to be finalised and settled. Thus, at current valuation there is a good scope for value creation

Financial: On financial front, NII for Q3FY19 stood at Rs. 2666.41 crore. The NII rose by 41 per cent. The total income during this period stood at Rs. 8849.81 crore as compared to Rs. 6492.56 crore for same period last fiscal. Further gross slipages stood at Rs. 2297 crore. The IL&FS exposure was seen at Rs. 2530 crore which is the reason to see increase in NPAs. The provision coverage ratio was noted at 44.44 per cent. The net profit after tax noted at Rs. 1001.85 crore. The total loan book stood at Rs. 244000 crore which grew by 42 per cent YoY. The CASA ratio for the quarter stood at 33.3 per cent. Important ratios such as return on assets and return on equity stood at 1.1 per cent and 14.4 per cent respectively on annual basis.

Press to call for Free Trial (022) 3946 4344