Best Shares To Buy For Short Term In July 2019
Jul 09, 2019 | 16:02 PM IST
Jul 09, 2019 | 16:02 PM IST
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 July 2019, read Best Short Term Stocks To Buy Today if you are looking to buy shares today.
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.