1)Engineers India Ltd - A public sector company which has grown by leaps and bounds over the years and has posted excellent current quarter results. Some of the key positives in this company are:
- Steady revenue growth and high positive operating cash flows. A high pomoter holding of 90% makes the stock price movement less volatile.
- Presence across infrastructure areas and while the sector will slow down in near term the long term growth story for India is dependent on this sector.
2)Steel Authority of India (SAIL) Ltd - Another public sector entity which has been beaten down in the recent market carnage. This stock also has very strong fundamentals and looks attractive at current valuations for long term. Some key positives in this stock are:
- The company has huge cash reserves of over Rs. 13,000 crores and this puts them in a comfortable position in a tight lending enviornment. Also revenue growth has been steady and while the current scenario might lead to decline in revene growth in this sector and company also the long term prospects are what matters now and that is very bright.
- High promoter holding and low FII holding are always good things for any stock buy these days and SAIL falls in that category.
3)NTPC Ltd - This is another PSU which investors would not mind having. The company has given good returns in the past and is one sector where there is a huge demand supply mismatch as far as India is concerned. This factor alone will keep steady revenue growth for the company. Some other positives on this company are:
- Just like SAIL, NTPC too has a huge cash reserve and excellend operating cash flow position. The overall fundamentals of the company are strong and expansion and growth funding should not be a concern for it.
- The shareholding pattern also looks good with low FII holding. The free reserves per share of the company is excellent at Rs 52 per share.
4)Container Corporation of India Ltd - This logistics sector stock, which happens to be another PSU is also one with huge growth potential and can give stunning returns to shareholders in the long term in my opinion. As compared to global standards the Indian logistics industry has a long way to go and companies like CONCOR will be one of the major beneficiaries of the growth story.The positive aspects for this company are:
- Strong financial growth over the past few years. High positive operating cash flows and good capital expenditure made over the past few years to bring in good revenue growth in the future.
- Excellent balance sheet position with no debt. One area of concern for short term is high FII holding and any big stake sale can trigger significant price fall. But over long term this is not a big issue.
5)Aegis Logistics Ltd - This is not a PSU nor is it a big company. But this company can be a potential multibagger in my opinion. Its also into logistics business but Aegis is the only listed player in the liquid logistics segment in India. The ompany has also made a foray into auto gas retailing in India. Some other key points to note on this company are:
- Steady revenue growth over the past five years. Positive operating cash flows. Significant capital expenditure incurred over the past few years which will fuel future revenue growth.
- Low FII holding in the stock.
These are just few companies which one will not regret having in their portfolio five years down the line. The article does not discuss in details the business of the companies but those factors have been taken into consideration while selecting the company. The article just discusses some of the financial factors to look into for selecting the company.
Low FII holding has been stressed as these days FII's are exiting Indian markets in a big way and for now its a safer thing to buy stocks with low FII holding to avoid volatility in stock price movements.
No comments:
Post a Comment