Best stocks to invest in 2012

If your exiting equity portfolio is not performing well or if you are still confuse to make your first investment in equity – We are herewith Best pick for equity investment in 2012 which may help you. 

Although 2011 equity market has disappointed many of us 2012 seems to be better year in terms of stock market. You might have seen positive impact on market due to Q3 results announcement and several other reasons. 

To help you out selection is made in such a fashion so that most of sector is covered and your portfolio will be diversified portfolio. At end of each selection analysis is given that why we have selected this stock.  We think that investment in these stocks will provide you better return in future, however one has to keep in mind that investment made in stock market is risky, one has to track his/her portfolio regularly and take appropriate action on buy/sell in order to make more profit or to save portfolio from losses.

Market Tracker  Capital goods Sector:-

Larsen & Toubro Limited:-

This company has strong brand name and good track record. L&T’s business portfolio has wide range Hydrocarbon, Heavy Engineering, Power, Infrastructure, Defense, Electrical, Information Technology, Turbines, Boilers, Forging, Railway, Piping, Construction, Medical Equipment’s, Ship Building, Aerospace and Finance. Diversified portfolio gives added advantage to this company.

If you are thinking for long term investment as per us this stock is better bat. Although recently this stock has touch 52 week low due to various factors inflation, liquidity, policy issue etc, but this issues can remain forever history shows that this stock has given better returns.

Recently company has bagged road project order worth Rs 2164 carore,  Rs 388 carore order was bagged for constructing residential towers. L&T’s  outstanding order book stands at 1,52,609 Cr. 3.2 x times FY 2011 revenue. 

Restructuring of business segment as independent companies is about to complete, They are companies within a company with one single balance sheet.  This will give better boost to L&T. CMD Mr.A.M.Naik is about to retired but sources said that Successor Plan is already in place will be announced soon.

Looking at all above factor with current CMP of 1274 Rs/- SG Price target on the stock is : 1500 Rs/-

Report Card:-

AttributeValueDate
PE ratio19.6020/01/12
EPS (Rs)65.01Mar, 11
Sales (Rs crore)11,245.24Sep, 11
Face Value (Rs)2 
Net profit margin (%)8.82Mar, 11
Last bonus1:129/05/08
Last dividend (%)72519/05/11
Return on average equity18.44Mar, 11

BHEL:-

Bharat Heavy Electricals Limited is our second bet for 2012. BHEL is one of the oldest and largest state-owned engineering and manufacturing enterprise in India in the energy-related and infrastructure sector which includes Power, Railways, Transmission and Distribution, Oil and Gas sectors and many more. In 2011, It ranked ninth most innovative company in the world by US business magazine Forbes.

Current order book is around 1,61000 carore Research shows that BHEL is profit making company since past 30 year (since inception 1972) & continuously paying good dividend to shareholders.

BHEL has huge cash reserve & also planning to make NBFC in order to take advantage of huge cash surplus. Debt of company  is considerably low which is another good reason to invest in company as it is lest affected from interest burden.

Looking at all above factor with current CMP of 273 Rs/- SG Price target on the stock is : 400 Rs/-. One who is falling in moderate risk profile we advise them to keep this stock under their portfolio.

Report Card:-

AttributeValueDate
PE ratio11.1420/01/12
EPS (Rs)24.56Mar, 11
Sales (Rs crore)10,545.51Sep, 11
Face Value (Rs)2 
Net profit margin (%)13.99Mar, 11
Last bonus1:125/01/07
Last dividend (%)17923/05/11
Return on average equity29.82Mar, 11

Metal/Mining Sector :-

Coal India :-

Coal India Limited  is  coal mining company headquartered in Kolkata and the world’s largest coal miner with revenue exceeding 60,245 Crore (FY2010-11). It produces around 81.1% of India’s overall coal production. It commands nearly 74% of Indian coal market. In April 2011, CIL was conferred the Maharatna status by the Union Government of India and regarded as one of the most valuable Indian company.Coal India Limited is ranked #10 in the list of top companies in India in Fortune India 500 list in 2011.

Coal is required for power generation and looking forward to power requirement of india & world demands are never goanna drop. Stock has seen its all time high 422 Rs/- and then seen downside due to various policy and worker wages related issues. Wages issues is solved by CIL by giving 25% wages rise to worker, This wage hike will be burden to company but looking at current position and requirement of Coal we recommend this stock to buy/hold in your portfolio. If you are planning to buy this stock with current CMP of 343 Rs/- SG Price target on the stock is : 410 Rs/-.  

Report Card:-

AttributeValueDate
PE ratio46.2420/01/12
EPS (Rs)7.43Mar, 11
Sales (Rs crore)66.87Sep, 11
Face Value (Rs)10 
Net profit margin (%)85.35Mar, 11
Last dividend (%)412/05/11
Return on average equity24.3Mar, 11

Auto Sector:-

Maruti Suzuki Limited :-

Maruti Suzuki Limited is leader in Indian automobile industry. Maruti Suzuki offers a complete range of cars from entry level Maruti 800 and Alto, A-Star, Swift, Wagon-R, Estillo and sedans DZire, SX4, Maruti Eeco and Sports Utility vehicle Grand Vitara. 

MSIL has  very good sales and service network across the country, It has strong support of its Japanese parent for R&D and data shows that  it is top most choice for car buyers.  MSIL has plan of capacity expansion by 2.5 lakh units in FY12 and another 2.5 lakh units in FY13. Another plus point about Maruti is strong balance sheet   with huge cash resources increase in assets, Investment which will generate income & debt component is low. 

Last year there were issue related to workers strike at Maruti Suzuki’s Manesar plant which was ended in Oct,2011.  After strike huge backlog is challenge but company is gear to fulfill that. Valuations of the stock is quite conducive with the stock currently trading at 1099 Rs/- . Stock has seen all time high value at 1740 Rs/- . We are quite optimistic about this stock and with current CMP of 1099 Rs/- SG Price target on the stock is : 1250 Rs/-.  

Report Card:-

AttributeValueDate
PE ratio14.0117/01/12
EPS (Rs)79.21Mar, 11
Sales (Rs crore)7,831.62Sep, 11
Face Value (Rs)5 
Net profit margin (%)6.13Mar, 11
Last dividend (%)15025/04/11
Return on average equity16.5Mar, 11

Banking Sector:-

Axis Bank Limited :-

Axis Bank Limited, formerly UTI Bank, is a financial services firm that had begun operations in 1994, after the Government of India allowed new private banks to be established. 

Recently Axis bank has reported Q3 results which are better than expected net profit of Rs 1,102 crore for the third quarter of FY12 as against Rs 891 crore in the corresponding quarter of last fiscal. Gross non-performing assets (NPAs) came in at 1.10% in the quarter ended December FY12 versus 1.09% in a year ago quarter. Net NPAs stood at Rs 683 crore versus Rs 385 crore during the same period. As the result impact stock rose 6% and trading on 1008 Rs/- 

Axis Bank has a very healthy fee based income. This stock is recommended for long term investment. Looking at all above factor with current CMP of 1008 Rs/- SG Price target on the stock is : 1130 Rs/-

Report Card:-

AttributeValueDate
PE ratio12.2120/01/12
EPS (Rs)82.54Mar, 11
Sales (Rs crore)5,776.96Dec, 11
Face Value (Rs)10 
Net profit margin (%)17.20Mar, 11
Last dividend (%)14022/04/11
Return on average equity17.83Mar, 11

 State Bank of India :-

State Bank of India (SBI) is the largest banking and financial services company in India by revenue and total assets.SBI provides a range of banking products through its vast network of branches in India and overseas, including products aimed at non-resident Indians (NRIs). The State Bank Group, with over 16,000 branches, has the largest banking branch network in India.  

Face value of this share is 10 Rs/- but it is trading at 1931 Rs/. Current Earning per share (EPS) is very high comparative to other share in same space, which is one of the factor for investment in this stock. In PSU bank segment this is best buy.

 With current CMP 1931 Rs/- SG Price target on the stock is : 2130 Rs/-

Report Card:-

AttributeValueDate
PE ratio14.8420/01/12
EPS (Rs)130.15Mar, 11
Sales (Rs crore)25,967.09Sep, 11
Face Value (Rs)10 
Net profit margin (%)8.55Mar, 11
Last dividend (%)30011/05/11
Return on average equity12.71Mar, 11

IT sector :-

Infosys :-

Infosys Limited is a global technology services company headquartered in Bangalore, India.Infosys has a global footprint with sales offices in 29 countries and development centers in India, US, China, Australia, UK, Canada, Japan and many other countries.

 “Infosys, India’s second largest software exporter, reported a strong 31% YoY rise in consolidated revenues to Rs 9,298 crore for the quarter ended December 2011. This results on the revenue, margin and profit fronts were above our expectations led by rupee depreciation. But, a disappointing Q4FY12 guidance was consistent. However, we believe that improving economic outlook from the US would translate into better-than-expected tech spending in FY12.

 The Company aims to focus on long term growth by investing in platforms & solutions. This will accelerate innovation, thereby enhancing returns for clients & delivering higher business value.

 Looking at above factors with current CMP 2583 Rs/- SG Price target on the stock is : 3103 Rs/-

Report Card:-

AttributeValueDate
PE ratio23.0220/01/12
EPS (Rs)112.25Mar, 11
Sales (Rs crore)8,696.00Dec, 11
Face Value (Rs)5 
Net profit margin (%)24.31Mar, 11
Last bonus1:114/04/06
Last dividend (%)30022/09/11
Return on average equity26.29Mar, 11

Disclaimer:-

INVESTING / TRADING IN STOCK MARKETS INVOLVE SUBSTANTIAL RISK 

These recommendations are based on the theory of technical analysis and personal observations. This does not claim for profit. We are not responsible for any losses made by traders. If any other company also giving same script and recommandation then we are not responsible for that. We have not any position in our given scripts. Visiting our web one should by agree to our terms and condition and disclaimer also.

Article by Raviraj

Hi, I am Raviraj. I am passionate about money matters and finance. I have 10 years of rich experience in the field of financial planning, Investments & Insurance. I have written 850+ article on this blog. If you like my efforts kindly subscribe to this blog and also let your friends know about this website by sharing.

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4 Comments

  1. Shitanshu says:

    Gr8 Target given for Axis Bank :-1130 Rs/- also achieved.

  2. P C Kapadia says:

    Target achieved for SBI – 2130 Rs/- and Maruti Suzuki -1250 Rs/-.

  3. shitanshu_ec says:

    Share Market Rocks !!

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