The festival of Diwali is celebrated across the country as everyone welcomes the goddess of wealth Lakshmi. Diwali is considered an auspicious time to earn and spend money.
Muhurat means ‘Auspicious hour’. As Diwali is an important day. The stock exchanges open for Muhurat Trading – a special trading session that marks the end of the traditional financial year and the beginning of the traditional New Year. This year special Diwali Muhurat Trading session is on 3rd November, 2013 from 6:00 PM to 7:30 PM.
Trading on Diwali day is a tradition with most transactions having more of a sentimental value than a real portfolio benefit.
Kotak Security has suggested 11 Muhurat Trading Stocks for this Diwali selection of this stocks is done based on Fundamentals.
(1) Infosys Technologies:-
Infosys has recently shown encouraging performance in their in 2Q. This is a result of their revised growth strategy and change in senior management. The risk we hold to our argument is the sharp movement in rupee against various currencies which may directly hit our earnings estimates.
(2) Cairn India Ltd:-
CIL has recently made discovery in Nagayalanka-1z, KG-ON N-2003/1 block. The overall proven plus probable oil reserves & resources are in excess of 1 billion barrels which equals more than 25 years of production.
(3) Cummins India Ltd:-
Company is poised to benefit from the infrastructure spending in the country. The commencement of company’s Phaltan plant is expected to contribute to cash flow generation in future. Company has committed a USD 300mn capex funding through internal accruals only.
(4) DB Corp:-
Strong presence in MP / Chhattisgarh, Rajasthan, Punjab, Haryana regions with a clear dominant position in the newspaper market. Upcoming elections boast a huge opportunity for DB Corp for growth in circulation. This dominance also gives them bargaining power over political advertisers. Modest declines in market price observed recently offers attractive entry point.
(5) ICICI Bank:-
CASA mix at 43.2 % – one of 1he best in country. In loan portfolios. ICICI faces lower risk from SME portfolio due to —5% exposure of total portfolio. Corporate portfolio has been showing consistent performance. Management focus on stable growth with improving structural profitability reinforces positive outlook on the stock.
Company has been focusing on the niche infrastructure financing space and enjoys the best asset quality in its space. IDFC carries sufficient provision buffer to provide for any likely future increase in GNPA. Falling wholesale lending rates in addition to improved view on capital market related business may act as future catalyst on the stock.
(7) KPIT Cummins Infosystem:-
Company management maintains a positive outlook on continued traction in automotive, manufacturing and utility verticals. Revolo, it successfully launched, can provide a significant earnings boost to the company. Management maintains revenue growth expectations at -15% in FY14.
The company who has diversified presence in the Indian infrastructure and industrial sector, holds an order backlog of Rs.1.65 tr which provides strong visibility for next 32 months. The company expects a growth of 20% in their order intake in the current year.
(9) Maruti Suzuki:-
The company among weak domestic vehicles sales is focusing on new export strategies to boost volumes by introducing newer PV models. Increase in localization and SPIL merger benefit will lead to improved margins in FY14. Management expects marginal growth in sales in FY14.
(10)Va Tech Wabag:-
A zero debt company with a benefit of being a cash surplus position, Va Tech Wabag has experienced an increase of over 250% in its order book over 1he past 4 years. The company’s capacity to own execute large orders is now providing a 32 month order visibility worth Rs. 42.8 bn.
(11) Tata Steel:-
Tata Steel India has delivered commendable H1 sales volume growth of 18% Y/Y and has provided a guidance of similar growth in near future. The Europe division production has reached a 2yr high on the back of improved production rates and value added products. TS is the best play amongst domestic steel companies over medium term and should be accumulated on declines on likely week Q2 results.
(The views and recommendations expressed in this section are Kotak Securities own and do not represent those of Moneyexcel.com. Please consult your financial advisor before taking any position in the stocks mentioned)