Sharekhan is a leading online brokerage firm has issued report with identification of Best Midcap and largecap stocks for 2014. Each stock identified in this report is leader in its own sectors. Let’s look at Best Midcap and Large cap stock picks for 2014 by ShareKhan.
ITC
ITC leading FMCG Company’s business is not affected much by slowdown. As product range offer by company is in category of daily consumer need. As per sharekhan volume growth in the cigarette business would pick up (4-5%) in FY2015 on a lower base in FY2014 (dented by steep price hikes post-increase in excise rates)
This stock will offer good return and sharekhan team recommend adding this stock in to portfolio on correction.
Key risk: another round of a steep hike in excise duty
Also read: – 5 Stocks that can give good return in 2014
M&M
Another stock pick from Sharekhan is from auto sector M&M. Sharekhan says that the tractor segment of M&M contributing about 40% of the revenues & its likely to maintain a double-digit growth in 2014. Automotive volumes are expected to recover in FY2015 on the back of a conducive macro-economic environment.
Sharekhan also believes that new product launches would help regain market share in the utility vehicle (UV) space
Key risk: a delay in the recovery of the UV segment & increased competitive launches may further reduce the market share
ICICI Bank
ICICI leading private sector bank of India is also in stock picks 2014. Bank is continuously growing its position by doing active marketing. With significant improvement in the liability profile, the bank is poised to expand its market share especially in the retail segment ICICI Bank is among the well capitalised banks and is better prepared to face asset quality challenges.
Key risk: continued slowdown in the economy would add to asset quality stress
L&T
Leading engineering, manufacturing & infrastructure giant is strong contender of 2014.
Strong order inflow guidance indicates healthy revenue visibility; diversified presence, superior execution capability and healthy balance sheet remain its strengths. The ongoing efforts to improve its returns ratios by monetising the long-term development assets are going to be a positive trigger for the stock.
Key risk: a significant delay in the capital expenditure cycle reversal
Also read: – 7 Multibagger stocks of 2014
HCL Technologies
HCL technologies is leading IT company and Technology leader. HCL remains a prime beneficiary of the emerging rebid/restructuring IT market, which still poses a $45-50 billion opportunity for the company • The company has a proven track record of winning and executing large restructured deals in the past; it has a very robust order book of over $4 billion which provides robust revenue visibility.
Key risk: a prolonged slowdown in the key markets (the USA and Europe) remains a key risk to our investment thesis
Cadila Health
Pharma sector has shown bull run in 2013 and many people still believes that it will continue in 2014. Next pick of 2014 by sharekhan is Cadila Health.
New drug approvals (over 100 abbreviated new drug applications pending) and settlements launches (of Asacol HD in Q1FY2016) in the USA. An improvement in profitability on a better product mix (better traction in the branded formulation business and the launch of niche products in the USA)
The stock is currently available at a 25% discount to its three-year historical average (price/earnings multiple)
Key risk: a delay in obtaining product approvals in the USA
Jyothy Laboratories
Jyothy Laboratories is expected to achieve a strong growth of above 20% in revenues and operating profit, driven by the integration of Henkel, the launch and relaunch of products and the rationalisation of the distribution network.
The recent repayment of debt through funds raised by preferential allotment to promoters and issuance of non-convertible debentures would result in interest cost savings of Rs45-50 crore at the consolidated level from FY2015; this along with a strong operating performance would result in an exponential growth in the bottom line.
Key risk: an increase in competition in some of the key categories
Also read:- Investment Prospective 2014
Raymond
Raymond’s restructuring exercise is largely done (in terms of supply chain revamp, cost rationalisation etc) and the benefits are likely to become visible in the results going ahead; thus we expect the branded apparel business to revive its profitability track record.
The management’s enhanced focus on the monetisation of its lucrative 120-acre land bank (with its core team in place, the master plan for the real estate business is expected soon).
Key risk: slow discretionary spending and high gestation time for monetisation of the land bank
Selan Exploration
Received approvals recently for developing eleven wells in its key oil fields; it has commenced drilling operations and the early signs from the four wells drilled recently are encouraging which would considerably boost production and earnings over the next couple of years.
It remains a debt-free company and its current cash/share is around 25% of its market price.
Key risk: a substantial delay in the commencement of production
Sun TV Network
The implementation of the digital addressable system (DAS) across the country is expected to lead to a sixfold increase in the average revenue per user levels (from Rs4 to Rs15-20)
Given the upside potential from the DAS regime and a gradual recovery in advertising, Sun TV’s growth prospects look favourable going ahead.
Key risk: any major delay in DAS implementation would negatively affect our investment