It's time of the year, when most companies declare their annual results, as well as dividends. It was a bad year for companies in the banking and infra space. The benchmark indices have also given negative returns in the last 1 year. Against this backdrop investors have to be very selective and buy stocks that can yield good returns. Here are 7 shares under Rs 100 that have the potential for super returns.
NCC is among the top players in the infrastructure space, having completed landmark projects. It is executing orders in airports, sea ports, roadways, power etc.
Its subsidiary, NCC Urban is among the top players in the reality space. For the quarter ending March, the company reported a net profit of Rs 56 crores. Going forward there is tremendous visibility of revenues, due to the huge order book position.
The company can report an EPS of up to Rs 7 for March 31, 2017, which takes the p/e ratio to a mere 10 time 1 year forward earnings. The stock can rally on the back of economic recovery and hence solid earnings.
It needs a brave heart to recommend a PSU banking stock in the present scenario, given the huge non performing assets. However, we believe that in the next 1 year, this would be addressed.
As we write, Arun Jaitley has once again reiterated his commitment to clean-up the NPA mess. We believe that at some stage this would happen, which is when you would not get PSU banking stocks so cheap.
You cannot have good news and cheap prices. If there is an economic recovery, expect PSU banking stocks to rebound first. We believe that Syndicate Bank has better managed NPAs and is the better managed PSU bank. Great stock to make money
Sintex is a stock that holds a lot of potential and is undervalued. The company is the largest player of plastic tanks across the globe. Today it is pretty much diversified into textile, chemicals etc.
There are a number of reasons why Sintex is a good buy. One is that the stock has fallen from levels of Rs 120 to the current levels of Rs 79. At the current levels the p/e ratio is a mere 6 times 1 year forward earnings. The stock is also available below its book value. Should there be an economic recovery, expect the stock to double in the next 3-4 years.
Buy NMDC because you get a dividend yield of 8 per cent, that is tax free. Remember the stock has fallen from levels of Rs 140 to Rs 90. Should there be a revival in global economic growth, the bounce back in this stock could be huge, as with all commodities.
It is a player in the iron ore business and iron ore prices would rise, when there is global economic recovery.
Cash rich, debt free, hefty dividend paying stock.
Canara Bank is more or less like Syndicate Bank. High NPAs have dragged the stock from levels of Rs 380 to Rs 190. Should there be an economic recovery, the stock can easily double in the next three years or so.
The bank should also benefit from the government's efforts of cleaning-up NPAs in the banking sector.
L&T Finance Holdings
L&T Finance Holdings reported a strong set of numbers for the quarter ending March 31, 2016. NII growth was 18 per cent, led by strong 22 per cent growth in advances. Loan growth was also very strong in the wholesale business (29% YoY growth) while retail book growth stood at 17% YoY (including housing finance).
The Asset quality improved with gross NPLs declining 28 basis points.
Strong pedigree and opportunities to expand business, if the economy grows are highly possible.
The stock is a good bet at the current price of Rs 70.
A lot has been done and said in the Union Budget to boost agricultural income. The government's emphasis on doubling farmer income in 5 years, is likely to see fresh allocation to the agricultural sector.
The company has manufacturing plants in 29 locations and has is engaged in micro irrigation systems, plastic pipes & products, agro processed products, tissue culture plants.
We believe in the next three years or so, the company could see remarkable improvement in earnings and this should be reflected in the stock price.
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