With the markets rallying to close at a 1-year high it is time to be selective in stocks. Many stocks have become horribly expensive and it is become extremely difficult to find good quality stocks. Here are some stocks below Rs 100 that are good bets to hold for at least 2-3 years.
This is amongst the oldest and reputed construction companies, which has built the iconic Bandra-Worli sea link, first Thermal power plant in Mumbai, first water treatment plan in Mumbai, first underground power house in Bihar, first port impounded dock in West Bengal, first nuclear power project. The list of firsts to the company's name are plenty.
The company has stated that it could reduce its debt by half, after the government recently asked that infrastructure companies should be paid arbitration awards quickly.
The shares are trading at Rs 40 (Re 1 face value), which is at a 1-year forward p/e of 18 times. A good bet considering the huge contracts in hand.
Aro Granites, reported a whopping 150 per cent growth in net profits, for the quarter ending June 30, 2016.
The company has a reasonably low debt to equity ratio of 0.70 times. The promoters shareholding is also high and no shares are pledged.
We believe that at the pace with which construction activity is growing, there would good demand for the company's products. The stock is trading at just Rs 70, with a small equity capital of Rs 15 crores. It can report an EPS of 12, which makes the p/e just 12 times one year forward earnings.
A good play for the long term.
Federal Bank reported numbers that were not in line with street estimates. The company saw slippages and non performing assets going higher.
However, the stock has reacted significantly in the last few weeks and has fallen from Rs 76 to Rs 71.
The weak quarterly performance had an effect on the share price of the bank. However, at these levels the stock becomes a good buy for a number of reasons. Federal Bank may report an EPS of close to Rs 8 for the current financial year. This means the stock is trading at just 9 times p/e. This is certainly low for a private sector bank with non performing assets well under control.
The bank has a solid network and is likely to improve its CASA going forward. The share price of Federal Bank looks attractive at the current levels.
Like Federal Bank, Syndicate Bank also saw its asset quality deteriorate. But, unlike other public sector banks the gross NPA's are slightly better. Syndicate Bank along with Canara Bank has been able to contain its NPAs much better.
We expect another quarter of pain for many banks, including Syndicate Bank. However, we believe that the capital infusion by the Union government for owned banks is a good move. This could augur well for a bank like Syndicate Bank. Hopes of an economic recovery could make the stock attract at current levels of Rs 75
Sintex Industries has dropped from levels of Rs 140 to the current levels of Rs 77. The company reported a decent net profit of Rs 62 crores for the quarter ending June 31, 2016. The EPS for the full year can be around Rs 8, which translates into a p/e of 9.
The stock is a good bet at the current levels. The economic recovery is gathering momentum and we could see much better performance from companies like Sintex Industries. The stock is a good long term bet.
Andhra Bank shares are currently trading at Rs 58. We believe that like Syndicate Bank the worst must be over for this bank. The non performing assets may have already peaked for the banking sector as a whole. In the coming quarters we could see gradual improvement in the non performing assets of the banking sector, particularly, the government owned banks.
In fact, Andhra Bank was among the few government owned banks that declared a dividend this year. Going forward there could be a lot of improvement in the non performing assets of the bank.
The noise surrounding the launch of Reliance Jio has pushed the shares of Idea to a 52-week low.
Yes, there maybe some competition, but, we have seen that in the past.
Idea shares have already fallen very low and from here on, the risk looks low.
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Also read: The best dividend yield companies in India