Lower share prices, need not necessarily be the best and investors should know, that there are risks. Having said that, there are also stocks that can give good returns over the more long term. We warn investors, that these are high risk stocks, and invest in them, if you have an appetite for risk. Most of these stocks are under Rs 50.
We need to warn investors. This stock has fallen from levels of Rs 108 to Rs 54. This after Target Corporation of the US severed ties with the company after the company substituted cheaper variants of cotton in its bedsheets, while supplying to Target, instead of the high quality Egyptian Cotton. The price of the shares slumped following the announcement
There are reports that lawsuits have been filed against the company in the US. However, what is important to note that Welspun India is Asia's largest terry towel manufacturer and the second largest in the world. The company exports its products to the top 12 retails chains out of the top 20 across the globe.
From that perspective it is a solid manufacturer, with a solid market share. Even if it loses 10 per cent of its revenues, due to Target severing ties, it still can explore other markets.
A high risk bet at the current price of Rs 54. If the company manages to resolve its problems with its clients, this stock could rock all over again.
Dr Morepen Lab
Dr Morepen makes the famous "Burnol brand". There are reports that the company may now sell its over the counter products, to the Ajay Piramal Group. Over the past few quarters, the company has not been able to churn out impressive results.
For the quarter ending June 30, 2016, the company reported a net profit of Rs 4 lakhs. The stock can be a good bet, if there is robust cash proceeds from the same to the Ajay Piramal Group.
Shares of Morepen Labs were last trading at Rs 26.35 on the NSE.
Gammon India is associated with some of the finest construction projects including the Construction of the foundations of the iconic Gateway Of India, Mumbai in 1919. It also constructed the longest railway tunnel in Asia for Konkan Railway at Ratnagiri, The longest urban flyover at Hebbal for the Bangalore Development Authority - 5.3km, Terminal building for Sharjah International Airport and a host of other projects, which are prestigious.
Recently, the stock surged after the National Highways Authority of India, awarded the company some orders.
At Rs 17.70, the stock has the potential for an upside, as the government's development agenda, will help the company, particularly in roadways and infrastructure.
This stock is currently trading at Rs 44. We like the stock for a number of reasons. The first is that non performing assets of the banking sector may have peaked.
Secondly, there has been capital infusion in government sector banks and lastly there is likely to be a turnaround in performance of public sector banks.
Yes, the bank has seen a spike in NPAs like most other banks, but, we expect that situation to improve in the next 2-3 years, by which time you may not get the shares at the current levels.
A good buy if you want to hold the shares for 2-3 years.
Hindustan Construction is like Gammon India and has built some of the finest projects in the country, including the iconic Bandra-Worli sea link, first Thermal power plant in Mumbai, first water treatment plant 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.
Recently, the company said that it can reduce debt by half, after the company allowed arbitration awards to be settled quickly.
This would halve its debt, which would see profits shoot-up sharply. Not a bad bet at Rs 37.60.
Noida Toll Bridge
Noida Toll Bridge operates the Delhi Noida expressway. It gets a steady stream of toll, from running the expressway.
The one good thing about the stock is that it declares dividend of 30%, which on a price of Rs 22, takes the dividend yield to 13 per cent.
Thus the dividend returns are way higher than bank deposits and which are also tax free.
Bank of Maharashtra
Bank of Maharashtra is another play on the PSU banking space on hopes that non performing assets at some stage would see a sharp improvement. The stock at Rs 31, has very little downside risk. If you are ready to invest for 3 years, this stock could give good returns.
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