The benchmark Indian indices have fallen for 10-straight days in a row. The Nifty has lost almost 700 points in the last 10 days and the Sensex almost 2,500 points. The carnage in some of the beaten down names could make these stocks attractive, if there is a sudden comeback. Here are a few stocks that could be attractive:
IndiaBulls Housing Finance
There were reports that some of the institutions have upped their stake in the housing finance company. The company has largely been insulated from the NBFC crisis and is relatively stronger as compared to some of its peers.
However, what is most interesting about IndiaBulls Housing Finance is the dividend yield. If we assume that the company with a slightly subdued performance would reduce its dividend to Rs 40 per share for 2019-20, the dividend yield on the stock still works to 6.15 per cent, which is way higher than what savings bank returns offer.
The fundamentals too of the housing finance company are not too bad. The stock is trading at a p/e of just 7 times one year forward earnings, which is not very expensive. A good stock to buy on decline.
The stock of Yes Bank has been hammered, following a poor set of quarterly numbers. The bank reported a net loss of Rs 1,507 crores for the quarter ending March 31, 2019. However, the losses must be viewed in the context of better governance and adhering to tighter provisioning, which would benefit the bank in the longer term.
The downside risk on the stock is limited at the moment, which makes the shares a very interesting buy at the moment.
Our own belief is that the bank would be able to report an EPS of Rs 12 by 2019-20. The stock is available at a forward p/e of around Rs 13 times, which is not very expensive. The price to book at around 1.1 FY 2021 BV makes the stock attractive.
Election results hold the key
The above two stocks are largely meant for investors willing to hold for the long term. In fact, in the immediate short term the markets maybe exceedingly volatile due to the election outcome. This has been the most difficult election results to predict due to the mahaghatbandhan in UP.
Also, one is not sure how unemployment and rural distress would play out in the voting pattern of the electorate. Along with Uttar Pradesh, the state of Maharashtra would also hold the key for the NDA's return to power.
The fall in the markets in the last few days suggest that the markets have got nervous and there are some indications that the BJP would need the help of regional parties. they may have to bank on the YSR Congress, BJD or TRS.
Not a good time to sell
In any case, with the markets come-off a great deal, it barely makes sense to sell at these levels. India has also flourished under coalition politics and there is no reason to be overly pessimistic. All in all, we are living in interesting but volatile times.
This article is strictly for informational purposes only. It is not a solicitation to buy, sell in securities or other financial instruments. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author of this article do not accept culpability for losses and/or damages arising based on information in this article.