The markets have run up sharply with the Sensex at a new record high of 22,074 points. Investors would have to focus on individual stocks which have the potential of a rally as some pockets have become very expensive. Here are 4 stocks that could do well if we have a stable government in place.
Low on non performing assets
Even when banks saw the worst of non performing asset (NPAs) worries, Yes Bank came out unscathed and today has NPAs that are almost negligible. At a projected price to earnings multiple of under 8 times, the stock is clearly under owned. In fact, the stock is quoting at just Rs 378, compared to its 52-week high of Rs 578 seen in May last year.
Cash rich company
NMDC is one of the few companies that is debt free and cash rich. The company has cash and cash equivalents totalling Rs 22,000 crores. The company recently hiked iron ore prices. NMDC has a substantial presence in the iron ore mining business and the stock is trading under 10 times price to earnings multiple, based on FY 15 EPS. Investment push by the new government is likely to see the company improving profitability.
Possibility of a banking license
According to news reports IDFC has a very strong chance of getting a banking license. This should push the stock to new heights, if the outcome is positive on the banking license front. In any case the stock is trading at a price to earning multiple of just under 5 making it rather attractive.
Infra spending may boost stock
Bharat Heavy Electricals is likely to be one of the few stocks to benefit immensely if we have a stable government in place. The company is a capital goods player and any boost by the new government on infra and power sector investments is likely to benefit the company immensely. At Rs 197 the stock is attractively priced.