All of the Sensex companies have created tremendous wealth over the last 10 and 20 years. They have beaten returns from banks deposits by a hefty margin. However, the holding period of such stocks is rather large and the longer you hold, the more money you can make. We have picked a few stocks from the Sensex companies that we believe have a huge potential to make money for investors. However, we have also picked one stock from the non-Sensex companies, which we believe is one of the best long term stock bets in India.
Reliance Industries had a superb quarter for the period ending March 31, 2017. The petchem business, the retail and the refinery business along with the Jio business delivered on all counts. Reliance Industries reported a record net profit of Rs 29,901 crores for 2016-17. The gross refining margins at $11 was the best we have seen in the last eight years. Improved performance from the retail segment is also firing up the company. The EBITDA of the retail business was up 40 per cent year-on-year at Rs 1,203 crores with 3,616 stores across 702 cities, 13.5 mn sq feet retail space. Jio too was on a path breaking record with 100 million subscribes in 170 days. We believe that going ahead Reliance Industries can report a Rs 125 very easily for 2017-18. This means the stock is available at just 11 times one year forward earnings. This is not bad at all. Check stock quote of Reliance here
Bank of Baroda
If you are a long term investor, it may not be a bad idea to bet on some larger PSU banks. The Reserve Bank of India has recently given 15 days for banks to take legal recourse on the six stressed accounts to be admitted under the Insolvency and Bankruptcy Code (IBC). We believe that banks like Bank of Baroda have two things going in its favour: one is that the capital adequacy of the bank is much better than some peers and the provision coverage ratio is also good, which makes it one of the better managed PSU banks to buy in case it has to take hair cuts. This is nothing but the hits that banks have to take on bad loans. It has a much smaller capital than peers and the price to book value is also not bad. Bank of Baroda is a good pick at the current price of Rs 167. Check stock quote of Bank of Baroda here
Oil India is a company that is engaged in oil and gas production. This is a stock that is a great value pick at the current levels and is quoting very close to 52-week lows. For the year ended March 31, 2017, the company reported an EPS of Rs 19. The shares are quoting at a p/e of 15 times the trailing EPS. The shares of Oil India give you a dividend of 5.43 per cent at the current market price of Rs 294. Should oil prices rally, the shares of Oil India could spike. The shares are quoting at a price to book value of 1 time. Buy the stock from a long term perspective in mind. Check stock quote of Oil India here
Karur Vysya Bank
This is one of the relatively cheaper private sector banking stocks in the country. The NPAs of the bank have been well under control. The stock is available at a 1-year forward p/e of just 15 times, based on FY 2017-18 earnings. The shares are currently trading at Rs 149, which also gives a good dividend yield of 2 per cent. We do not see too much of asset deterioration worries for the bank in the coming days. A good long term stock idea. Check stock quote here
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