The Sensex has moved in a narrow range for most of the days, with the Nifty breaching the 9,600 points mark rather comfortably. Here are a few Nifty Stocks to buy, which could be worthy of investment for the long term.
Larsen and Toubro
This is India's largest Engineering and Construction company that would capitalize on the growing infrastructure development in the country. It also has huge orders from abroad having delivered and constructed several of them. The company is associated with some of the finest marquee projects across India and abroad including the Wankhede Stadium, Mumbai, Cyber Towers Hyderabad, Vizak Steel Plant, Stadium in Barbados, Sheikh Khalifa Interchange, UAE, Salalah Airport, Oman etc. The company has very diverse interests, including those in Finance and IT as well. It has several subsidiaries, joint ventures in India and abroad as well.
L&T numbers look superb
The company reported a superb set of performance for FY 2016-17, wherein the profit after tax jumped 43 per cent and the order book was up by 5 per cent. The company had an order book of Rs 2613 billion. Now there are a few things apart from the order book that makes the stock interesting. The first is that we are seeing a lowering of debt. Gross debt/equity has fallen to 1.75 as on March 31, 2017 from 1.87 in March 2016. The order book of the company is large and diversified, which offers hedge against cyclical volatility. The EBITDA Margin of the company has also improved by 50 basis points. In FY 2017, the company has seen significant orders from the hydrocarbon space which improves revenue visibility going forward.
L&T: Fundamentally a superb story
Larsen and Toubro is presently focusing on profitable execution of the large order book, selective order booking and timely delivery schedules. For the quarter ending March 31, 2017, the company reported an EPS of Rs 32. If it continues at the same pace, the company should easily report an EPS of Rs 125 in FY 2017-18. The company's shares at a price of Rs 1,700 is trading at a p/e of just 13 times, against Sensex companies one year forward earnings of 18 times. So it is relatively cheaper. We believe that this company has a proven track record in execution and the order inflow is robust, making it a good stock to own at the current levels.
Reliance Industries: A best Nifty stock to own
This share has been an underperformer for so long and is now finally firing. The petchem business, the refinery business, the retail business and the telecom business (Jio) are all super performers. Now, let us take a look at what makes the stock interesting at the current levels. The company 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.
Reliance remains a good long term stock
Reliance Industries remains a fundamentally strong stock. For the quarter ending March 31, 2017, the company reported an EPS of Rs 27. The company can report an EPS of Rs 120 for 2017-18. This means the stock at the current market price of Rs 1344, is barely trading at 11 times one year forward earnings. A good stock to buy at the current levels.
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