Markets have fallen around 12 per cent from peak levels. However, carnage in the broader markets have been tremendous. It is likely that we will see consolidation of the markets from hereon, with global cues dictating the trend henceforth.
However, we have recommended a few stocks that may still be able to make some money and are great stock picks in India.
Jammu & Kashmir Bank
Jammu & Kashmir Bank (JKB) is majority owned by the J&K state government. However, it is largely treated more as a private sector player, than a government entity.
For the last few quarters, we have seen Jammu & Kashmir (JKB), trying to show an improved level of performance through recoveries in non performing assets. In fact, for the quarter ending June 30, 2018, the performance was better, when compared to the corresponding period of the previous quarter.
Net Profit was placed at Rs 52.59 crore for the quarter ended June, 2018 as compared to Net Profit of Rs 30.19 crore during the quarter ended June,
2017. The cost of deposits for the bank fell to 4.83 per cent, as compared to 5.27 per cent.
J&K Bank: Cheap on valuations
The stock of JKB has slumped from levels of Rs 90 to the current levels of Rs 40. The carnage in the markets over the last few months has been such that some stocks have been beaten out of shape.
We believe that JKB is making conscious efforts on recoveries. The bank's capital adequacy at 12.42 per cent as on June 2018 has also been decent. The bank would also continue to get support and business from the state government.
By 2020-21, we believe the bank should be able to clean much of the books and report an EPS of Rs 10. It has a small equity capital and hence improvement in net profits can send the EPS soaring. An attractive stock to buy at Rs 40.
The good thing about Coal India is that the shares are unlikely to fall in case there is a sudden market crash. This is largely on account of the dividend that the company pays.
But, that is not the only reason to be buying the stock of Coal India.
The company is likely to report a good set of numbers for the quarter ending June 30, 2018 on the back of solid growth in volumes. Sales volume has already gained11.2 per cent year-on-year.
International and domestic prices are also expected to remain firm, which should boost domestic profitability.
With the government's continued emphasis on "power for all", demand for coal is expected to remain robust.
Coal India: Good on dividend yield
The wage hike, which has impacted profitability in the past, is also likely to be behind. Apart from this, the company is also having additional evacuation capability of 26 metric tonnes per annum at Jharsuguda & Tori sidings, which could drive volumes in the coming days.
The most interesting part about Coal India is the dividend yield that the company offers. Based on the dividend declared last year, the shares are available at a dividend yield of 7.5 per cent.
However, we do anticipate that the company will declare an even better dividend this year. Buy Coal India, for regular dividends and price appreciation.This is a good defensive stock to have on one's portfolio.
Balrampur Chini Mills
The government recently announcement a hike in ethanol for blending in petrol by 25 per cent. This is likely to benefit a company like Balrampur Chini.
The company has third-largest distillery capacity in the country with 360 KLPD (kilolitres per day).
Balrampur Chini also has some hedge in the form of its distellery unit and saleable power co-generation capacity of 163.20 megawatts.
The Company's 10 factories in Uttar Pradesh possess an aggregate cane crushing capacity of 76,500 tonnes per day. The company has managed to reduce its interest costs over the years, which is a big positive.
In fact, the company has no major capex in pipeline
At some stage, sugar prices should rally as demand and supply maintain an equilibrum. A good stock to buy for the long-term in India.
Shares in Balrampur Chini Mills have fallen from levels of Rs 170 to the current levels of Rs 101.
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