3 Growth Stocks To Buy After The 17% Fall On The Nifty From Record Highs

The Sensex has fallen more than 10,000 points from record highs of 62,200 to the current levels of 51,200. Here are 3 growth stocks to buy after the sharp fall in the Sensex.

HDFC Bank

Shares in HDFC Bank have hit a new 52-week low of Rs 1278, which is almost a 30% knock from 52-week high levels of Rs 1725, hit in October last year. A few positives that have always been the case for HDFC Bank is to churn out growth rates of around that 20% mark. The sharp fall in the share price of HDFC Bank, makes it cheap at a trailing p/e of 19 times. This is way lower than the 10-year averages that HDFC Bank has always commanded. The bank has always got premium valuations, but, that does not seem to be the case now. If the bank continues to grow at even 15%, the p/e ratio drops to nearly 17 times, one year forward earnings. We believe this is extremely attractive for a bank like HDFC Bank, which has got its Non Performing Assets in control. Having said that, this is a stock that will give you steady returns, if the market rises and not runaway returns. If you are looking to double money in 2-3 years times, better invest in small caps.

Sun TV

This is a stock to accumulate for many reasons. The first is that it is a debt free stock, which is good when interest rates are rising. The stock has dropped from levels of Rs 609 to the current levels of Rs 409, which makes the trailing p/e just 9 times. With one of the top broadcasting players with a solid reach, SUN TV stock deserves a better discounting. Apart from this, the company also owns the Sunrisers Hyderabad franchisee.

Sun TV, which owns Sunrisers Hyderabad will earn Rs 400-500 crore per year on a net basis over the next five years, according to news reports. Overall, SUN TV owns Thirty Three channels in six Indian languages and 68 FM Radio Stations. This is a solid presence across the media space.

In short, the company deserves a better discounting than the 9 p/e than is accorded to it. We believe that the media space has the potential for gains, which makes the stock a good bet at the current levels. The stock also gives a pretty good dividend yield of 3.29%.

Oracle Financial Services

Majority owned by the US based Oracle Financial Services, we believe this is a stock that investors should accumulate on declines. The company has a dividend yield of 6.39% on the stock, which is not bad at all. Oracle Financial Services largely caters to the insurance and banking sector. Over the last few quarters, the earnings has been pretty much flat. The stock commands a trailing p/e of just 14 times, which is way lower than what other companies from the space are commanding. There is a possibility that the stock should get re-rated, making it a good pick at the current levels.

Disclaimer

Investors are advised caution as the markets have become exceedingly volatile. There is a possibility that even dividend stocks could fall, thus eroding investor wealth. Neither Greynium Information Technologies, nor the author, would be responsible for any losses based on a decision reading the above article. Every effort has been made to provide accurate information and readers should understand the inherent risks before investing in the markets.