Markets Seem Crushed, 2 Stocks To Buy Now And Build A Portfolio

Though the Nifty and the Sensex are down more than 15%, individual stocks have crashed even more. Some stocks are down 40% from highs, while others could be as high as 80%. Here are a few stocks that have crashed and good be good to build a portfolio.

CESC

CESC is an electrical utility company engaged in generation, transmission and distribution of electrical power. The company owns & operate three thermal power plants generating 1125 MW of power. CESC also has three projects in three different areas of renewable sources. These are Gujarat Solar, which is a solar plant in Gujarat's Kutch generating 9MW solar energy, Hydro Power Venture (Papu Hydropower Projects Limited & Pachi Hydropower Projects) in Arunachal Pradesh, generating 146 MW energy and Wind Power Operation, a 24 MW project at Dangi in Rajasthan.

The company is a good profit making dividend paying company. In fact, the dividend yield on the stock is a solid 6%, at the current market price of Rs 74.85.

Buy the CESC stock after the sharp fall in the share price

The shares of CESC has fallen like most of the markets from levels of Rs 102 to the current price of Rs 74.85. The shares of the company have now turned attractive. In fact, the stock is now very close to its 52-week low of Rs 72.85. At the current market price, CESC trades at a trailing p/e of 12 times. We believe going ahead as earnings improve, the p/e should shrink making the stock even more attractive. The business risk for the company is relatively low, unless there are regulatory hurdles. However, we have not seen that at CESC and it could be business as usual. Good stock to buy for regular dividends and reasonable good earnings growth. A dividend yield of 6% and a low p/e of 12 times, makes the stock very attractive.

Indian Oil: Available with Bonus and dividends

India Oil is the nation's largest oil marketing company. If you buy the stock now, you get a dividend of Rs 3.60 per share, in addition to a 1:2 bonus issue of shares. The record date for the bonus issue of shares is July 1, 2022. The final dividend of Rs 3.6 is in addition to the Rs 9 per share dividend declared earlier. Now, that totals Rs 12.6 and at the current market price of Rs 110, the dividend yield works to 11.54%. Having said that the company has to maintain that dividend for the yield to remain high. The next few quarters are likely to be challenging given that crude has remained at elevated levels. However, we believe with the cut in excise, there is a possibility that the company could hike retail prices of petrol and diesel.

Indian Oil: Buy say most research firms

Broking firm, Motilal Oswal has a buy call on the stock with a price target of Rs 164. Prabhudas Lilladher has a hold on the stock and not a buy call.
"We downgrade to ''HOLD from 'BUY' given high crude price volatility with price target of Rs 131 (Rs 150 earlier). Any sharp correction in crude prices is an upside risk to our estimates." Still the target price is way above the current market price of Rs 110. If a hike in interest rates leads to recessionary type conditions globally, crude oil prices are likely to fall, which should augur well for Indian Oil. Also, someday the Russian-Ukraine war is likely to end, which could see a sharp fall in crude prices. Companies like India Oil, may then be big beneficiaries.