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Sensex, Nifty turn weak, volatile: Top stocks that may deliver up to 75% returns in 12 months

BusinessToday.In     March 23, 2018

It's a black Friday for global markets today and India is not an exception. Global markets were roiled after US President Donald Trump imposed tariffs worth $60 billion on imports from China. Asian markets followed lower US closing with Dow Jones falling 724 points or 2.93% to 23,957 level. The Nasdaq too closed 178 points or 2.43% lower at 7,166 level.

In Asia, Hang Seng fell 975 points or 3.13%, Nikkei crashed 974 points or 4.51% and the Taiwan Sec Index was down 182 points or 1.66%.

India felt the jitters of the global market crash with the Sensex and Nifty falling up to 523 points and 150 points, respectively.  

The Sensex seems to be heading toward the 32,000 level with a weak closing seen today and March derivatives expiry likely to hit market sentiment next week.

With the market seen falling in near future, we look at stocks which are likely to give good returns within a period of one year.

South Indian Bank (SIB): Buy

Brokerage: Equinomics

Target price: Rs 40

SIB's net NPAs percentage have been steady in the last 3 quarters and in-fact came down by 22 basis points in Q3FY2018 compared to other PSUs and OPSBs who reported a significant jump in their NPAs (bad assets).  SIB stock trades at 1.1 times FY2018E Adjusted Book Value (ABV) of Rs 20.10 and 1 times FY2019E Adjusted Book Value of Rs 22/. This valuation is one of the cheapest (after Karnataka Bank, which still remains as the cheapest old private sector bank (OPSB) in terms of price to ABV). Hence, we continue to reiterate our BUY call on the stock with a target price of Rs.40. At the target price SIB will still trade at 2x FY2018E ABV, which is still very cheap as compared to other OPSBs.

Disclosure: Equinomics' G. Chokkalingam personally HOLDS shares of South Indian Bank. Hence, investors are advised to consider this fact before investing in this stock.

Blue Star: Accumulate

Brokerage: Angel Broking

Target price: 867

Upside: 14%

Favourable outlook for the AC industry to augur well for cooling products business which is out pacing the market growth. EMPPAC division's profitability to improve once operating environment turns around.

Dewan Housing Finance: Buy

Brokerage: Angel Broking

Target: 720

Upside: 39.1%

With a focus on the low and medium income (LMI) consumer segment, the company has increased its presence in tier-II & III cities where the growth opportunity is immense.

Century Plyboards: Buy

Brokerage: Angel Broking

Target price: 400

Upside: 24.2%

We expect Century Plyboards to report net Revenue/PAT CAGR of 17%/16% over FY2017-20E mainly due to healthy growth in plywood & lamination business, forayed into MDF & Particle boards on back of strong brand and distribution network.

Navkar Corporation: Buy

Brokerage: Angel Broking

Target price: 265

Upside: 74.9%

Massive capacity expansion along with rail advantage at ICD as well CFS augur well for the company.

KEI Industries: Buy 

Brokerage: Angel Broking

Target price: 436

Upside: 18.1%

High order book execution in EPC segment, rising B2C sales and higher exports to boost the revenues and profitability.

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