Indian market witnessed a sell-off in the last two trading sessions of the week which pushed Nifty below psychological level of 11,000 on weak global cues.
During the week, the Reliance Anil Dhirubhai Ambani Group stocks saw their worst decline as most of the stocks hit their lifetime low during the week post Reliance Communications issue.
During the week, the Reserve Bank of India (RBI) reduced interest rate by 25 basis points to 6.25 percent but with this surprise news, the market has shown profit booking from higher levels.
In January 2019, equity inflows declined 6.8 percent over the previous month to Rs 6,158 crore and its third straight monthly decline which is not good sign.
Nifty managed by some stocks but broader markets are in bear grip and most of stocks are available 40-60 percent lower from their recent peak. In this scenario, capital protection is the best strategy for investors. Try to invest only in quality stocks. Do not try to bottom fishing in bad stocks.
For next week, Nifty has strong support at 10,885-10,815 levels and resistance at 11,040-11,120 levels.
Here is the list of three stocks to buy in staggered manner for medium to long term:
Bajaj Auto is the world’s 3rd largest manufacturer of motorcycles and the largest manufacturer of three-wheelers.
First ten months of FY19 became golden period for company. During this period its motorcycles sales grew by 28 percent and commercial vehicles sales grew by 26 percent. Total sales grew by 28 percent. Its motorcycle sales grew by 21 percent during January 2019.
Due to higher raw material price, we have seen some pressure on margin front during nine-month of FY19 but we are expecting margin improvement in coming quarters. During Q3FY19, its sales grew by 16 percent YoY, while PAT increased by 15.7 percent to Rs 1,101.88 crore.
During nine-month of FY19, its sales grew by 21.11 percent YoY, while PAT increased by 15.63 percent to Rs 3,519.12 crore. At the CMP, the stock trades at a P/E of 17.5x. We are recommending a buy in staggered manner for medium to long term.
Siemens focuses on the areas of electrification, automation and digitalization. The company has posted strong numbers for Q3FY18. Its net profit increased by 19.69 percent to Rs 228 crore from Rs 190.5 crore on 15.7 percent higher sales of Rs 2,734.2 crore.
New orders grew by 4.1 percent to Rs 3,391 crore, compared to Rs 3,257 crore in the quarter ended December 2018. Siemens trades at PE ratio of 39.4x. We are recommending a buy in staggered manner for medium to long term.
AstraZeneca Pharma India Limited a subsidiary of AstraZeneca PLC, is a bio-pharmaceutical company, manufactures, distributes, and markets pharmaceutical products. It has reported excellent results for Q3FY19.
Sales and PBDIT grew by 67.42 percent YoY and 476.9 percent YoY, respectively, while it has reported PAT of Rs 29.09 crore against loss of Rs 10.35 crore. During nine-month of FY19, its PAT grew 95.43 percent to Rs 44.62 crore on 27.71 percent higher sales of Rs 537.99 crore.
Technically stock has formed inverted head and shoulder pattern break out on daily chart which is bullish in its nature. We are recommending a buy in staggered manner for medium to long term.
The author is Strategic Consultant at Equity99.
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