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Union Budget: Roadmap for the Year

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budget expectations

Union Budget is the biggest single day event of the year for the market and Investors. This year it carries more significance as the world is looking towards India for growth. For, Stock Markets which have seen more pain since last budget, is hoping for gains post budget. For Further trigger to the markets budget is being eyed upon as a crucial event. Crude Oil has thrown up an opportunity to control or rein in the deficit for Indian Economy. For, the finance minister it would be a key exam, as he has to make this budget a growth oriented and not populist, keeping in mind the huge mandate the government is enjoying in the lower house. Further, India will be saving close to $70billion in oil import bill due to fall in crude oil prices which gives big comfort to FM while allocating funds in budget for various sectors.

We, feel the thrust areas of the upcoming budget would be into sectors like agriculture, education, dairy and green energy. Government can allocate decent funds to mobilize these sectors further. Further, some tax relief might be given to encourage Make in India.Industry which might benefit from such measures is likely footwear and textile industry.As, an investor we should do our homework in identifying companies in the sectors mentioned above, so that we can plan our investments accordingly. For the Markets, Result session that has gone by was not too encouraging, hence budget is the only immediate trigger available.

Current Market scenario is full of fear factor, which is largely impacting our process of decision making and allocation of funds towards stocks market as a whole. Time and again, we have been mentioning investors to avoid trading, especially leverage trading and Invest with a clear mind set of 2-3 years. Pursuant, to our strategy of highlighting stocks which are not heard frequently, we suggest below stock to be considered for your further research.

Jindal Poly films

Jindal poly films, is a key player in packaging industry and is consistently showing decent performance. We, feel going ahead also company would continue to post robust profits aided with sharp decline in the raw material prices. Operating Margins have shown significant growth over last few years.

Considering its last 3 years performance, we feel company should maintain same growth rate and post a EPs of Rs.90/- in F.Y 15-16, which makes stock available at close to a P.E. of 5.

Consolidated NP for F.y 14-15 was Rs.172/- crores. For F.Y 15-16, co. is expected to post a net profit of Close to Rs.330/- crores. These, numbers reflect company’s strong performance for the recent past, which is again expected to continue in F.Y16-17 as well.

Promoter’s holding stands at close to 75% in the company which shows promoter's confidence over the business. So, we suggest Investors to take this stock for their further research.

(Disclaimer:- The author might have recommended the same stocks to its clients and it is always advisable to consult your financial advisor before investing.)

Ritesh R Muthiyan
 Shriniwas M Jakhotia
(Equibulls Financial services)

 

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