The market staged a spectacular show in 2017 as benchmark indices rose over 25 percent each. The Nifty50 rallied by about 26 percent so far in the year but much of the action was seen in broader markets.
The Midcap index, which surged more than 40 percent so far in 2017, got support from domestic investors which have emerged as big buyers in equity markets via mutual funds (MFs).
Here is a list of top 10 (largecap and midcap) picks from various experts which one can look for the year 2018:-
Bajaj Auto
The company is back on the growth path, driven by (a) regulatory changes in the key domestic passenger 3W-states providing strong medium-term growth visibility, (b) filling up of product gaps in domestic motorcycle portfolio helping to regain lost market share, (c) stability in key export markets and ramp-up in new markets driving export sales.
It is well placed to ride on premiumisation trend. Husqvarna and KTM present an opportunity to drive contract manufacturing volumes by 3x over the next few years. Mehta expects total volumes to grow at a CAGR of 10 percent over FY17-20.
Aurobindo Pharma
The pharma major exports to over 125 countries across the globe with more than 70 percent of its revenues derived out of international operations and among the largest filers of DMFs and ANDAs from India.
It is poised to outperform its peers in the current circumstances because of strong US pipeline, diversified product mix (top-25 products accounts for 35 percent of sales) and no pending regulatory issues.
Birla Corporation
The company is primarily engaged in the manufacturing of cement as its core business activity. It has a significant presence in the jute goods industry as well.
It has consolidated operations with a capacity of 15.5mt which is among the largest in the Satna cluster, with 22 percent of market share. It recently acquired subsidy Reliance cement which is operating at 74 percent in 1HFY18 due to sand mining ban in U.P. Eastern operations witnessed good demand coupled with a higher share of premium products.
Britannia Industries
The company has delivered consistent healthy performance in a difficult operating environment. It is rapidly expanding its distribution network and is continuing with its investment in R&D and significant expansion of its own manufacturing indicate management’s optimism about the growth prospects. Guwahati factory will be operational in six months.
Sadbhav Engineering
The company sees robust business opportunity coming up in the road sector post the Bharatmala project announcement. It expects annual awarding from the NHAI to be Rs800 billion in FY18 versus Rs600 billion in the previous year.
The company has maintained its standalone revenue guidance of Rs 3,800/Rs 4,500 crore for FY18/FY19 and expects the operating margin to be in the range of 11-12 percent and traffic growth to be 10 percent in 2HFY18
Kajaria Ceramics
The robust outlook of tiles industry (led by lower per capita consumption and expected to pick up in real estate sector) augur well for Kajaria Ceramic.
The market leadership in tiles and entry in bathware products would drive future growth. Going forward, revenue and PAT are likely to increase at CAGR of around 10.3 percent and 17.3 percent, respectively over FY17-20.
Nilkamal
The Net revenue and PAT are likely to grow at a healthy pace, led by demand revival and company's efforts towards brand building.
Despite higher oil prices, margins could improve at a gradual pace, led by operating leverage. Market leadership, leverage free balance sheet, and healthy cash flows would provide valuation comfort.
Bharat Electronics
BEL is likely to benefit from government’s increased emphasis on ‘Make in India’ and higher defence capex.
Strong order book (more than Rs 40,000 crore) and healthy order inflow (Rs 13,000 crore) outlook provide greater revenue visibility. Increased investment in R&D will help BEL retain its leadership position in the defence segment.
Mold-Tek Packaging
Mold-Tek Packaging will benefit from a revival in paint and lubricant industries, being a market leader in the rigid packaging industry.
Food and FMCG segment will drive growth in the coming years. The company is setting up two new plants for Asian Paints, which will meet their pail demand.
Srikalahasthi Pipes
Demand revival and higher capacity utilization will improve its volume offtake and profitability. The company will benefit from government’s thrust on water supply and sanitation infrastructure.
Revenue and PAT are likely to increase at CAGR of around 18.4 percent and 17.5 percent, respectively over FY17-20.
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