By Kishor Ostwal
I have classified markets into three parts The Ocean, The River and The Ponds.
The Ocean: This segment likely refers to the most prominent and widely covered stocks, where market information is abundant, and many well-known brokers analyze and provide insights. Stocks like TATA MOTORS, TATA POWER, and BHEL are considered noteworthy picks from this category, suggesting that they are already well-established and have the potential to make significant waves in the market.
The River: This segment appears to encompass stocks that are somewhat less mainstream or covered by smaller brokers. The text hints that these stocks may offer unique opportunities that could flow like a river – steadily and with potential for growth.
The Ponds: The Ponds category could represent even smaller or niche stocks that are not widely known or covered by brokers. These stocks might have more limited liquidity and market exposure but may still hold potential, similar to how a pond might have hidden treasures.
By focusing on The River and The Ponds for DIWALI picks, I am suggesting a willingness to explore less conventional and potentially undiscovered investment opportunities, which can be exciting for investors seeking high-growth prospects in lesser-known areas of the market. This strategy may involve higher risk but can also yield substantial rewards if the chosen stocks perform well.
My Top DIWALI Stock Picks:
- Investment Precision Castings Ltd
Investment Precision Ltd currently trades at Rs 600 per share, with a market capitalization of Rs 293 crores and revenue of around Rs 200 crores. This specialized company focuses on manufacturing Titanium castings, particularly for the defense and aerospace sectors. With recent orders from TEJAS and the potential for further expansion, it presents an intriguing investment opportunity.
- Sukhjit Starch Ltd
Sukhjit Starch Ltd is a cash-rich company that has announced a 25% capacity expansion. It boasts a revenue of approximately Rs 1200 crores with a market capitalization of just Rs 640 crores. What captures investors’ attention, apart from the capacity expansion, is the company’s commitment to green energy production from maize starch. Considering the growing importance of hydrogen in the green energy sector, this stock offers significant upside potential. With a low P/E ratio of just 10, it presents an attractive investment opportunity.
- Apollo Sindoori Hotel
Apollo Sindoori Hotel is a part of the Apollo Hospital Group, trading with a relatively low market capitalization of Rs 450 crores. The company generates revenue of Rs 280 crores and operates on a scalable model. Its revenue primarily comes from providing hotel services within Apollo Hospitals. As Apollo Hospitals expand their facilities and consider acquisitions, this could directly boost the company’s revenue. Additionally, they manage a restaurant in Ayodhya and plan to establish a chain of hotels, including in Ayodhya, which could be a positive catalyst as the Ram Mandir is expected to open to the public in the next few months. Notably, with an equity of just Rs 1.3 crores, which is unusual for NSE-listed companies, there may be potential for equity expansion over time, considering the company’s substantial book value of Rs 267 per share.
- Anmol India Ltd
This situation reminds me of Coal India, where coal is often referred to as “black gold.” While coal production in India has been on the rise, there is a significant shortage of coal due to increasing demand from power companies. As a result, there is a pressing need to import coal from overseas.
This company has honed its expertise over the years and established an extensive infrastructure for coal imports. As a result, its revenues have shown significant improvement in the last few quarters. With an annualized revenue of over Rs 1,900 crores, an IBITDA of Rs 64 crores, and cash reserves exceeding Rs 175 crores, this company deserves the attention of investors. It’s noteworthy that without factoring in the cash reserves, the company is valued at just Rs 125 crores, a unique characteristic that can only be found in the Indian market.
( Kishor Ostwal is an analyst and CMD at CNI Research Ltd. Views expressed are the author’s own. Please consult your financial advisor before investing.)