IT companies are expected to have strong revenue growth in its 4th quarter.
The RBI on 4 April lowered the benchmark interest rate by 0.25 %, the 2nd cut in a row, to the lowest level in a year. The central bank, however, kept monetary policy stance 'neutral' due to uncertainty over monsoon.
Oil prices registered their strongest quarter in almost a decade as the OPEC restrains supplies. The latest flash-points in the Middle East and Venezuela are giving the rally renewed impetus.
The prospect of a resolution to the US-China trade war and slivers of optimism over the global economy have also buoyed the demand outlook in recent days. Also, gold prices weakened on expectations of +tive outcomes of the China-US trade deal.
In the coming days, we will be looking at results of India’s major IT companies namely Infosys, TCS, Wipro, and Tech Mahindra. These companies are expected to post strong revenue growth in the seasonally-weak fourth quarter on the back of large deal wins, but margins could come under pressure as the cost of expanding headcount in the US begins to bite.
Here are the top stock trading ideas that can give good returns:
L&T Infotech is a global technology consulting and digital solutions company having its operations in 27 countries. In FY19, it will complete two years of significant market-share gains, reflecting its competitiveness in the marketplace. Operations in North America (67 % of revenue) are growing fast along with Europe at 17 % and 10 %, respectively.
The stock now quotes at 16x FY21e PE (11x EV/EBITDA), which we consider attractive given the growth profile. Our fair price is based on 20x FY21e PE (15x EV/EBITDA).
ICICI Lombard General Insurance Company is the 4th largest non-life insurance company and the largest private player in the industry.
With focus on SME insurance market and cross-selling opportunities, it looks to drive growth on the back of several initiatives - expanding distribution network, enhancing product offering and bolstering technology to improve overall operational efficiency and customer service.
The company issued 23.5 million policies in FY18 and its gross direct premium income (GDPI) increased 15.2 % year over year to Rs 123.57 billion.
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Given its impressive underwriting performance, diversified product mix, and favorable macro traits, we believe the company is well positioned for long term growth and initiate our coverage on ICICI Lombard General Insurance Company Ltd, with a BUY rating and a target price of Rs 1,210 per share.
Maruti Suzuki's strong product portfolio and distribution network make it best placed to capture pent-up demand in the passenger vehicle segment.
It has come a long way to become the most trusted brand name in the Indian passenger vehicle industry, commanding about 50 percent market share.
Further, Maruti's wide range of product portfolio coupled with volume growth should help in sustaining the leading position in the market. At CMP the stock is trading at 28.1x times FY19E and 23.3x FY-20E consolidated earnings.
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