It fell like the proverbial house of cards.
The 30-stock benchmark of the Indian stock exchange, the Sensex, recorded its biggest crash on January 21. The index closed the day at 17,605 points, down a precipitous 1,400 points.
While the event is likely to send shudders down the spines of investors across all age groups for the young brave hearts amongst you we have got ten stock picks that can make you millionaires.
The caveat, however, is that you need to hold them for a long period: ten years if you can to reap the benefits of picking stocks that will create value for you.
We asked brokerage house K R Choksey Shares and Securities to hone in on ten stocks that will create value for investors in the long run. Gaurang Shah, vice president, equity research at K R Choksey Shares and Securities came up with these ten gems for long term investors just a few days before January 21. Over to him.
Here are our top picks which have the potential to be multibaggers ( a stock that grows manifold over a period of time) if held with an investment horizon of ten years: Large caps are selected because of their proven track record and ability to grab mega opportunities through their financial strength. Mid caps if the management has the vision and management band width to scale up rapidly to become large caps.
They are grouped under the following themes:
Commodities:
~ Reliance Industries (Perennially evergreen company)
~ Reliance Petroleum (Largest refinery with very high Nelson complexity index that will lead to highest gross refining margins, GRMs)
~ Gujarat NRE Coke (integration from coking coal to coke)
~ Tata Steel (formerly Tisco; lowest cost producer of steel plus large value addition through Corus acquisition)
~ Hindalco (lowest cost producer of aluminium plus large value addition through Novelis Fusion Technology)
~ Sterlite Industries (commodity powerhouse at a time when globally commodities are in a super cycle)
~ Sesa Goa (largest reserves of iron ore in private sector)
I am including many stocks in this sector since global commodities will be on the upswing for the next 5 years.
Telecom
~ RCom (marketing aggressiveness plus financial engineering plus political acumen)
Auto
~ Tata Motors (from world's cheapest car to luxury Jaguar to SUV Landrover to trucks -- will be in global top five in 5 years)
Finance
~ ICICI Bank (proactive, aggressive fund raising and lending taking full advantage of slow decision making at PSU banks)
~ Reliance Capital (straddling all areas of non-banking financial services)
Infrastructure
~ L&T (another evergreen company -- value unlocking through listing of subsidiaries, very strong core business)
~ Patel Engineering (strong position in high margin high technology construction sector, real estate development)
Pharma
~ Glenmark (innovator, outlicensor of drugs in fast growing therapeutic areas like lifestyle diseases)
~ Cipla (innovator copier -- low cost supplier of essential medicines people can't do without)
Realty
~ DLF (proxy for the Indian real estate sector)
~ Unitech (number 2 and tries harder than number 1)
~ Sobha Developers (fully integrated real estate contractor who graduated to property developer status)
K R Choksey disclaimer:
All reasonable care has been taken to ensure that the information contained herein is not misleading or untrue at the time of publication. However, we make no long standing commitment as to its accuracy or completeness. All information is for the private use of the person to whom it is provided without any liability whatsoever on the part of K R Choksey Shares & Securities Pvt Ltd. or any associated company or any member of employee thereof.
The company K R Choksey Shares & Securities Pvt Ltd may have open and investment interest in the stocks mentioned herein. Nothing contained herein should be construed as an offer to buy or sell or a solicitation of an offer to buy or sell. The value of any investment may fall as well as rise. Investors are advised to avail personal counseling from our research or dealing desk if they wish for any further clarity or clarifications in the understanding on various aspects of investment.