Top 15 Stocks to focus ahead of Budget 2017-18

In recent global stock market turmoil Indian Market recovered well and a sharp rally was noticed in Sensex and Nifty ahead of Budget 2017 . For value investors it is high time to go with market sentiments to find some opportunities in selected stocks ahead of union budget 2017-18. Again the starting of the new financial year is as good of a time as any investor to reconfigure a solid portfolio with proper tax planning. We Indian always have lots of expectation from Union Budget, hope this Budget 2017-2018 will bring plenty of opportunities in selected sectors and stocks. It’s right time to prune our portfolio of the dead weight and plant the seeds in form of stocks that will flourish in the coming budget. In current post we will discuss "Top 15 Stocks to focus ahead of Budget 2017". Also read Invest in these sectors for excellent return.

                    Budget Stocks  2017

Renewable Energy Sector

1. Suzlon Energy 

2. SJVN

The government is committed to raise the renewable energy target to 175GW till 2022, there is hue and cry on entire renewable energy sector, Government also increased  effective rate of clean energy cess which will increase collection of the National Clean Energy Fund; these funds could be injected in renewable energy projects. Therefore one may see a huge opportunity emerging within renewable energy sector. So, 'Suzlon' and 'SJVN' would be key beneficiaries in this space ahead of Union Budget 2017-18.

Infrastructure Sector

3. Larsen & Toubro: L&T
4. HCC
5. IRB Infrastructure Developers Ltd: IRB Infra 

 As the government is keen to step up investment despite a challenging fiscal situation; Infrastructure sector will see greater attention in Union Budget 2017-18. L&T, HCC and IRB Infra will be the stocks to focus ahead of Budget under Infrastructure sector.

Defense and railway Sector

6. BEML 

Bharat Earth Movers Limited is also known as BEML, it is an Indian Public Sector Undertaking. Its headquarters is in Bengaluru. BEML manufactures a variety of heavy equipment, such as that used for earth moving,transport and mining. It has a regular order inflows from defense and railways. Though BEML is an over valued share, it has strong earning possibilities. Hope this budget will bring some cheers for shareholders of BEML.

7. BEL

Bharat Electronics Limited (BEL), conferred with the Navratna status by the Government of India, was established in 1954 to meet the specialised electronic needs of the Indian defense services. It has now developed into a multi-product, multi-technology, multi-unit Psu servicing the wants of customers in India as well as in abroad. This is the strongest candidate for getting new defense order inflows if anything is approved in this budget. Bharat Electronics Limited (BEL) is a kind of share every shareholder must have it in his portfolio.

8. Bharat Forge
9. Ashok Leyland

Irrigation and Agriculture

10. Jain Irrigation Systems

Indian agriculture dependents heavily on monsoon. The two consecutive years witnessed drought in India hopefully there would be more attention on 'Irrigation and Agriculture' in Budget 2016-17. Again there have been demands of Micro-irrigation and 'Drip Irrigation'. Modi government is looking at various options to step up irrigation in India; reviving irrigation, agriculture and farm sector seems to be top priority in this budget. There is strong possibility of declaring irrigation as 'Infrastructure Sector'. So for investors looking to grab this opportunity may invest in 'Jain Irrigation Systems'.

Logistics Sector

11. Gati

12. Gateway Distriparks Ltd: 

Gateway Distriparks Limited is a company based in Mumbai, India, is a logistics facilitator with 3 verticals: Container Freight Stations, Inland Container Depots with rail movement and Cold Chain Storage & Logistics.

Sanitaryware Sector (Swachh Bharat Abhiyan)

13. Cera Sanitaryware

14. HSIL

15. Sintex Industries Ltd

The government has proposed granting tax benefits to corporate for their contributions to Swachh Bharat Kosh and to impose Swachh Bharat cess up to 2% on certain taxable services which would help the government accelerate Swachh Bharat Abhiyan and some of the shares associated directly with this initiative will be benefited 

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Ashok Leyland’s CFO View on Scrappage Policy

Scrappage policy will not only benefit industry but will rev up economy, says Ashok Leyland’s CFO

24 Feb 2016 02:14 PM

Gopal Mahadevan, CFO of Ashok Leyland, discussed the company’s expectations from the Budget as well as their performance, during an interview with the CNBC-TV18.
 
Scrappage policy to directly benefit industry
As the market is abuzz that the government might announce a scrap-page policy for older vehicles, Mahadevan said that the move will benefit the segment by inducing replacement demand. He pointed to the positives associated with such decision as better vehicles will come on the road that will align with the pollution norms.
 
At the same time, Mahadevan noted that the policy will not only help boost industry but also the economy as it will propel investments. Based on the current total annual volumes, which stands at 260,000-270,000 units, Mahadevan predicts a 10% to 15% surge in demand if the policy is imposed in a phased manner.
 
Growth at comfortable pace
Mahadevan did not specify the numbers or percentage by which demand for Ashok Leyland will rise, but said that given the company’s record of outperforming industry growth, such a policy will have a positive effect on its sales. It is to be noted that in the recent quarter, Ashok Leyland posted 38% in volume growth versus 22% industry growth.
 
Mahadevan prefers to adopt a wait and watch policy to get clarity on how the government will implement such scrappage policy. He believes that such a policy can be undertaken in phased manner, and there would not be any overnight implementation.
 
While giving a brief about the company’s performance in bus segment, Mahadevan said they have been able to perform well in the segment. He added that the 54% volume growth during the last nine months came from both trucks and buses equally. As far as AMRUT (Atal Mission for Rejuvenation and Urban Transformation) scheme is concerned, Mahadevan holds the view that that the company will be capable of boosting bus segment even if the scheme delays. He said that the company holds tenders for most of the significant schemes or private tenders, which will help it to offset the demand loss in case AMRUT scheme gets pushed further.
 
In the end, Mahadevan declined to comment on termination notice from Nissan, stating that the matter is sub-judice. 

[Update] Is Ashok Leyland a Buy at Current Price?

Can Ashok Leyland find support around current levels?

CMP Rs. 83.10 as on 18/01/2016

Trading Rule: Bullish stock has a tendency to hold long term moving average like 200 DMA

Popular Search Key Terms: Ashok Leyland Stock Target /Share prices, Ashok Leyland Live BSE/NSE, F&O Quote of Ashok Leyland with Historic price charts for NSE / BSE | Get Ashok Leyland Ltd. live share price, historical charts, volume, market capitalisation, market performance, reports and other company details Ashok Leyland future and option price, technical chart, news & announcements.

Ashok Leyland is at 200 dma

Photos courtesy: StockCharts.com

Is Ashok Leyland a Bullish stock?

Yes, Ashok Leyland made a large candle Bullish move earlier in Aug and Dec 2015. A large candle Bullish move has capacity to change the trajectory of the stock.

Has Ashok Leyland respected 200 dma post Bullish move?

Yes. Last time when Ashok Leyland was at 200 dma – the stock managed a strong bullish bounce from 83 to 99 in less than 12-15 trading sessions. The stock is now back to 200 DMA and technically, it should hold; if market turmoil does not affect it.

What If Ashok Leyland breaks 200 DMA?

There is also a possibility that stock can break 200 dma on closing basis and in the case the above rule will be considered failure. One must remember in market, we are dealing with probabilities and not certainties. Ashok Leyland on breakdown below 200 Daily Moving Average can become trendless to neutral. It then can slip to 81 and even to 78….where it has the most solid support.

[Update]
CMP Rs. 83.20 as on 12/02/2016 

Amid market turmoil Ashok Leyland is again at it's 200DMA

As I have originally posted this article on 18/01/2016, it has been passed almost one month amid lots of devastation in stock market  due to global turmoil. Here we will see how Ashok Leyland respected it's 200 moving average and reacted as per our expectation.

As per our analysis it respected it's 200 DMA at 82.50 and touched intraday high of rs 92.40 on 01/02/2016; almost 12% upside from its 200 DMA within 10-12 trading sessions. It has sustained at that level for few trading sessions but due to global market turmoil it has again fallen down to 81.10 (on 11/02/2016) and quickly bounced backed to 83.20 today on 12/02/2016. This time its 200 DMA is Rs. 83.83 so to the greater extend it has again respected its 200 DMA. 

So I see a reversal trend in Ashok Leyland which may lead it to 92...95...97 again in few trading session, if it sustains at current level amid global sell off. As per above calculation one may make position with a stop loss at 81.

Disclosure: This post on "Can Ashok Leyland find support around current levels?" is purely for Educaitonal Purpose . Please do your own due diligence before trading or investment. Do not treat the above as any recommendation.

See what experts says on Ashok Leyland buying strategies;

Feb 12, 2016
• Buy Ashok Leyland: Simi Bhaumik
Feb 11, 2016
• Ashok Leyland Q3 net jumps over 6-fold to Rs 198.62 cr
Nov 09, 2015
• Buy Ashok Leyland; target of Rs 105:Sharekhan

Popular Search Key Terms: Ashok Leyland Stock Target /Share prices, Ashok Leyland Live BSE/NSE, F&O Quote of Ashok Leyland with Historic price charts for NSE / BSE | Get Ashok Leyland Ltd. live share price, historical charts, volume, market capitalisation, market performance, reports and other company details Ashok Leyland future and option price, technical chart, news & announcements.

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Ashok Leyland: Strong Q3 result Seen 22% Increase yoy

Ashok Leyland: Q3 result Seen 22% increase yoy

For the December quarter, the AL’s volumes are expected to see a 22 per cent increase year-on-year driven by enhanced demand for trucks and MCVs (medium commercial vehicles), while volumes in Q3 are expected to top 27 % on higher economic activity and improvement in business sentiment.

As per one of the Stock Analysts at Motilal Oswal Securities, there is another positive in the quarter has been some reduction in discounts which will help realisations of Ashok Leyland improve 4.7% yoy. A Tremendous incerease in volumes and an increase in realisations will help " Ashok Leyland" revenues for the quarter move up 28% to Rs4,295 Cr. On the other hand fall in commodity price is expected to improve its profitability to a greater extend, raw material to sales for the Q3 are expected to fall 400 bps to 70.5% year-on-year which will help improving its operating profit margins by around 300 bps to 10.6%. Strong revenue and margin growth will assist Ashok Leyland’s operating profit to grow by 50% year-on-year in Q3.