Markets At A Glance

Markets At A Glance

  • Reading time:2 mins read

By Nishtha Garg

The stocks listed below show the potential to tide through storms and emerge victorious on the other side of the pandemic. With a runway of opportunities ahead, these 10 names – if bought in a basket approach and kept for the long term – can make healthy returns for an investor.

1. Larsen & Toubro

L&T is a big beneficiary of the various infrastructure proposals announced in the recent Budget and the company has not only had a great execution history but has also exhibited financial strength and created value over the years. The company has delivered ROEs of 14% consistently over the last 10 years with operating margins of over 15% over this period. Yet, it continues to trade at attractive valuations with a PE under 15x, making it an attractive value-buy.

2. Dr Reddy’s

Now, with the rise in Covid-19 cases and need for medical support, demand for drugs has skyrocketed and boosted sales of players like Dr Reddy’s who has been a consistent performer by delivering stable net profit growth at 14% CAGR over the last 10 years. Pharma stocks have been underperformers since the past few years and the with a number of tailwinds on their side currently, things seem to be rosy especially for this stock.

3. Dr Lal Pathlabs

Dr Lal Pathlabs too has been witnessing a rise in testing diagnostic volumes around COVID-19. But had it not been for Covid, it would have still performed well given that it’s been a consistent cashflow generator and has delivered ROCEs in excess of 30%.

4. Vinati Organics

In line with rising pharma, the growth in specialty chemical stocks is recently trending. With China being at a disadvantage, exports from India have ramped up and Vinati Organics is a strong contender as a leading producer of IBB. It has delivered ROCEs of over 35% over the last 10 years and has growing profits at 24% CAGR.

5. Pidilite Ltd

Pidilite Ltd too has been another promising player in the chemicals space. The company has a near-monopoly in both industrial and consumer adhesives as well as associated solutions. It has leveraged its position well enough to consistently deliver excellent shareholder returns and can be a good buy for your portfolio.