- Rain Industries
This one of those stock which was very dear to everyone in 2017. Rain Industries is one of the multi-baggers of 2017, which has appreciated almost 700% in just one year. Today Rain industries are available at PE of 7.55 whereas industry PE is 36.4.
Rain’s industries products mainly include calcined petroleum coke, which is obtained by calcining pet coke, a by-product of crude refineries. Rising output may send CPC prices in a downward spiral. CPC is primarily used in aluminium smelters and the prospects of the Aluminium industry impact CPC demand.
Rain has been diversifying into coal tar products, aromatic chemicals and packaging to offset the risk of dependency on the Aluminium industry.
2. TAMO (Tata Motors)
Tata Motors Ltd is an automobile company that manufactures motor vehicles and operates in 160+ countries across the world. It is engaged mainly in the business of automobile products comprising all types of commercial and passenger vehicles including financing of the vehicles sold.
Until recently, Most analysts view Tata Motors more as a JLR Motors and don’t give much importance to domestic operations, which account for 21.6% of total sales of the company. Hence, the perspective is always from the point of JLR.
In late 2018, Tata Motors will be launching various cars which will boost its domestic market share. In May 2018, Tata Motors passenger vehicle sales grew by 61%.
Therefore Tata Motors could be a good bet for the long term.
3. DBL (Dilip Buildcon Limited)
Dilip Buildcon Limited (DBL) is a 30-year-old company and is one of the largest road EPC contractors in India, with a sustainable business model focusing on end-to-end execution, with projects executed across 16 states and securing higher revenue share of government projects. By completing the projects ahead of schedule, DBL has received early completion bonus in 90% of its executed projects. This has reflected in its financials in the form of high EBITDA margin and RoCE among peers.
Since AUG 2016, DBL has given 300% return to its investors.
4. BEPL (Bhansali Engineering)
This company has created enormous wealth for its investors as its stock rose to 900% in 2017 only.
The company is engaged in producing a Monopolistic product which is called Acrylonitrile Butadiene Styrene or in short, ABS. There are only 2 companies which produce this product in India. Other than Bhansali, INEOS Styrolution India Ltd. is the other company producing this polymer. ABS prices appreciated in Q2 due to higher crude oil prices, higher prices for raw materials – Acrylonitrile & Styrene and demand from end users. In the last one year, product prices have risen by about 40 %. One of the major factors for this rise has been due to the high ABS demand for automotive companies from China.
The company has made strategic plans to increase its current production capacity by 4 times – the first phase – doubling capacity from current 80,000 MT to 137,000 MT and – the second phase – setting up a greenfield project with 2 lakh MT capacity by 2022.
At current levels, the company looks very lucrative to invest for a horizon for 2+ years.