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5 Fundamentally strong stocks for the next 5 years.

As on 24 Sept 2019





1) Exide Industries Ltd. (197 Rs.)  — There are two companies in India which covered almost 60% market share in Batteries, Exide and Amara Raja. Soon electric vehicles are the future of automobiles industries and these two companies are likely to get maximum orders. Exide is the largest manufacturer of automotive and industrial lead-acid batteries in India and fourth-largest in the world. Trading is trading 19x FY20 earnings and with 10% eps growth and Industry PE 18, The stock will be valued at 252 Rs. which is a 27% upside from the current market price of 197 Rs. 2) Balkrishna Industries Ltd.  (786 Rs)— Automobile slowdown directly impacted the tyre sales but when the slowdown will end, investors will rush to buy tyre stock which is fundamentally strongest. Balkrishna Ind has maintained Compounded Sales Growth of 15.71% and Compounded Profit Growth of 26.67% from last 10 years. With merely 829.60 Cr debt, this company has one of the finest balance sheets as compared to its competitors like Apollo tyres, JK tyres, CEAT, Goodyear etc. Company has been maintaining a healthy dividend payout of 17.17%. 3) Larsen & Toubro Ltd (1481 Rs.): L&T needs no introduction, The company has business interests in basic and heavy engineering, construction, realty, manufacturing of capital goods, information technology, and financial services. As of March 31, 2018, L&T Group comprises 93 subsidiaries, 8 associates, 34 joint-venture and 33 joint operations companies. Company has been maintaining a healthy dividend payout of 26.80%, maintained Compounded Sales Growth of 13.33% and Compounded Profit Growth of 11.34% from the last 10 years. 4) Ashok Leyland (75 Rs.): Founded in 1948, it is the second-largest commercial vehicle manufacturer in India, fourth largest manufacturer of buses in the world and 10th largest manufacturer of trucks globally. In India, you will see maximum HCVs and LCVs of either Ashok Ley or Tata Marcopolo. With a debt of only 632.36 Cr. Company is virtually debt-free, providing a good dividend yield of 4.15%, good consistent profit growth of 43.55% over 5 years and Company has a good return on equity (ROE) track record: 3 Years ROE 25.45%. Ashok ley has been maintaining a healthy dividend payout of 41.20%, even in the slowdown. It has maintained Compounded Sales Growth of 17% and Compounded Profit Growth of whopping 27.24% from the last 10 years, which is the rear number for any automobile company. 5) HDFC Bank Ltd (1257 Rs.): RBI included HDFC Bank in ‘too big to fail’ list in 2017. It has a base of 1,04,154 permanent employees as of 30 June 2019. HDFC Bank is India’s largest private sector lender by assets. It is the largest bank in India by market capitalisation as of February 2016. Company has been maintaining a healthy dividend payout of 19.35%. HDFC bank has maintained a Compounded Profit Growth of 25% and Compounded Sales Growth of 20% from the last 10 years.

Thanks! Akshay Seth Research Analyst (SEBI Regd.) akshay.equity@gmail.com Linkedin: connect here

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