From ICICI Bank to Bajaj Finance, 10 stocks to beat the market in 2019

The Street expects the investment cycle in India to take off led by rising capacity utilisation and lower rates which coupled with rural-led consumption could boost corporate profits

Indian equities were not a happy hunting ground for domestic investors in 2018 with most sectoral indices ending in the red while the benchmark indices delivered single-digit returns. Higher oil prices, a depreciating rupee, rising interest rates and a liquidity crisis for finance companies were some of the reasons. For 2019, there are uncertainties related to outcome of general elections, the direction of fund flows and global growth worries. The Street also expects the investment cycle in India to take off led by rising capacity utilisation and lower rates which coupled with rural-led consumption could boost corporate profits. While profit expectations were high, earnings growth over the last few years has been tepid with market returns largely led by a rerating of the price-earnings multiple. Given the earnings recovery and falling stock prices, valuations have corrected but are higher than long-term averages. While the near term will be marked by volatility amid global uncertainties, there are expectations of a better show in the second half of 2019. Amidst this, brokerages advise investors to focus on companies that offer growth at reasonable valuations. We shortlist 10 such picks with returns of at least 14 per cent in the New Year.

Target price and upside are for next 12 months; price-to-earnings (PE) and price-to-book value (P/BV)  are based on trailing 12 months ended September 2018 financials; EPS is earnings per share; Source: Brokerages. Data compiled by BS Research Bureau