Daljeet Kohli of India-Nivesh Securities is well known for his multibagger stock pick Alembic Pharma. His other stock picks Bajaj Finance and J. B. Chemicals are also doing well. J. B. Chemicals has already given a return of 32% since it was recommended and looks set to give solid returns.
I missed Alembic Pharma though I have a nice little chunk of Bajaj Finance & J. B. Chemicals in my portfolio.
Daljeet Kohli, in his latest interview to CNBC TV-18, has recommended the following stocks for 2014:
Cadila Healthcare:
Daljeet explained that Cadila has been de-rated in the last two years owing to a slump in its margins from 21% to almost 16.5%. The slump in margins was cuased due to the domestic pricing policy and US FDA problems with the Moraiya facility. However, things have stabilized at present and Cadila is expected to report better margins. The Moriya facility is out of the US FDA problem and. It has also received 80 ANDA approvals from the US FDA.
Daljeet also pointed out that Cadila’s P/E was only 16 times FY 15 EPS. This was cheap compared to its traditional P/E of 18-20 times. Daljeet expressed confidence that when the market realizes that Cadila is stabilizing, its valuations would spurt. His price target is Rs. 913 which gives a solid return of 15% from the CMP of Rs. 793.
LIC Housing Finance:
Daljeet Kohli pointed out that the problem with LIC Housing Finance is that it has to borrow funds from the market and that has impacted its margins. However, given LIC Housing’s pedigree and market dominance, when the interest rates stabilize, LIC Housing can be expected to spurt. Another trigger is the banking license for which LIC Housing is a strong contender, Daljeet said.
Daljeet emphasized that LIC Housing Finance was available at very cheap valuations of 1.1-1.2 times adjusted book value. So, the risk-reward ratio is in favour of making an investment, he emphasized.
Coromandel:
Coromandel came into Daljeet’s radar because the import parity price is now in its favour because of rupee depreciation. So, domestic users prefer to buy fertilizers from Coromandel rather than to import. It is also a beneficiary of the good monsoon, he added.
United Phosphorus, Oil India and Aditya Birla Nuvo:
United Phosphorous is Daljeet’s fourth stock pick. The stock has already given solid returns this year and has the potential to go up thanks to its diversified business and availability in 40 countries across the world.
Oil India was a recommended as a stock pick because the gas price is expected to go up. Around 10% of Oil India’s revenue comes from gas. Also, Oil India offers a good dividend yield which protects the downside.
AB Nuvo is a diversified play on all consumption themes such as financials, retail and telecom. All three sectors are seeing an upside and are benefiting. AB Nuvo has potential for value unlocking if the management gets its act in order, Daljeet said.
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