1. Bharat Electronics 2.Bharat Forge 3. Tree House

Abhijeet · Sep 12, 2015

Dear Friends,

I am looking to add following stocks in my portfolio with a long term investments plan, please advise if its is a right time to get invested in these stocks.

Also if you could suggest few more good picks to build the long term portfolio.

Thanks.

Meenakshi Razdan · Sep 12, 2015

All three are good stocks but I would urge you to write a paragraph or two on why each stock appeals to you. You don't have to be very elaborate if you don't want to but you can set out the basic facts as to what the company does, what it has achieved in the last five years and what you expect it to achieve in the next year or so. Also, some basic information about the market capitalisation, the extent of indebtedness, the core ratios etc. You will be surprised how collecting even such basic information can help to clarify your thoughts and give conviction on whether what you are seeking to buy is appropriate or not.

Abhijeet · Sep 13, 2015

1. BEL has multiple business lines and Majorly into defence equipment manufacturing and RnD, with the new initiative of "Make in India" i see Bharat Electronic winning many major projects for defense requirement which will help its revenue to see multi fold growth.The company derives close to 70 per cent of its turnover from Defense applications and the rest from civilian applications. Also i expect govt to have higher spends on defense requirement and BEL looks a better Indigenous source.
2.Bharat Forge is regularly posting strong growth in net sales and the future also looks bright.The 31% rise in stand-alone net sales to Rs.1,223.9 crore was the result of a strong 18% growth in tonnage shipped and a 13% rise in realization from the year-ago period.Bharat Forge attributes higher export growth to a rise in market share in the US along with new customer additions in both the US and Europe. US sales growth was the strongest at 68.3% while Asia-Pacific reported a contraction in sales. Also the stock is currently trading at quite low value as compared to what it was 6 month ago. with increase in USD value over rupee i see major turnaround in the overall result.
3.Tree House - I see organic growth in this as they have a major expansion plan for pre-schools in NORTH and South which will see overall growth for the company.

Meenakshi Razdan · Sep 13, 2015

I found a recent report on Bharat Electronics by Motilal Oswal which recommends a buy on the basis that there is expected to be "accelerated decision making toward large defense procurements and increased indigenization". The report does, however, also acknowledge that there is increased competition from private players for the defense contracts.

I think stocks like BEL and Bharat Forge are the ideal buy-n-forget sort of stocks. They will compound their earnings in a slow but steady manner.

One cannot expect dramatic out-performance from them. At the same time, one is not unduly worried about a risk to the capital.

As to the timing to invest, it is difficult if not impossible to time the market. The best course of action may be to slowly nibble on the stocks whenever there is a dip.

As to the other stocks worthy of investment, please take a look at the stocks recommended by Religare, India Nivesh, ICICI-Direct and IIFL. There is a detailed explanation given for each stock and it can help in your research process.

kharb · Sep 14, 2015

In addition to Bhart Forge,BEL,,,HDFC bank,Indusind bank,Kotak bank,Infosys,L&T,Lupin,Sun Pharma,Tata Motors,Maruti,Ultra tech Cement,LIC housing Finance,Deewan housing finance,Asian Paints,HUL,ITC,IDFC may be stocks for your core portfolio which can be 75% of folio.Rest you can select good mid/small caps.

Abhijeet · Sep 14, 2015

Thanks Meenakshi and Kharb for the details, your views on Tree House is awaited..

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1. Bharat Electronics 2.Bharat Forge 3. Tree House

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