NEW DELHI: Calendar 2019 belonged to a handful of largecap stocks.Domestic fund managers, who made the right choices, generated twice as much return as their peers during an otherwise challenging year.What proved to be a common link among the top five performing schemes were two stocks HDFC Bank and ICICI Bank.
Bajaj Finance also had healthy weightage in most of the top performing funds.Shares of ICICI Bank surged 51 per cent for the year, while those of HDFC Bank gained 20 per cent.
Bajaj Finance with 59 per cent return was the top performer in the Sensex pack for the year.
Largecap equity funds delivered an average of 10 per cent return for the year against a 15 per cent expansion in BSE Sensex.
Among the top five equity funds of 2019, IIFL Focused Equity Fund delivered a strong 28 per cent return.
The two banking stocks accounted for nearly 20 per cent of weightage in the funds portfolio.ICICI Bank with a 10.15 per cent weightage was another major holding in the portfolio at the end of November.
The funds holding in the bank stock was actually at a three-year high during the year, shows Value Research data.
HDFC Bank was the second biggest stock in the scheme with a 9.25 per cent weightage.
Axis Bank (7.55 per cent) and Bajaj Finance (4.50 per cent) were other big holdings in the portfolio.
Axis Bank rose 19 per cent for the year.Another scheme, Axis BlueChip Fund, saw 20 per cent jump in NAV.
HDFC Bank was its biggest holding with a 9.05 per cent weightage.
At 7.62 per cent holding, ICICI Bank was its third biggest holding.
The fund also had Reliance Industries (7.69 per cent), Kotak Mahindra Bank (7.38 per cent) and Bajaj Finance (7.37 per cent) among its portfolio stocks.
Reliance Industries and Kotak Mahindra Bank climbed 35 per cent each during the year.Money making30 Dec, 2019Calendar 2020 is set to begin amid mixed sentiments in the market.
While broadly the expectations are that Dalal Street should do better in 2020 than in 2019 and the broader market will start performing better, yet investors do not have the confidence to take the plunge and go value hunting in the deeply beaten-down counters.
We rummaged through a dozen year-end brokerage reports to shortlist seven stocks from across sectors that, they say, offer decent potential to deliver solid gains in the year ahead.Larsen - Toubro: Upside potential 37%30 Dec, 2019Axis Securities values this stock at 20 times FY21 EPS to arrive at a target price of Rs 1,736.
With the surge in order intake of Rs 86991 crore in H1Fy20, the company crossed the Rs 3 lakh crore order book milestone at the end of September quarter, with international orders accounting for 22 per cent of the total order book.
Deal pipeline remains strong at Rs 5.2 lakh crore for H2FY20, with 18-20 per cent win run-rate, Axis Securities said.
L-T, it said, is well placed to surpass its inflow guidance of 10-12 per cent.
for Fy20 KEC International: Upside potential 33%30 Dec, 2019Brokerage SMC Global noted that KEC International is continuously performing well and delivering in all the three parameters of revenue, profitability and order intake.
The T-D business of the company has delivered a stellar performance, backed by robust execution in SAARC and the Americas, while the railway business has continued its growth momentum as it expands portfolio in other segments.
The company has maintained its annual guidance of 20 per cent growth for FY20 revenue.
SMC Global expects the stock to see a price target of Rs 392 in 8-10 months time frame on a one-year average P/E of 14.06 times and FY21 earnings per share of Rs 27.90.
Gujarat Gas: Upside potential 22%30 Dec, 2019Religare Broking noted that the company has a strong infrastructure and distribution network and enjoys near monopoly in the Gujarat state.
The network expansion in other states may boost volumes going forward.
The company is likely to deliver robust performance in FY20 as it has witnessed remarkable industrial volumes so far, the brokerage said.The company has adjusted to new tax regime, resulting in an writing off of deferred tax liabilities that led to 13 times YoY growth in quarterly profits in Q2FY20.
Although the growth is likely to taper down in FY21, given higher base of the last year, we expect the company to deliver strong profit CAGR of over 35 per cent during FY19-22E, the brokerage said.
Hindustan Unilever: Potential upside 28%30 Dec, 2019After incorporating GSK Consumer Healthcare merger, the opportunity for HUL is huge, said Nirmal Bang Institutional Research, which sees see the FMCG firms earnings to grow at a CAGR of 23 per cent over FY19-22.
This is without assuming any synergy benefits in margin estimates.
On the valuation front, the stock is trading at 46 times/39 times Y21/FY22 EPS and has delivered a return of 20 per cent in the past one year.Volume delivery has been ahead of its much smaller peers and margins visibility could help sustain such premium valuations in the current environment, supported by best earnings growth visibility in the Indian FMCG space with the highest return ratios, the brokerage said.On a target multiple of 54 times September21 EPS, we derive a target price of Rs 2,490, the brokerage said.
DSP Focus Funds NAV rose 19 per cent for the year.
ICICI Bank and HDFC Bank were the two biggest holdings of this fund with 10.66 per cent and 10.41 per cent weightage, respectively.ICICI Banks holding in this fund was also at a three-year high as of November 30.
Bajaj Finance and RIL were the two other major holdings.
BNP Paribas Large Cap Fund surged 18 per cent year to date.
ICICI Bank and HDFC Bank were the two biggest holdings in the portfolio with of 9.41 per cent and 8.52 per cent weightage, respectively.The same story repeated in Motilal Oswal Focused 25 Fund.
HDFC Bank had a 10.65 per cent weightage in the portfolio while ICICI Bank had 9.63 per cent.We expect private sector banks to benefit from lower cost of funds, better asset quality and consolidation of the industry.
Hence, despite subdued economic activity, we except large private banks to deliver better growth and improve their return ratios, said Vikaas Scahdeva, CEO at Emkay Investment Advisors.Gautam Duggad, Head of Research for Institutional Equities at Motilal Oswal Financial Services, said ICICI Bank appears firmly positioned to deliver healthy sustainable growth, supported by continued investments in technology and expansion of its digital offerings.The bank has navigated well through a challenging macro environment with limited exposure to the newly-surfaced stressed names.
It has, in fact, built one of the highest provisioning coverages in the banking sector.
ICICI Bank remains one of our top ideas from the BFSI space, he said.YES Securities named HDFC Bank among the three banking stocks that may do well in 2020.Only largecap and multicap schemes were considered for this analysis.