Vinit Bolinjkar, Head of Research at Ventura Securities, on Monday said public sector undertaking (PSU) bank shares can potentially surge up to 40-50 per cent in the near term. "You (investors) can be in a very cosy spot when it comes to PSU banks, primarily because their valuations are subdued and market P/E high. You could not ask for a better risk-reward ratio. This is a good point to get in for a quick 40-50 per cent upside from these stocks," the market expert told Business Today TV. When asked to share his top stock picks from the select space, he selected State Bank of India (SBI), Bank of Baroda, Indian Bank, Bank of Maharashtra and Jammu & Kashmir Bank.
Apart from the PSU lenders, the market specialist liked Power Finance Corporation (PFC) Ltd and REC from a vantage point of view.
In response to a query on gems and jewellery, Bolinjkar suggested that shares of Senco Gold Ltd could do really well going ahead. "The company's per store sales is at a fraction of what the other large chains do. With its existing network, it can continue to experience same-store sales doors for a long period of time. Combine this with adding new stores to the network and expanding its offerings. I think it is one of the cheapest stocks going around. So, a price expectation of Rs 1,750-2,000 is not very uncalled for. Even at these valuations, the stock will be at a sharp discount to stocks such as Kalyan and Titan. Senco has got a veritable chance of building on its existing base and can add significant value to shareholders."
The market veteran believes Senco has got the juice in it and valuations are undervalued. "If we talk about other stocks, Kalyan has got rich valuations that also compare very well fairly well with Titan. It is not very difficult for Senco to grow at over 15 per cent CAGR over the next decade," he stated.
From the automobile space, Bolinjkar picked Hero MotoCorp as his top pick. Hero has been a player in the entry segment (100-110 cc). "At present, the two-wheeler maker has 75 per cent market share. With rural story playing out and affordability coming back, the company will benefit," he said.
Meanwhile, Indian equity benchmarks scaled their fresh record high levels today, led by gains in PSU banks, automobile, energy, consumer and realty stocks. Broader markets (mid- and small-cap shares) also traded on a positive note.
15 out of 16 sector gauges -- compiled by the NSE -- traded in the green. Sub-indexes Nifty PSU Bank, Nifty Auto, Nifty Oil & Gas, Nifty Consumer Durables, Nifty FMCG and Nifty Realty were outperforming the platform by rising as much as 3.41 per cent, 1.56 per cent, 1.89 per cent, 1.18 per cent, 0.66 per cent and 2.23 per cent, respectively.
The overall market breadth was strong as 2,382 shares advanced while 1,731 declined on BSE.