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Saturday, October 4, 2008

Best Indian Companies for investment


Which company has the potential to become next Infosys or Airtel or Suzlon or Praj? Visionary investors always search to find emerging giants which have the potential to yield more than 500% returns in 3-4 years. Many emerging companies generally get funding from PE players but still some companies opt for IPO route. If you pick the right stock, it will change your life forever. High risk and high return is the basic character of an emerging and niche Company.

Characteristics of emerging stocks:

1. These stocks have the potential to give exceptional returns if investors buy and remain invested in them for 4-5 years.

2. Risk is generally high as most of these sectors are in untested zone and converting ideas into viable businesses is a great challenge for enterpreneurs.

3. Some companies start with a good idea but failed to execute them in time. Don't expect that every company will become another Infosys or Suzlon.

4. You should not look at balance sheets when you invest in them. That's why value investors generally do not buy emerging companies. Learn to see bigger picture before investing in them.

5. These stocks are generally bought by foreign investors and highly educated investors which are now staying away from Indian stock markets. These stocks generally fall heavily in bear markets and will command very high valuations in bull markets.

6. These stocks are meant for patient investors who have vision and ability to stay invested for long term.

Stocks in emerging sectors:

1. Solar energy:

A. XL Telecom and Energy:

B. Webel SL Energy:

C. Moserbaer: This Company is an emerging giant.

D. Tata Power: Through Tata BP Solar.

E. BHEL and BEL: Benefit from solar boom.

F. ONGC, BPCL, HPCL, Lanco Infra, Reliance Industries, Reliance Infra and Videocon: Mixed players.

G. Titan Energy:

2. Wind Energy:

A. Suzlon: Giant in this space.

B. Elecon Engineering: Mixed player.

C. Shriram EPC: Mixed player.

D. Indowind Energy:

E. Lanco Infra and Reliance Infra: may enter in future.


3. Bio-fuels:

A. Southern Online Biotech:

B. IKF Technologies:

C. KSK Energy:

D. Praj Industries:

E. Tata Chemicals, BPCL, IOC, and HPCL: Mixed players.

F. Sugar Companies: Benefit in future.


4. Electric vehicles:

A. Tube Investments: Reliance mutual fund is betting on it.

B. Electrotherm: leader in this segment and a mixed player.

C. Hero Honda and TVS Motors: Mixed players.


5. Water Management:

A. ION Exchange India:

B. Jain Irrigation:

C. Eureka Forbes:

D. Kirloskar Brothers, KSB Pumps and Kaycee Industries

E. Pratibha Industries, Hindustan Dorr-Oliver, IVRCL Infra, Subhash Projects and Thermax:

F. Bisleri and Himalaya: Mineral water players.


6. Waste Management:

A. Jindal Saw: Through Jindal ITF. This company may surprise analysts within 2 years.

B. Infotrek Syscom:

C. Subhash Projects and Management.


7. Mobile Value added services:

A. On mobile: Leader in this space.

B. Tanla Solutions: Cheap valuations.

C. Geodesic Information: Internet niche.

D. Tulip Telecom: Mobile networks.

E. R Systems: Mobile IPTV and IPLM Solutions.

F. Micro Technologies: GPS, Wireless Communications and Business intelligence.


8. DTH players and HITS Technology:

A. Dish TV:

B. Wire and Wireless: HITS Technology.

C. Sun TV, Reliance Communications, Tata Communications, Bharti Airtel and Videocon: Mixed players.


9. Logistics: This sector is not an emerging play but has huge potential.

A. Global Vectra.

B. Larsen and Toubro

C. Container Corporation of India

D. Sical Logistics, Gateway Distriparks and many others.


10. Contract Research and Manufacturing (CRAM): Not emerging sector but has huge growth potential.

A. Divis Labs, Dishman Pharma, Lupin, Nicholas Piramal and Jubilant Organosys.


Niche players:


11. Smart cards: Bartronics.

12. Animation: Compact Disc India

13. Astral Microwave: Microwave and MIC.

14. LCD panels: MIC Electronics.

15. Plastics: Time Technoplast.

16. Semiconductor: SPEL Semiconductor.

17. Gaming: UTV Software and Compact Disc India.

18. Education: Educomp Solutions and Everonn Systems.

19. Medical Diagnostics: Opto Circuits India.

20. Medical Research: Piramal life (high risk) is a safe stock than others.

21. Vaccines: Panacea Biotech, Biocon, Wyeth and GSK healthcare.

22. Nutraceuticals: Wockhardt, Plethico Pharma, Divis Labs, Merck and Dishman Pharma.

23. Drip Irrigation and Food processing: Jain Irrigation, ITC, Nestle, Dabur and HUL.

24. Power solutions: ICSA and KLG Systel.

25. Ratings: CRISIL and ICRA.

26. CNG: Nitinfire Protection and Everest Kanto Cylinder.

27. Seismic Tests: Alphageo.

28. Security: Honeywell Automation and Zicom.

29. Floriculture: Karuturi Global.

30. Agriculture and Crop protection: Rallis, Advanta, Monsanto, Kavuri Seeds, Syngenta, Bayer Crop, United Phosphorus and Tata Chemicals.

31. Poultry: Venky's.

32. Farm Equipment: Jain Irrigation, Kirloskar Bothers, KSB Pumps and Mahindra and Mahindra.
Source: StockMarket Guide

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