Here Are the Stocks on Analysts’ Holiday-Shopping Lists in India

(Bloomberg) — As India prepares to celebrate its Diwali festival this weekend, stock brokers see growing signs of an economic recovery from the pandemic as reason to cheer and advise investors to buy cyclical stocks.

Companies in sectors including cement, housing, software, healthcare, telecommunications and financials are among their top picks as business activity in the nation picks up pace after the world’s largest lockdown. Diwali, the Hindu festival of lights, is considered auspicious for purchases of everything from automobiles to apartments, and even shares.

India’s factory output turned positive for the first time in seven months in September, official data showed Wednesday. And the benchmark S&P BSE Sensex climbed to a record this week as foreign purchases of local stocks surged.



chart: Sensex has recovered sharply to reach new highs this year


© Bloomberg
Sensex has recovered sharply to reach new highs this year

“With economic activity recovering fast, more earnings upgrades cannot be ruled out,” according to Motilal Oswal Financial Services Ltd. in a note. “Strong global markets can keep liquidity abundant in the system, providing support to the overall market.”

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Here are some of analysts’ top picks for the festival season:

IIFL Securities

Reliance Industries Ltd.Retail and telecom businesses have enabled significant deleveraging and are turning in solid performance, offsetting weakness in refiningEntry into post-paid and enterprise segments, collaboration with Google for entry-level smartphones will drive growth for JioInfosys Ltd.Should outperform Tata Consultancy Services Ltd. on revenue growth in FY21 for the first time in 15 yearsWith investment phase completed, margins should start to improve

Anand Rathi Securities

Divi’s Laboratories Ltd.Leading manufacturer of active pharmaceutical ingredients, with over 70% of revenue from Europe and U.S.Good growth prospects thanks to supply-chain changes and diversification away from ChinaVIP Industries Ltd.Demand for luggage is gradually recovering as malls reopen and travel resumesStrong balance sheet and market-leading position make it better placed to deal with tough market conditions than peers

Motilal Oswal

Bharti Airtel Ltd.Posted strong India mobile Ebitda growth of 16% cumulatively for last two quartersRobust 10 million subscriber base

State Bank of India

Earnings normalization has begunBest play among public-sector banks on gradual economic recoveryHealthy provision coverage, robust capitalization, strong deposit base and improved core operating profitability

Axis Securities

Can Fin Homes Ltd.Strong balance sheet, low bad loans, strong underwriting and well-spread loan bookAbility to improve net interest margin in tough environmentShould recover more quickly than peers due to its loan mix and negligible exposure to property developersDalmia Bharat Ltd.To benefit from revival in cement demandCapacity expansion, better monitoring of cost drivers and increased realization to drive sales and profit growth

Nirmal Bang Institutional Equities

HCL Technologies Ltd.To benefit from digital infrastructure buildout catalyzed by the pandemic, a 3-5 year opportunityHas the biggest opportunity among among Indian players, with about 30% of its revenue coming from helping clients move infrastructure to the cloudInox Leisure Ltd.Considerable room for growth at an attractive valuation from a medium-term perspectiveShould benefit from pent-up demand among filmgoers and closures of single-screen and smaller theater chainsStrong balance sheet is a big positive over PVR

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Amazon blows away analysts’ revenue and profit expectations, as online shopping continues to surge



Jeff Bezos wearing a suit and tie: Amazon's CEO Jeff Bezos speaks at an event in Washington. REUTERS/Joshua Roberts


© REUTERS/Joshua Roberts
Amazon’s CEO Jeff Bezos speaks at an event in Washington. REUTERS/Joshua Roberts

Amazon reported a huge earnings beat across the board on Thursday.

But its stock dropped about 1% in after-hours trading, as fourth-quarter profit estimates came in below Street estimates. Amazon shares are up over 70% this year.

Here are the most important numbers versus what analysts were forecasting: 

  • EPS (GAAP): $12.37 vs. $7.41
  • Revenue: $96.1 billion vs. $92.71 billion 
  • AWS: $11.6 billion vs. $11.61 billion 

Amazon’s sales grew 37% to $96.1 billion in the third quarter, driven by the heightened demand in the face of the COVID-19 pandemic. Net profit roughly tripled to $6.33 billion.

Video: UPS Rolls Out Strong Quarter as Pandemic Drives Deliveries (TheStreet)

UPS Rolls Out Strong Quarter as Pandemic Drives Deliveries

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Amazon CEO Jeff Bezos said in a statement that the company is seeing a record number of shoppers.

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“We’re seeing more customers than ever shopping early for their holiday gifts, which is just one of the signs that this is going to be an unprecedented holiday season,” Bezos said in the earnings statement.

The lockdown-driven demand increase is expected to continue through the holiday season, as Amazon gave revenue guidance in the range of $112.0 billion to $121.0 billion, above analyst expectations of $112.7 billion. 

But Amazon said operating profits are likely going to take a hit in the fourth quarter, as it expects to spend approximately $4 billion on COVID-related costs. Amazon said its fourth-quarter operating profits will fall between $1.0 billion and $4.5 billion, below the $5.81 billion Street estimate.

Amazon Web Services had $11.6 billion in sales, up 29%, which is in line with Street expectations. Amazon’s “other” segment, which is mostly comprised of its advertising business, reported $5.4 billion in sales, a 51% jump from the year-ago period. Physical store sales, meanwhile, dropped 10% to $3.78 billion.

Amazon’s total employee count grew 50% from last year, and now stands at 1.13 million, the first time it crossed the 1 million mark.

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