Top 19 for 2019: Stocks that could give double-digit returns in a year

Most experts now feel that India Inc. is on track to register double-digit earnings growth in 2019. If the political environment remains stable, we are on track to hit 40K on the Sensex.

To sum up 2018 in one word, I would say ‘exciting’. There was a lot of volatility as benchmark indices touched fresh highs twice in a year and then retreated, but the year offered enough opportunities for long-term investors to buy at lower valuations.

The S&P BSE Sensex is up nearly 6 percent, so far in 2018, while Nifty50 is about 3 percent higher. However, the broader market underperformed frontliners massively.

The Nifty Midcap 100 index is down by about 16 percent while the Nifty Smallcap index is nearly 30 percent lower in the same period.

Well, the good thing is that most of the macro headwinds which Indian market faced in the second half of 2018 have now become tailwinds. Rise in crude oil prices has reversed, rupee is now appreciating against the USD, but the political risk remains as a key headwind for D-Street in 2019.

Most experts now feel that India Inc. is on track to register double-digit earnings growth in 2019.

“The market looks ripe for a major up move in 2019. The lower trajectory of crude price, low inflation regime, softening of sovereign yields, relatively stable currency after the mayhem in INR and partial recovery in domestic earnings (ex-PSUs) are healthy signals for the market,” Amar Ambani, President, and Head Of Research of YES Securities (India) Ltd told Moneycontrol.

Jyoti Roy, Deputy Vice President, Angel Broking told that he expects Sensex to trade in a range of 40,000-45,000 by the end of 2019 depending upon the outcome of the general elections.

“A favourable outcome of the general elections would lead to multiple expansion which can push Sensex closer to euphoric levels of ~45,000 by the year-end. On the other hand, an unfavorable outcome of the general election could depress markets for a few months,” he added.

Here is a list of 19 stocks to buy that could give 10-80% return in the year 2019. The return is calculated from the closing price recorded on December 28:

Analyst: Vivek Ranjan Misra- Head of Fundamental Research at Karvy Stock Broking

ICICI Bank Ltd: Buy| LTP: Rs 361| Target: Price Rs 440| Return 21%

The performance of ICICI Bank continues to underlie the traction in the recovery and stability in the core operating matrix. The headline loan growth numbers showed improvement as the quarter saw lesser drag from the stress book.

Going forward, we continue to see levers for return on equity (ROE) improvement. We expect ROE of ~13 percent in FY2019-20E.

Also, the headline asset quality ratios GNPA improved to 8.54 percent, the net NPA to 3.65 percent and the coverage ratio improved to 59.5 percent compared to GNPA of 8.81 percent, net NPA of 4.19 percent and coverage of 54.8 percent recorded in Q1FY2018-19.

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