Falling markets are often viewed as the worst-case scenario for most investors in the stock market. However, there is another perspective to falling markets whereby they are also considered an ideal opportunity for new investments. Generally, companies with high growth potential are considered favourable investments. During a bear market, the prices of stocks may fall sharply, and investors can panic and sell their shares to further cut their losses, Instead, it is recommended to stay patient, keep a keen eye on the fundamentals of your investments and act as required.
The first stock on our list is India’s largest mortgage lender, HDFC. HDFC chairman Deepak Parekh said even though interest rate cycles may move up and down, customers who want a home will not hold back. This indicates the business will not be impacted. Domestic retail inflation based on Consumer Price Index (CPI) rose in the month of March 2021, and came in at 5.52% YoY, as against 5.03% YoY in February 2021 There was a broad-based rise in inflation across most of the segments of CPI in the month of March 2021, which along with an unfavorable base effect led to rise in inflation. CPI food inflation rose and came in at 4.94% YoY in March 2021 as against 3.87% YoY in the previous month. Investors with an investment horizon of 12 months and above can look at short duration funds. Whereas, for a horizon of up to 3 months, investors can consider Overnight Funds and Liquid Funds. Investors should invest in line with their risk profile and product suitability.
Manappuram Finance, an NBFC primarily dealing in gold loans. Manappuram Finance has an established market position in the gold loan market. In the financial year 2021, the company’s gold loan assets under management (AUM) grew by 7.6% despite increasing competition from banks. The asset quality of the company has also been sound, except for fiscal 2021 when NPA levels marginally increased on account of the pandemic. However, this has steadily improved on account of the improvement in the repayment capacity of certain borrowers. With a revival in demand and an uptick in gold prices, the company’s revenue is expected to increase over the medium term. The company also has the ability to absorb asset quality and earnings risks in the microfinance, vehicle or housing finance businesses in the near term. In the last two quarters, the company traded off margin for gold loan growth. This new business strategy helped it cover a lot of lost ground in terms of market share.
Hero MotoCorp Limited is an Indian multinational motorcycle and scooter manufacturer headquartered in New Delhi. The company is the largest two-wheeler manufacturer in the world and also in India, where it has a market share of about 37.1% in the two-wheeler industry. The market capitalization of the company was ₹59,600 crore (US$7.8 billion. Hero MotoCorp, the largest two-wheeler manufacturer in the world. Shares of the company have been in a downslide in the last year as the pandemic hit demand and raw material cost inflation impacted profitability. Hero MotoCorp has also indicated that the EV product launch plan in 2022 is on track and that it will continue to focus on its EV portfolio, supported by new launches/variants at regular intervals. While Hero MotoCorp’s core business still lies in the motorcycle segment, the company believes that scooters will lead the adoption of electric vehicles in the country in the near term. To gain an edge over other manufacturers, Hero MotoCorp will adopt Ather Energy’s fast-charging tech for its electric scooters. The company owns a 35% stake in the EV startup.
It has also partnered with Gogoro to roll out Hero-branded e-scooters with a swappable battery.
Gogoro is a global leader in urban battery swapping and smart mobility innovation and is based out of Vietnam.
The company’s investment in various fintech and SaaS (software as a service) based companies has also led to investors questioning its aggressive expansion plans. The company spent ₹ 900 crore on acquiring start-ups in the last year. Going forward, the increasing adoption of the internet by businesses will fuel long-term growth. The company is committed to leveraging the opportunities that come by. It has a portfolio of 6 million supplier storefronts, 102 m registered buyers and a total traffic of 748 million repeated users. However, IndiaMART fundamentals are still intact. The company is the largest B2B digital marketplace in the country. It has nearly 60% market share of the online B2B classifieds space. IndiaMART InterMESH Ltd. is an Indian e-commerce company that provides B2B and customer to customer sales services via its web portal.
UltraTech Cement Limited
UltraTech Cement Limited is an Indian cement company based in Mumbai, and a part of Aditya Birla Group. UltraTech is the largest manufacturer of grey cement, ready mix concrete (RMC) and white cement in India with an installed capacity of 116.75 million tonnes per annum. It is the only company in the world to have a capacity of over 100 million tonnes in a single country, outside of China. UltraTech Cement has 23 integrated plants, 1 clinkerisation plant, 26 grinding units and 7 bulk terminals. In the white cement segment, UltraTech goes to market under the brand name of Birla White. It has a white cement plant with a capacity of 0.68 MTPA and 2 WallCare putty plants with a combined capacity of 0.85 MTPA. With 100+ Ready Mix Concrete (RMC) plants in 39 cities, UltraTech is the largest manufacturer of concrete in India. The next quarter typically is the best quarter in terms of demand for cement companies and typically they carry an inventory. So next quarter will see the worst impact and during the monsoon, typically the demand becomes sluggish. So the next three to six months will be somewhat tough for cement companies and in this timeframe, we will get opportunities. The company has been aiming to reduce its debt. Once this comes to a reasonable level, the addition to earnings is likely to improve sharply, though it takes a couple of quarters to reach that space.
Escorts Limited is an Indian multinational conglomarate that operates in the sectors of agricultural machinary, construction machinery, material handling and railway equipment. Its headquarters are located in Faridabad, Haryana. The company was launched in 1944 and has marketing operations in more than 40 countries. Escorts manufactures tractors, automotive components, railway equipment, and construction. Escorts Limited goal is not merely nation-building; it is to create conditions for maximization of national economic strength, by helping meet the growing requirements of India’s infrastructure, realty, and mining sectors, among others. In the early 1980s, Escorts started making Yamaha motorcycles in India. Rajdoot 350 was launched in 1981, which was later followed by the Yamaha RX 100 in 1984. The motorcycle manufacturing unit in Faridabad, India, was sold to Yamaha in the late 1990s when Escorts decided to quit the motorcycle business to concentrate on tractors and auto components. Escorts has a plant in Mrągowo, Poland, that was purchased from Pol-Mot in 2000. and four plants in India. Tractor and construction equipment maker Escorts is planning a capital expenditure (capex) of ₹225-250 crore this fiscal in view of some favourable business prospects.
The MRF story is a truly fascinating one. What started as a rubber balloon factory with a funding of Rs.14,000 way back in the 40’s is now a multibillion legacy that produces quality tyres used all around India & internationally along with a presence in paints & coats, toys, motorsports and cricket training. MRF’s origin traces back to the humble shack in Madras that housed its first makeshift toy balloon manufacturing unit set up by KM Mammen Mappillai in 1946. It was not until 1952 when it changed course and turned to tread rubber manufacturing. Thus began its glorious reign as the undisputed leader in the tread rubber industry. MRF was exporting its quality tyres to multiple countries and soon its presence was known globally in 65 different countries – with tyres rolling out of 10 facilities built across 450 acres, 5000 plus strong dealer networks and 130 different offices. MRF is recognized for its drive towards continuous quality improvement and customer satisfaction. It has won the JD Power award not once but 13 times till date. It has also won the TNS and CAPEXIL awards for being voted as the most trusted tyre company in India. MRF’s passion for motorsports is seen through its involvement in racing, karting, rallying and various other motorsport events. Its rallying team has won the prestigious FIA Asia Pacific Rally Championship twice and even in international championships, MRF karting tyres homologated by FIA, is the preferred choice. MRF launches the ‘Nylogrip Ezeeride’, which boasts of making every motorcycle ride an Ezeeride & is one of the most innovative additions to its range of tyres.