Stocks that could Prove to be Dark Horses in this Earnings Season
With Central banks increasing the valuation of their balance sheets to $13 trillion in the upcoming 18 months, London Metal Exchange seems to be on a high. On the other side, Tata steel, who recently reduced their debts by almost a billion dollars this year, managed to produce almost 7.4 million tonnes through Indian and European factories. Indian Steel and Tata Metaliks also merged recently providing more cost and operational options.
On the IT side, although TCS had doubled their $100 million client list in the past five years, a valuation advantage might be given to HCL and Infy. During the recent early period in the multi-year tech spend, TCS has targeted cloud adoption and maintenance as their prime goals. The latter part of the period might entail heavy spending for A.I, virtual reality, data analytics, etc, while maintaining their 26-27% margins. On the other hand, 70% of HCL’s income comes from app modernisation which puts them in a good place to grow.
Over in the energy and oil sector, with lots of doubts on performance, Reliance has maintained its grip with 60% of their EBITDA as they continue to improve. Reliance digital and electronics are projected to contribute more as retail numbers are set to go up. To top it all of their e-commerce has been on the rise with no signs of stopping soon.
ITC has been facing quite a few problems recently with the upcoming budget and negative coverage on tobacco laws in India. Simultaneously, their FMCG business is on a rise with a lot of brands in Hygiene, biscuits, etc. ITC’s hotel and tobacco business, even with a margin of safety, has been overlooked and Tata Consumer has prevailed with consistent results specially from their coffee sector.
Finally, in terms of QSRs Jubilant foods has been on the rise with them purchasing 10% stake in Barbeque Nation this month. Polycab has slowly started to enter the B2C market with their retail electricals and water heaters making them a top pick in the wires and electrical sector.