Here’s Antique Stock Broking’s List Of ‘Quality Stocks’ Amid Market Downturn

Antique Stock Broking Ltd. has envisaged a strategy to accumulate good quality stocks with low business risks as well as stocks investors should avoid in the current turbulent macro environment.

The brokerage has screened the stocks based on these criteria:

• Revenue growth of at least 10 percent over financial years 2019-21 as nominal GDP growth for quarter ended June was only around 8 percent.
• Companies that could have a potential margin expansion in context of lower commodity prices.
• Stocks that are trading at a discount to their three-year average price-earning multiple.

India’s equity benchmarks fell for the third straight month in August and entered September on a tepid note even after the government announced several measures to revive the economy and rolled back a tax surcharge on foreign investors. Still, that didn’t deter overseas investors to pull out money from the equity market. Also, commodity prices rose as trade tensions between the U.S. and China escalated.

Here are a few stocks that fit the bill:

Large Caps

• Reliance Industries Ltd.
• HDFC Bank Ltd.
• ITC Ltd.
• ICICI Bank Ltd.
• Larsen & Toubro Ltd.
• UltraTech Cement Ltd.

Mid Caps

• TVS Motor Company Ltd.
• Federal Bank Ltd.
• Gujarat Gas Ltd.
• Natco Pharma Ltd.
• NALCO Ltd.
• Kajaria Ceramics Ltd.

Antique Broking has also cautioned against investing in companies that have a “heavy” inflow stemming from foreign portfolio investors. That’s because the trade war may lead to a currency depreciation in emerging markets, prompting FPIs to prefer developed markets instead, it said.

The brokerage advised investors to stay away from these stocks:

• HDFC Ltd.
• Maruti Suzuki India Ltd.
• Hero MotoCorp Ltd.
• LIC Housing Finance Ltd.
• Mahindra & Mahindra Finance Ltd.
• City Union Bank
• Mannapurram Finance Ltd.
• DCB Bank Ltd.
• Cyient Ltd.