InvestorQ : What is your view on stocks like Hindustan Lever, Asian Paints and Bajaj Finance? I have identified these 3 stocks to buy and want to hear views?
Katherine Gonsalves made post

What is your view on stocks like Hindustan Lever, Asian Paints and Bajaj Finance? I have identified these 3 stocks to buy and want to hear views?

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Rutuja Nigam answered.
2 years ago
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At the outset, it is a great choice of stocks and all the three are great long term bets on the India consumption story. Let me tell you why I like these three stocks.

Hindustan Unilever

You are worrying about a slowdown but that really is not a worry. Notwithstanding all the hue and cry over consumption slowdown, HUVR hardly appears to be impacted. Top line growth may have tapered but the profit growth continues to be robust. With a strong rural franchise, HUVR is best poised to capture the rural mass market when demand picks up. The full benefit of GST on its efficiency and profitability is yet to manifest in a bigger way.

Asian Paints

This stock always has a special place in any value portfolio. Even as most FMCG companies have protested about the slowdown, Asian Paints has continued to flatter. There are a number of reasons. Firstly, it has made a big shift towards decoratives and that is less vulnerable. Its direct access model has helped to have full control over the value chain. Of course, low oil prices reduce its input costs and give a natural edge to Asian Paints.

Bajaj Finance

The stock fell sharply last year but bounced to new highs, which is what champions are all about. If you think the stock is quoting at a rich valuation, you are perhaps right. But Bajaj Finance will benefit from the “winner takes it all” structure of NBFCs as other are struggling with basic issues. In addition, the retail focused business model and zero asset liability mismatch makes Bajaj Finance one of the top picks in the financials space. Forget the P/E ratio and focus on the story

I only have one suggestion to you. In all the cases above, adopt a phased approach. Instead of pumping all your money in one go, put some allocation each fortnight so that you also get a good price and benefit from the volatility.

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