Budget 2018 and My views

 

Most analysts expect the government to focus on increasing government expenditure on rural economy to kickstart the important vertical of the economy. So here are few stocks which we find to reap the benefits:

 

1.UPL

-UPL is a leading manufacturer of crop protection products and ranks among the top 5 generic agro-chemical companies globally.
-It offers a range of crop protection products, such as herbicides, insecticides, fungicides. Led by backward integration and higher contribution from branded products, UPL enjoys superior EBITDA margin of 18%- 19.8% compared to industry average of 12-15 percent.
In my opinion it is the first beneficiary of the rural economy. As per the valuation , it looks good to me and it is expected to maintain good profit this year too.
In addition it is the right time as per the cycle (jan-march) to enter this stock.

2.Godrej Agrovet

This company have a lot of things playing in its favour
1. Deep moat business model.
2.Strong corporate governance
3.Diverse product mix
It has strong financials; more than 40 percent PAT CAGR over past 7 years, minimal working capital requirement, RoCE of around 20 percent, high asset turn (~5x). We expect 20 percent PAT CAGR over FY17-21.

As I understand , if rural economy spurs,it would require this company’s inputs. As it cover end to end of agriculture.

Anurag

Experience of 8 years in stock investment. I learned everything by making a lot of mistakes and losing a good amount of money, I am here to make sure you don’t lose on either: Hope or Money.

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