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Best stocks to BUY in 2013

Last updated on: January 15, 2013 18:02 IST

Best stocks to BUY in 2013

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Salil Dhawan

The year 2012 has proved to be a reasonably good year for Indian indices with gain of over 25 per cent for benchmark indices. Sectors such as banking and financial services, FMCG, pharmaceuticals have done well over the year and there's greater optimism as we enter the year 2013. Most of the retail investors haven't participated in the rally and may look to enter the market in the New Year.

A stable 2013 is hoped by most of the investors wherein key developments on domestic front will include RBI monetary policy, union budget, inflation, growth and fiscal deficit data will be watched closely, government continued stress on key economic reforms on the domestic front will enhance investor confidence further. On the international front, Euro zone crises will be under scanner and so will be US growth outlook.

We list out five businesses you can look to buy in 2013:

1. State Bank of India (SBI)

India's largest bank will be the biggest beneficiary of reduction in interest rates and will be first one to rally on the back of improvement in investor sentiment. With returns close to 44.8 per cent over the last one year, SBI can be a good bet in large cap PSU banking space.

Bank's asset quality, however, will be under watch.

Disclaimer: The equity portfolio suggested here is a model portfolio. Investors are advised to consult their financial advisor before taking any investment decision. Any use of the information /any investment and investment related decisions of the investors/recipients are at their sole discretion and risk.

Courtesy: Investment-mantra.in


Image: Price movement of SBI from February 2012
Photographs: Rediff MoneyWiz

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2. Yes Bank

Yes Bank is one of the fastest growing private sector banks which is looking to aggressively increase its focus on retail banking. Banking NPAs (non-performing assets) also are well under control and the bank is aggressively looking to expand.

With returns of close to 100 per cent in the last one year , investors can look to get even better returns in the year 2013.


Image: Price movement of Yes Bank from February 2012
Photographs: Rediff MoneyWiz

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3. Bharti Airtel

Telecom sector has been marred by uncertain regulatory environment in the year 2012. In addition, high spectrum costs have led to high interest costs eating into the operator's profits. If the regulatory framework were to improve in the year 2013, consolidation happening in the sector and tariffs are on the way up, sector leaders such as Bharti Airtel can lead the rally.

In addition, its African operations are showing considerable improvement quarter-on-quarter.


Image: Price movement of Bharti Airtel from February 2012
Photographs: Rediff MoneyWiz

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4. Bajaj Auto

One of the best managed companies in India, Bajaj Auto with its excellent business model will be biggest beneficiary if rate cut happens in the year 2013. In addition, if rural demand picks up, Bajaj Auto will be benefitted. New launches in the New Year will augur well for the company.


Image: Price movement of Bajaj Auto from February 2012

Tags: Bajaj Auto , BUY , India

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5. Titan Industries

Riding on the consumption theme, Titan Industries will continue to do well in the year 2013. In addition, company's expansion plans seems on track and company can also look to diversify in other new areas.

The stock returned close to 57 per cent over the last one year.

Conclusion

2013 will more be a year of consolidation and investors will need to pick stock of companies with good fundamentals, robust business outlook and progressive managements. Stocks such as Lupin, Dr Reddy's , HDFC , HDFC Bank , IndusInd Bank , L&T will also be watched closely and can give good investment opportunity for long term retail investors.


Image: Price movement of Titan Industries from February 2012


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