The general rule of thumb is that shares bought for less than one-year holding duration are considered as short-term shares. Here are the best shares to buy today for short term duration of around six months. These top shares can be a bought now, today, tomorrow, or any other day as long as they are around the price recommended. If your time horizon is long term i.e. more than a year then visit best shares to buy for long term.
Disclaimer: Shares recommended and opinions below are for informational purposes and shouldn't be taken as a final advice from Niveza India. You shouldn't rely on this free advice solely and do your own research to arrive at the final conclusions. Our final opinion on which shares to buy for short-term investments is sent via SMS and Email to subscribers of Our Premium Products.
Shares To Buy For Short-Term
PVR Ltd (NSE: PVR) (Share Price: Rs.1897): Potential Buy
Valuation: Overvalued with TTM PE of 59x
Reasons to Consider: In the current quarter, so far, the box office collections have shown a grand 35%+ YoY growth. Net box office collections for latest quarter were largely led by movies like War, Housefull 4, Dabangg 3, Bala, Good Newwz and Pati Patni aur Woh. Going ahead, we see multiplexes to continue their organic expansion as the overall business economic and content pipeline remains favorable. Moreover, PVR is expected to add 75 screens for FY21 which would aid the topline further.
Key Drivers: Multiplexes remain the only segment that continues to deliver a strong performance even in the economic slowdown. The strong content creation and performance are the key reasons for the growth. Moreover, in the upcoming quarters the content pipeline appears to be strong with movies like Street Dancer 3D, Tanhaji: The Unsung Warrior, Chhapaak, Baaghi 3, Shubh Mangal Zyada Saavdhaan, Sooryavanshi, 83, Coolie No.1, Laxmmi Bomb, etc. due for release.
Financial: In Q2FY20, the company reported revenue of Rs. 973 cr with a growth of 37% YoY where operating profit came in at Rs.318 cr. Operating profit margins expanded by 100 bps as against last quarter and came in at 33%. Company reported a PAT of Rs.48 cr vs Rs.35 cr in Q2FY19.
Tata Steel Ltd (NSE: TATASTEEL) (Share Price: Rs.487.8): Potential Buy
Valuation: Undervalued at TTM PE of 6.6x
Reasons to Consider: Tata Steel is one of the largest steel manufacturers globally along with an installed crude steelmaking capacity. On a consolidated basis, the company has a capacity of ~34.0 million tonnes (MT) of which ~19.6 MT of capacity is in India. Indian capacity contributes around 57% of total capacity and its higher margin geography. Going forward, the company is planning to increase Indias capacity to 30 MT by 2025 through organic & inorganic routes. With the growing contribution from high margin domestic capacity company is expected to provide decent returns with robust financials
Key Drivers: Growing demand environment along with rising steel prices would drive the stock in the upcoming days. With the easing of the US-China trade war would be an added advantage for the stock. Moreover, the company is planning to reduce its debts by around US$ 1 billion, if management succeeds then this can strengthen the balance sheet of the company.
Financial: In Q2FY20, the company reported revenue at Rs.34579 cr, a decline of 4% QoQ and 21% YoY. With a tax credit, PAT came in at 4043.5 Cr In Q2FY20 vs 3121.7 Cr Q1FY20. Whereas EBITDA stands at 3819.6 cr in Q2FY20.
Jubilant Foodworks Ltd(NSE: JUBLFOOD) (Share Price: Rs.1723.9): Potential Buy
Valuation: Overvalued with TTM PE 64x
Reasons to Consider: The company has reported robust revenue growth of 12.1% YoY amid a challenging demand environment and high inflationary pressure. Considering the increasing contribution of On-line ordering and delivery sales than dine-in sales company is taking consistent efforts towards the same. Further, the company also plans to reduce its delivery time and also offer some innovative delivery solutions to win the customers. In FY18 it has re-launched its Dominos app with some smart delivery options to improvise the customer experience. With the targeted promotions and enhanced its delivery efficiencies and manpower productivity company is expected to shine in the upcoming years.
Key Drivers: Continued product innovation and superior control over the supply chain is expected to bode well for the company in the longer run. After an improved user interface the company has witnessed a healthy surge in its user base, which would help the company to survive the challenging competition from food aggregators. Market share dominance and product innovations give a competitive edge to the company.
Financial: Company reported a robust 12% YoY revenue growth in Q2FY20. With the healthy Dominos sales growth company reported revenues at Rs.988.2 cr. On account of tax changes and one-time exceptional items, the company reported PAT at Rs. 75.9 cr with 2.2% YoY decline. EBITDA margin expanded by 700 bps YoY and came in at Rs.235 cr.
Axis Bank Ltd (NSE: AXISBANK) (Share Price: Rs.737.8): Potential Buy
Valuation: Fairly valued at TTM PB of 3.1x
Reasons to Consider: In the latest quarter (Q2FY20) banks Gross NPA and Net NPA moderated by 22bps and 5bps QoQ to 5.03% and 1.99%. With this, it has marked a 6th consecutive quarter of declining NPA ratios among challenging business environments. Increased focus on the asset quality and managements focus towards building healthy margins and balance sheet makes it attractive in the current market scenario.
Key Drivers: The bank maintained a healthy growth sprint in its loan book. In the last 5 years, the loan book has grown at a pace of 17% CAGR which is above the industry of which the retail segment grew at 23% CAGR. The retail loan book contributes around 75% of the book and its proportion has been increased in the last 5 years from 38% to 52%. Going ahead, on the back of consistent investment for increasing reach is expected to aid the earnings. Banks efforts to leverage the technology to enhance existing relationships with its customers will lead to increased CASA and deposit growth in the near term.
Financial: NIM improved by 11bps sequentially to 3.51% in Q2FY20 whereas net interest income grew 16.6% YoY to Rs. 6,102cr. Pre-provision profit came in at Rs. 5,952cr with 45.4% YoY growth. Owing to the one-time tax impact of Rs. 2,138 crores due to tax rate changes, reported net profit witnessed a decline of 114% YoY.
Apollo Hospitals Ltd(NSE: APOLLOHOSP) (Share Price: Rs.1484): Potential Buy
Valuation: Overvalued at TTM PE of 68.2x.
Reasons to Consider: One of the best-integrated business models in the
Indian healthcare space with a strong management pedigree thats the key reason to consider for Apollo hospital. Its wide presence across the value chain of hospitals, pharmacies makes the company attractive. Recently it has entered retail healthcare business with Apollo Clinics, Apollo Sugar, White Dental, Apollo Day Surgery centres, Apollo Cradle and Diagnostic segment through its subsidiary Apollo Health & Lifestyle Ltd (AHLL). In the recent past, company has delivered a healthy set of numbers and is expected to keep the momentum ahead on revenue and cost fronts. Going ahead, management is expected to follow a similar strategy of growth with an increased focus on consolidation of the existing hospitals and making new hospitals more profitable. All in all the overall narrative seems to be in-line with the margin expansion and ROCE improvement which is guided by the management at the early start of the year.
Key Drivers: Maturity of the older hospitals and rapid expansion strategy will keep the growth pace for Apollo at 12-13% per annum. However, be aware that this constant addition would pressurize the EBITDA margins. The aspect would not make any bigger difference as the company has already demonstrated its capabilities to handle and manage the balance between the expansion and bottom line. With the new hospitals under AHLL getting a shape we see decent growth in the healthcare business of the company at 11% CAGR over the next couple of years. Moreover, timely closure of non-performing businesses and the addition of new pharmacies aided the pharmacy business of the company. On the back of these new additions and ramp-up in the private label contribution, the companys healthcare business is expected to turn wealthier in the upcoming quarters.
Financial: Apollo Hospitals (APHS) reported decent Q2FY20 results. On the back of higher occupancy (~70% versus 65% in Q2FY19), revenues from the hospitals segment grew at 14% YoY whereas 17% YoY growth has been evident in new hospitals. With the seasonal change in the patient mix, the margins from this business also witnessed a marginal surge. AHLL turned profitable for the first time whereas pharmacy revenue grew at 22% YoY. On the regional level company has witnessed a volume surge in almost all the regions. Chennai the largest cluster seen a surge of 7% YoY in volumes which reflected in the revenues therefore the cluster delivered a steller 14% YoY revenue growth.
How to Find the Best Short-Term Shares?
Whenever you are contemplating stock investment, whether it's for short-term or long-term, you have to do a certain amount of research. There are aspects which ought to be touched upon in order to find a company worth investing. For a long-term view, you have to do an in-depth analysis of the company, its business, corporate governance, etc. However, if you have a short-term view, the process can be cut short considerably.
No Need For A Thorough Sectoral Analysis - In-depth sectoral analysis or the top-down economic analysis is not called for when you are looking for short-term stocks. The screeners are set to find the events which will have an impact on the price of the stock in the near future. These events can be anything like quarter earnings, conducive government's policies, a good order-book, optimistic management commentary for subsequent quarters, etc. These are some of the short-term triggers which have a marked influence on stock prices.
As gaining from short-term stocks needs high precision, it's a domain for experts. That's why its prudent to avail services of an advisory firm.
Niveza offers p3600 short term which give short-term value picks with thorough research and analysis. Not just that, you get timely updates of all the open calls along with precise entry and exit points.
Benefits of Buying Short-Term Shares
Like every other form of investment, short-term investment has its own set of pros and cons. From the quantum of returns to risk and reward equation, there are plenty of points on which short-term investment locks horns with the long-term investment. Let's take a point by point look at the pros and cons of going short.
Instant Gains - In the stock market, a whole lot depends on how you time the market. It's a daunting task to understand the constant mood swings of the market, but if you manage to enter a stock at the right time (when it has bottomed out) then you are in for instant gains. In many cases, a certain stock goes down consistently but once it bottoms out then there is a fair possibility for it to start its northward trend. Those who enter the stock at this level get immediate upside on their investment. Quick gains are one of the most enticing aspects of short-term stocks.
Research On The Merit Of Situation - The biggest stumbling block for doing a long-term investment is that one has to do a thorough research of all the financials of the company. In short-term investment, the analysts don't seek the clarity of too far ahead, their objective is to reap the maximum advantage of the short-term price movements. Such movements happen at the anticipation of good earnings, swelling order book or any substantial good news with respect to the company or corresponding sector. To gain from such movements of the stocks it's important to have perfect entry and exit points, only then one gets the optimum benefit of investing in short-term shares.
Disadvantages of Buying Short-Term Shares
The Palpable Threat Of Market Volatility - As we discussed above, volatility is just another name of stock investment. Short-term investors are amongst the people who stand to lose a lot in the market downturns. Investment in equity on a short-term basis always carries a certain risk. As the market cycles are extremely volatile, it can't be said with certainty that your investment strategy will come through as planned. This stands as one of the biggest disadvantages of short-term investment. In contrast to this, those who invest in the long-term stocks automatically discount the short-term hiccups which every stock goes through in its life cycle. There are some stocks which look very volatile in the short-term, but give excellent returns in long term.
Pay More Brokerage & Taxes -There are few investors who give a serious thought to equity brokerage they pay. They think it's a nominal amount that brokers deduct before delivering the stocks. Brokerage in India is extremely high, to add to it, there are plenty of taxes and cesses which are levied on every trade (buy & sell). Naturally, short-term investors and day traders have to pay more brokerage as they are constantly engaged in the buying-selling process. On the other hand, those who go long, and refrain from constant buying and selling of stocks, save a lot on brokerage, cess and taxes.
Risk Factor - When you are investing in stocks with a certain time frame in mind and target in mind it makes it easy to build your risk-reward profile. It simply means to have the math ready of how much you are willing to lose if you aiming for a certain profit. For example, if you are investing Rs.25,000, you can say if your profit target is 20% upside, to get that, you can bear the downside of 8%. It means your stop-loss would be placed at 8% below the buying price. If the stop-loss hits you can invest the same capital in other stock. This way your capital doesn't get stuck for a long time.
To know more about other short term investment options and plans read Best Short Term Investment Plans And Options For 2019. However, if you are looking for long term investment avenues then you can refer our scholarly article on Best Long-Term Investment Options And Plans In India.
