The Union Budget is now behind us and the markets have given the Finance Minister a thumbs up.
The market seems to have heaved a huge sigh of relief and has reacted with a bout of short covering. This reaction perfectly normal as there were many concerns before the budget, like an increase in capital gains tax, that have not come to pass.
While the budget speech did not have much for the market specifically, it did have something positive for smallcaps. It can be summed up in one word: formalisation.
The government is clear in its intention to formalise the economy. This means shifting the massive informal sector (as well as the parallel cash based economy) into the formal sector.
This means higher tax revenues for the government, better regulation, and financial inclusion of micro, small and medium enterprises.
This trend is now playing out right before our eyes.
With the government's relentless push to making India a digital economy and improve tax compliance, the stage is set for a migration of value from small unorganised firms to organised listed smallcaps on a historic scale.
I can assure you that nothing of this sort has happened in India before. There will be huge disruption in the informal sector.
However, this will also create big winners in the smallcap space. All you need to do is identify them, buy them at the right price, and hold for the long term.
At this point, we would like to update subscribers about all open positions in the Hidden Treasure service.
Page Industries - We maintain our Hold view and target price of Rs 17,377
eClerx Services - We maintain our Buy view and target price of Rs 1,871. The maximum buy price for the stock is Rs 1,500. Please note, the stock makes it to our list of 'Top Stocks to Consider Buying'.
Savita Oil Technologies - The stock has surged recently and breached our target price of Rs 850. We are putting the target price under review until we revise our financial estimates. However, we maintain our Hold view on the stock.
Kolte Patil Developers - The budget has provided a sentiment boost for the stock as the Finance Minister finally accepted the real estate industry's long standing demand of giving Infrastructure status to the affordable housing sector. The Budget also reduced from three years to two years the holding period of immovable property for calculation of long term capital gains.
We maintain our Buy view on the stock. We will revise target price after updating the financial estimates for the company. Please note the stock is not a part of our 'Top Stocks to Consider Buying' list.
Indoco Remedies - We maintain our Hold view and target price of Rs 389
Orbit Exports - We maintain our Hold view and target price of Rs 530.
Navneet Education - We maintain our Hold view and target price of Rs 153.
Mayur Uniquoters - We maintain our Buy view and target price of Rs 600. The maximum buy price is Rs 450. Please note the stock is a part of our 'Top Stocks to Consider Buying' list.
Fluidomat - We maintain our Buy view. The target price is under review. The maximum buy price is Rs 260. Please note the stock is not a part of our 'Top Stocks to Consider Buying' list.
Infinite Computer - We maintain our Hold view and target price of Rs 423. However, as we have stated before, given the riskier nature of the business, only those subscribers who have a high risk appetite could consider continuing to hold on to the stock. Further, we recommend subscribers could consider not buying any more shares of the company. Those subscribers who have a lower risk appetite and who may not be comfortable with either the volatility in the stock price or the riskiness in the company's business model, could consider exiting the stock.
Gulshan Polyols - We maintain our Hold view and target price of Rs 100.
Ambika Cotton - We maintain our Buy view and target price of Rs 1,420. The maximum buy price is Rs 1,090. Please note the stock is not a part of our 'Top Stocks to Consider Buying' list.
Vinati Organics - The stock has surged recently and breached our target price of Rs 740. We are putting the target price under review until we revise our financial estimates. However, we maintain our Hold view on the stock.
Sintex Industries - We maintain our Buy view. The target price is under review. Please note the stock is not a part of our 'Top Stocks to Consider Buying' list.
HMVL - We maintain our Buy view and target price of Rs 496. The maximum buy price is Rs 300. Please note the stock is a part of our 'Top Stocks to Consider Buying' list.
Mold-Tek Packaging - The maximum buy price for the stock is Rs 210 and the target price of Rs 290.
Cyient - We maintain our Buy view and target price of Rs 719. The maximum buy price is Rs 500. Please note the stock is not a part of our 'Top Stocks to Consider Buying' list.
Sonata Software - We maintain our Hold view and target price of Rs 227.
GMDC - The stock is currently trading above our maximum buy price of Rs 105. Thus, we change our view to Hold. Our target price is Rs 145.
Persistent Systems - We maintain our Buy view and target price of Rs 934. The maximum buy price of Rs 650. Please note the stock is not a part of our 'Top Stocks to Consider Buying' list.
Sanghvi Movers - We maintain our Buy view and target price of Rs 380. The maximum buy price of Rs 240. Please note the stock is not a part of our 'Top Stocks to Consider Buying' list.
Cosmo Films - We maintain our Buy view and target price of Rs 530. The maximum buy price of Rs 375. Please note the stock is not a part of our 'Top Stocks to Consider Buying' list.
Please note that only three stocks make it to our list of 'Top Stocks to Consider Buying'. They are -
- Mayur Uniquoters
- eClerx Services
- Hindustan Media Ventures Ltd (HMVL)
Disclaimer
Disclaimer : All information given here is for information purpose only. Users are advised to rely on their own judgement or investment advisor when making investment decisions. This blog is not liable and take no responsibility for any loss or profit arising out of such decisions being made by anyone acting on such advice.
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