Investment tips for May: Two stocks held by Rakesh Jhunjhunwala seen as multibaggers; see what experts say

The May month on Dalal Street kicked off on a positive note. The benchmark Sensex index touched an intraday high of 39,189.95, however, was trading at 39,086.56 up by 55.01 or 0.14% at around 1431 hours. Similarly, Nifty 50 was trading at 11,754.85 slightly higher by 6.70 points or 0.06%. Gainers list on Sensex was led by Yes Bank, Kotak Mahindra Bank, Power Grid, Hero Motocorp, Bharti Airtel, HDFC, HDFC Bank, Bajaj Finance and Bajaj Auto. Now that the current month has begun promising for investors, the real question is which stock can help add more money in their kitty. Interestingly, there are two stocks on which analysts are quite upbeat, and believe will rise further ahead. These two are seen to make big bull Rakesh Jhunjhunwala richer in near term. Notably, Jhunjhunwala has in fact also increased his holding in one of them during Q4FY19. Here’s what you must know!

Dewan Housing Finance Corp Ltd (DHFL):

Sameer Kalra, Equity Research Analyst & Founder Target Investing said, "Company was able to pay interest on principal of Rs. 838cr to NCD holders which is short term positive though we are Negative on the company but this would create an intraday bounce."

Kalra has given a target price of between Rs 142 to Rs 156.

Currently, DHFL shares trade at Rs 136.05 up by 0.96% on BSE. However, the company has already touched an intraday high and low of Rs 142 and Rs 130.30 per piece respectively. Hence, one can fetch this stock for short term gains. 

During Q4FY19, DHFL was the second stock were Jhunjhunwala increased his holding most by 0.73%, after VIP Industries. Now the ace investor holds 3.19% stake in DHFL with 10,000,000 shares worth Rs 138.6 crore. 

MCX:

According to Ashika Stock Broking, MCX has strong moat and thus faces minimal threat in the commodity business from competitors. Despite the launch of commodity derivatives by BSE and NSE in October 2018, both exchanges have failed to generate enough volumes to topple MCX from the top. On the contrary, MCX has improved market share in FY19 and retained its market leadership position with share at 91.6% (89.58% in FY18). 

MCX’s Q4FY19 average daily traded value (ADTV) has been higher by 1.4% QoQ and 13.3% YoY at Rs 26,981 crore, the highest in 5 years. This signal continued recovery from the lows of Q1FY18 and led by uptrend in bullion (up 28% YoY, driven by volumes) and energy (up 28% YoY, driven by high crude prices). 

Also, Aashika highlights that, MCX Q4FY19 numbers came broadly in line with consensus estimates except net profitability which came ahead of estimate on account of one-time tax reversal. Revenue during the quarter grew by 2.9% QoQ at Rs 79.1 crore, led by 1.4% QoQ increase in volume and 0.5% increase in realizations. Volume growth during FY19 recovered strongly by growing 22.5% vs decline of 6.5% in FY18.

Hence, the analysts at Aashika said, “ we hold a positive view on the stock and recommend our investors to BUY the scrip with target of Rs. 1,005 from 12-18 months investment perspective. Currently, the scrip is valued at P/E multiple of 26x on FY20E Bloomberg consensus EPS of Rs 33.0.”

At present, the MCX share price was trading at Rs 856.80 per piece muted compared to previous trading session on Sensex. The company has however touched an intraday high and low of Rs 876 and Rs 848 per piece respectively. 

In MCX, Jhunjhunwala holds 3.92% stake with 2,000,000 shares worth Rs 175 crore.