Multibagger moves over in defence, railways stocks; next few years could see steady returns: Sandip Sabharwal

economictimes.indiatimes.com:

Sandip Sabharwal, asksandipsabharwal.com, says “the re-rating potential is low now in defence and railways stocks. Now it is on earnings growth and in many of these companies, earnings growth will take these stocks forward and that is how people have to play it. So, the multibagger moves could be over. Now, the next few years could be of steady returns.


What didyour Diwali Muhurat list look like?
There are a lot of companies we can play for. On the contrarian side, companies like Aditya Birla Retail which have gone through a very tough period over the last one year and fallen from Rs 352 to Rs 220 could be interesting from here on because as inflation ebbs and there is a turnaround normally, apparently the first segment which bounces back. So, from a contrarian perspective, I would play Aditya Birla Retail.

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From a company's perspective which could grow very aggressively over the next two years and has significant re-rating potential, is VA Tech Wabag which has been doing very well in terms of profitability, growth, margin improvement, cash flow generation and the balance sheet is now totally cleaned up and debt free. This year, it will be around Rs 45 EPS, next year could be nearer Rs 60. The stock is still at around Rs 550. This is one stock which should get significantly re-rated and I would not be surprised if it goes to four digits.

Is it true that the rural India which everyone thought was subdued, has come out of the shell this Diwali? Are we in for a positive