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Tango & Clash at the Dalal Street

The investors are perplexed as usual specially since the recent falling of the sensex and so also nifty but still they have few reasons to rejoice just by shifting their focus on another set of numbers with greater interest in the coming months and this decade especially for the combined market cap of various companies in various sectors in construction, cement, housing finance, consumer electronics, electrical and infra.

 Even more so the combined value of these companies is about almost ten times the combined net profit of the nifty for this year end march 2015 and the very simple reason why this is creating some tremors because the green signal is given by the government of India to make way to build the 100 smart cities. If we just figure out the manner in which the spending will be boosted both by the government as well as the local bodies will benefit the above mentioned sectors in terms of higher sales and boosted earnings. The valuations of these companies have become affordable in this current ongoing stock market slide. So the major beneficiaries amongst these due to the drive of the 100 smart cities will be the Granite, Ply and the ceramics the prominent ones are the HSIL, Kajaria ceramics and the cera sanitary ware inspite of the slump in the reality the demand is obviously expected to be strong one the project of the smart cities takes off the runway.

After this the expectation are too high from the housing finance in which the falling interest rates will also help in pushing the demands and the one who will make the most out of it is NBFC, Indiabulls Housing LIC Housing and GRUH Finance Ltd. Next sector not to missed is the cement sector because the new construction drive will definitely boost up the demand after almost a two year lull so much so that the growth in the volume as well as foster the pricing power too enticing the higher profitability and the companies to be watched are Shree cement, Ultra Tech and the Ambhuja cement.

 The next in the line is the electrical equipment manufacturing companies with a steep rise in the demand for the multiple electrical products like the bulbs and the fans, lights, cables and switch gears and related appliances and the companies to be watched are Bajaj Electricals, Havells India and the Crompton Greaves. Last but not the least is the paints which are headed to grow at twice the speed of the GDP and the companies to be watched keenly are Kansai Nerolec Paints, Asian Paints and the Berger Paints. 

Although the stocks in some of these companies may be cheap or fairly valued the steady growth will justify the valuations or it would be more correct that a boom will keep the volume growth robust to justify the valuations eventually.