Five stocks priced below Rs 500 you can clinch

Investors on Dalal Street have received humungous returns on their investments in the past one year. Some 675 stocks, which are trading below Rs 500, have climbed over 100% since April last year. With a rally of 1,330%, Subex emerged as the top gainer in the list. The company’s scrip has jumped 1,330% to Rs 55.20 on April 26 from Rs 3.86 on April 27, 2020.

On the other hand, the benchmark BSE Sensex has gained 52% during the same period. According to market analysts, sustained inflows by foreign institutional investors, coupled with liquidity measures taken by RBI and the government, aided the domestic equity market despite rising uncertainty due to the Covid-19 pandemic.

Other top gainers

Investors of Hexa Tradex, RRIL, Standard Batteries, Bihar Sponge, Jaykay Enterprises and Garware Synthetics also received over 1,000% return on their investment. A return of 1,000% means that an investment of Rs 10,000 has turned in to Rs 1,00,000 in just 12 months.

Everest Kanto Cylinders ( up 823%), CG Power (up 724%), Xpro India (up 640%), Borosil Renewables (up 541%), Magma Fincorp (up 529%) and Jindal Steel and Power (up 437%) stood among other leaders in the list. Overall, there are around 1,950 stocks that are trading below Rs 500 on the BSE.

Stocks to buy

IDFC First Bank
Angel Broking is positive on the company with a price target of Rs 77. The brokerage believes efforts to build a liability franchise, fresh capital infusion and provision taken on the wholesale book will help to tide over this difficult time. The IDFC First Bank is also trading at a significant discount to historical average valuations.

NRB Bearings
Angel Broking sees over 40% upside in NRB Bearings with a price target of Rs 150. “NRB is one of the leading suppliers of bearings to auto companies. The company supplies bearings to two-wheelers, PV, CV, three-wheelers and tractors OEMs and has a wide customer base. The company has also been focusing on exports markets in order to diversify its revenue base,” the brokerage said.

Federal Bank
Federal Bank is one of India’s largest old generation private sector banks with total assets of Rs 1.9 lakh crore with deposits of Rs 1.56 lakh crore and a loan book of Rs 1.2 lakh crore in FY21. NPA’s have remained steady for the bank over the past few years with gross non-performing assets for Q3FY21 at 3.38% while the NNPA ratio stood at 1.14%. Angel Broking has a target price of Rs 110 for Federal Bank.

Ashok Leyland
The brokerage has set a target price of Rs 145 for Ashok Land. “We believe that the company is ideally placed to capture the growth revival in the commercial vehicle segment and will be the biggest beneficiary of the government’s voluntary scrappage policy,” it said.

ITC
Global financial services firm CLSA is positive on ITC with a price target of Rs 275. “In a Covid-19 induced setting, the legal cigarettle industry saw sharp volume compression in FY21. On a low base, there was the expectation of a volume recovery in FY22, but the reintroduction of Covid-19 related restrictions are likely to delay recovery. As lockdowns curbs are severe for urban centres, we expect this to lead to margin pressure from a negative mix. Our Buy call factors in a K-shaped recovery in other FMCG segments,” CLSA said.