(It has been a breakout year)

NEW DELHI: It has been a breakout year for the Indian markets with the Sensex and the Nifty both rallying over 30 per cent each so far in the year 2014.

After a strong rally seen so far in the year, analysts are convinced that the bull run is here to stay and the Indian markets will make record highs in the year 2015 as well, supported by revival in investment activity, bounce back in economic growth and further policy announcements by the Modi-led government.

Foreign investors have already affirmed their stance on the Indian markets, considering the fact that global money managers have already poured USD 16.5 billion into Indian stocks so far in the year 2014.

Riding on the momentum, many high value stocks have more than doubled so far this year — which brings us to our next question: Is it advisable to hold them or investors should rather book profits on rallies?

Analysts are of the view that some of these stocks are overvalued and booking profits would be the right strategy. Do not hold any stock based on rumor or speculation, warn analysts.

Investors should not hold any stock for long periods of time when we know that it is significantly overvalued. Many investors like to chase these stocks since they have generated huge returns in the last few quarters or years, says Dr. Vikas Gupta of Arthveda Fund Management Pvt Ltd.

This is a speculation on their continuing to perform fundamentally. While the probability of that is high too, the risk is very great if the lesser chances of them missing their fundamental expectations materialize. Then the result on the portfolio will be disastrous, he adds.

Investors can look at booking profits in logistic stocks as the government is on the planning stage to utilize huge infrastructure of the India Post for e-com logistics.

Investors should hold consumer stocks like Eicher, Nestle and MRF, says Siddharth Sedani, Vice President — Portfolio Management Service at Microsec Capital Ltd.

PSUs like Tide Water Oil, which has removed a lot of bottlenecks from its systems and is thriving for global business through its European and Middle East arm, may fetch better returns in future as valuations are still relatively inexpensive compared to companies like Castrol, he adds.

Sedani is of the view that companies like Bosch may still outperform as new technology innovations may bring better pricing power for the company.

We have collated recommendations from various analysts on the top ten high value stocks, which have rallied up to 200% so far in the year 2014:

MRF: Can book profits

MRF has posted strong quarterly results recently with operating margins increasing on the back of low raw material cost. Auto ancillary is expected to show strong growth going forward and much of this has been factored in the stock price already, says Kiran Kumar Kavikondala, Director & CEO, WealthRays

Securities.

Currently MRF’s P/E is seen at 18.55, which is higher than the industry P/E of 15.54. Investors can lighten their portfolio and can direct investment to its peers with better forward P/E, he adds.

Bosch: Can test 27000 mark in next 8-12 months

It has multiplied exponentially in five years i.e. from roughly 2800 to over 19500 levels and still there’s no sign of exhaustion. As per the projection technique, it can test the 27000 mark in the next 8-12 months, says Ajit Mishra, AVP — Equity Retail Research, Religare Securities Limited.

Tide Water Oil India Ltd: Accumulate the stock and retain in your portfolio

The stock at current price is trading at 9.59 P/E, with FY15E P/E of 16.3. Therefore accumulate decision is recommended. The stock can be retained in portfolio, the company has been expanding its global footprint and has strong operating margins, says Kavikondala of WealthRays Securities.

Eicher Motors: Maintain your long positions

The stock has been outperforming majority of its peer in the auto segment and steadily marching northward with every passing day. So, maintain your long positions, says Mishra of Religare Securities Ltd.

Page Industries Ltd: Valuations look slightly stretched

The company has performed well in Q2, but much of it has been factored in and valuations are slightly stretched, says Kiran Kumar Kavikondala, Director & CEO, WealthRays Securities.

Investors may trim their position and move into other stocks. With the current price of the stock FY15E P/E is expected at 51.95, which is lower than current P/E of 68.18, he adds.

Shree Cements Ltd: Can test Rs 14000 mark in coming months

Though the majority of cement counters are in a consolidation phase, it’s gradually inching upward. It can test the 14000 mark in the coming months, says Mishra of Religare Securities Limited.

Honeywell Auto: Hold the stock for further gains