Hunting for value in volatile market? Here are 18 stocks which are a buy

Indian market has seen steep fall in the past month. Both Sensex and Nifty suffered losses in low teens and the carnage was also visible in individual stocks, especially in the small & mid-cap space.

Stocks in the large-cap space corrected but the fall was not as steep as in the mid & small-cap stocks. After the recent correction, investors are out with their shopping bags as most stocks are now available at a steep discount.

But, are all stocks quality buys? Maybe not. Investors should use quality parameters in shortlisting stocks after the recent correction, suggest experts.

Extending the analysis to BSE 200 (ex. Financials), Elara Capital highlights that the percentage of stocks with P/E of less than 15 has increased from 25.5 percent to 30.9 percent and stocks in PE band of 15-25 increased from 27.7 percent to 29.8 percent.

“Value in Quality” stocks

To identify value in the quality stock universe, Elara Capital has overlaid additional filters. The ‘value in quality’ stocks have FY18-20 earnings growth expectations in excess of their cost of equity, and also meet 3 or more of the criteria mentioned below:

a) Current forward PE is less than 5-year average PE
b) Current LTGV is less than 5-year average LTGV
c) The price correction is in excess of 15% and recent consensus FY20 EPS revisions are positive or flat (non-negative)
d) Current stock price is at the bottom half of the 5-year price range

e) Current LTGV is at the bottom half of 5-year LTGV range

Here is a list of 18 stocks which satisfy the above criteria. The list includes Maruti Suzuki, Eicher Motors, Sun TV, Endurance Tech, Whirlpool, Wabco, Solar Ind., SKF, Mahanagar Gas, Dr. LalPathlabs, Tata Elxsi, Bajaj Corp, Monsanto, Timken, VST Inds, ICRA, JagranPrakashan, and CCL Products.

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