Mid-Cap Picks with Anil Singhvi: AIA Engineering, Jamna Auto and GIC Housing Finance are stocks to buy

The stock market held out strong on Wednesday and closed with strong gains. Notably, BSE Sensex jumped 355 points to close at 40616 today while NSE Nifty was up 95 points and ended the day at 11908.5. Market Analyst Sandeep Jain, while talking to Zee Business Managing Editor Anil Singhvi on the Special Mid-cap Picks show was as bullish as the wider markets and recommended AIA Engineering, Jamna Auto and GIC Housing Finance as his long-term, positional and short-term picks.  
 
Stocks to Buy: AIA (Ahmedabad Industrial Agencies) Engineering (Long term pick) 

#SPLMidcapStocks | शॉर्ट टर्म, पोजीशनल और लॉन्ग टर्म में किन मिडकैप शेयरों में बनेगा पैसा? मार्केट एनालिस्ट संदीप जैन से जानिए उनकी 3 दमदार मिडकैप PICK#ZBizBazaar #MidcapStocks @AnilSinghvi_ pic.twitter.com/am7gXjhBF5

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Sandeep Jain picked his long-term pick from Engineering space. He said he had picked this stock during the budget day as well. AIA Engineering is a strong quality company with FII’s holding 21% stake, DII’s holding 18% stake and promoters holding 58% stake. Retail participation is only 2.67%,  there is hardly any participation from retail investors in this stock. Promoters, DII’s and FII’s are all strong hands and they will not sell this kind of quality stock easily. Data and quarterly results indicate that this company is an extraordinary company which consistently is performing well and will give extraordinary returns going forward. Data of these company shows Return on Capital (RoC) is 18-19%, Return on Equity (RoE) is 15-16%, Dividend yield is 1.6%, Operating margin (OPM) is 26% and Net profit Margin (NPM) is 19%. The market cap of the company is around Rs 15000 cr to Rs 16000 cr. Even during this Covid situation, being in engineering sector, company delivered strong numbers in Q1 and Q2. To give such strong results during this kind of disruption phase, clearly indicates that one should hold such quality company in their portfolio for long term and forget about it. Sandeep said one should buy at current market price for target of Rs 1950.  

Stocks to Buy: Jamna Auto (Positional term) 

Sandeep Jain said he likes Jamna Auto from Auto Ancillary space; it is the largest manufacturer of Tapered Leaf and Parabolic Springs (holding 64% market share) in India and 3rd in world; they supply products to auto sector and OEMs (Original Equipment manufacturers). Sandeep said that he is extremely bullish on Auto Ancillary sector seeing strong numbers displayed by Auto sector. Auto ancillary sector has been underperforming for past 1.5 to 2 years. At current market price the stock is even more attractive than before. Goodwill, reputation and credibility of this company is extremely strong. This kind of Quality Company is currently available at extremely low valuations due to disruption in Q1. At current market price, downside is absolutely capped in this stock. Management of the company is extremely skillful and strong; they will definitely perform well during the good times. Sandeep said one should buy at current market price for target of Rs 53 to Rs 55. 

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Stocks to buy: GIC Housing Finance (Short term)

The way financials (NBFCs, Banks, Bank Nifty) have moved in past few sessions, it indicates technically this stock can do well. Downside is capped on this stock and fundaments are not attractive in this company due to disruption in the industry currently. However, HDFC, LIC Housing and Can Fin Homes in similar segment have performed extremely well, indicating that GIC Housing Finance will also participate strongly in this space. Sandeep Jain suggests to buy this stock with stop loss of Rs 98 and target of Rs 115.