Budget 2020 MyPick: Amber Enterprises offers the opportunity to earn bumper returns before the budget

Speculation over Budget 2020 (#BUDGET2020ZEE) is rife in the market and experts are advising to invest in stocks that could directly benefit from the budget, which is slated to be presented on 1 February 2020. Anand Rathi Securities' Siddharth Sedani has recommended Amber Enterprises as a viable investment option, suggesting that the stock could give high returns before the budget (#BUDGET2020ZEE).

Amber Enterprises is an excellent Midcap Index company and is most suitable for investments during the period before the budget (#BUDGET2020ZEE), Sedani said. He said that the midcap index may see a lot of activity and there is a lot of traction for such stocks.

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The company is into the business of contract manufacturing and has a large market share in the air conditioner contract manufacturing segment, he said.

Amber Enterprises may see between 23% and 25% growth in the company's profits during this period, he added.
 
Amber Enterprises gets orders from all major companies like Samsung, Panasonic, Voltas, and LG, which could give a further boost to its profits, going forward, he said.

The Gurgaon-headquartered company is also likely to benefit from the ongoing metro construction works in 15-16 cities, he said. The share closed at 1209.65, up 2% on BSE from the previous close.

Anand Rathi puts the Target Price for the stock at 1630 rupees.

Finance Minister Nirmala Sitharaman will be presenting the second budget of the Modi 2.0 government and the market is expecting some big-ticket announcements from her. The budget is likely to have a positive impact on Midcap stocks. The markets have seen a seemingly worrying trend for such stocks to be reversing since the beginning of 2020 on the back of rallying trends in US, Japanese and European markets. Data suggests that domestic mid-cap stocks enjoy a positive correlation with their peers.  

It is being said by many stock market experts to align their longterm portfolios with considerable weightage to the mid-cap stocks to benefit with the changing market dynamics.

The mid-cap index has been at the receiving end delivering negative returns in the last couple of years.