Housing finance companies, which were among the fastest-growing in the last few quarters, are perceived to be impacted by the demonetisation.
Earnings growth of several Indian companies has been stunted in the last many quarters but a few of them have managed to buck this trend. Out of the companies on the BSE-500 index, 25 have reported consistent double-digit growth in both revenue and profits during the past six quarters.
These include Force Motors, GIC Housing, Ajanta Pharma, Power Grid Corp, Bharat Financials, HDFC Bank, Cera Sanitary and Syngene International, among others. But, following the demonetisation scheme, many of these companies in the list could be impacted temporarily.
Analysts suggest investors could buy some of these stocks in case they fall about 15-20% further.
All consumer-oriented companies to be impacted in the short term because of demonetisation. However, all those companies that have grown consistently despite slowdown in the past are going to outperform their peers in the future though there may some decline in the growth rate” Daljit Kohli, head of research, IndiaNivesh Securities
Housing finance companies, which were among the fastest-growing in the last few quarters, are perceived to be impacted by the demonetisation. Many of these stocks have already fallen over 15% in the last week or so.
Analysts are bullish on Force Motors as they feel the company will benefit from higher volumes and operating leverage of automotive business.
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"We believe Force Motors is poised to gain from the niche positioning of Traveller and expect the tractor volumes to also pick up given the rural pick-up,"Abhishek Jain, HDFC Securities
Analysts maintain banking will be the other sector that would emerge strong out of the confusion surrounding demonetisation
Lower spreads on money parked in investments and higher administrative cost of demonetisation are likely to be more than compensated by strong trading gains in the investment portfolio Gautam Duggad, Motilal Oswal
