Rupee at 8-month low; here are 10 stocks that could benefit from the fall in INR
Short Term Investments Vs. Rupee Devaluation
Rupee devaluation was always the main concern among investors. But this time when it has touched its new low, at least some of the investors are looking happy. Indian Rupee is trading at its lowest since Dec last year, but on August 23, It opened even lower shaking the market. When things doesn’t go as planned, Move to the Short Term Investments.
Indian Rupee opened lower by 10 paise at RS. 71.91 per dollar, closed on Rs. 71.81.
Domestic currency INR looks set to fall even further this month. August has witnessed Ruppee’s biggest devaluation in six years, down 4.6 per cent and 3.1 per cent in 2019.
It’s not like only our currency is showing weakness to the world market, But last week Chinese Yuan also disappointed the investors. Though because of the Chinese yuan fall, the Indian rupee is under huge pressure. According to Reuters, the Yuan has slumped to an 11-year low.
India and China both are an export intensive industry that’s the reason why both the economies are feeling the heat at the same time.
A lame rupee is not a good sign for the stock market as it indicates that foreign investors might exit their positions by becoming bearish. At a time like this when the market and domestic Investors have a lot to worry in terms of the Kashmir, FPI taxation policy, Trade War, Weakening economy, Shaking Policies, Lame financial Institutions the devaluation in rupee can only make the situation worse.
However this time when the rupee has touched its new low, there are few stocks/sector which is going to get benefited. Despite the huge devaluation Pharma and IT figure prominently among them.
Here are the best 10 Short Term Investments stocks to buy now which are likely to gain from the rupee devaluation:
The stock is already one high bet share because of the company’s consistent performance and growth sharing, strong management. Positive sector outlook and stable long term growth prospects are the two most important factors which looks much better at this time.
Though the company has few near term challenges, it is good for the long term. It remains one best bet at this when the rupee is backing its negative trend.
Tata Consultancy Services:
TCS is the largest IT company, offering its services to a wide range of industries like BFSI, manufacturing, telecom, transportation, insurance, retail etc.
At this time, It has over 4.2 lakh consultants present in more than 50 countries. Talking about it’s business & revenue, 51% of its business comes from North America.
As the company’s most of the revenue comes from outside with the rupee devaluation demand will trigger. Company’ strong & huge clientele base will surely benefit its strong position in the IT space.
Wipro will be another IT firm which will be one huge beneficiary of falling rupee as it means higher dollar earning for the firm.
Though You can not tell the exact impact but based on the company’s hedging policy this will surely work positively. Besides the rupee fall, the firm’s business fundamentals are also very strong to invest in it.
Here also experts believe that in the near term, the firm has to face few challenges. But as there is a weakness on multiple fronts whether its global or domestic firm is in huge benefit.
Wipro’s digital business is doing awesomely. This will benefit the firm more than expected. This one looks best for Short term Investment option.
Experts believe due to its nil foreign debt Divi’s Labs share is going to strongly benefit from this rupee devaluation.
It generates more than 70 per cent of the revenue in foreign exchange. This devaluation will trigger higher sales and margins as Divi’s Labs is a net exporter.
Recently Sun Pharma got a benefit of more than Rs. 76 crores due to its increased foreign transaction as against a loss of Rs. 90 crore in 2018.
Though the company has foreign exchange debt of Lil more than Rs. 6,400 crores but due to its huge exposure to foreign market this figure is manageable. It generates more than 60-65 per cent of its revenue in foreign transactions.
Apart from the rupee devaluation, Firm’s EBITDA also looks better than the last time we had examined it. EBITDA has grown at 24.2 per cent to Rs. 1,996 crores while its margin expanded 166bps Year-on-Year.
All these factors are going to benefit the firm. Short Term Investments might be little risky but not at this time when the market is already behaving negatively.
The company works better in application development and maintenance, business and knowledge process outsourcing, infrastructure outsourcing etc. Due to its huge foreign exposure, Mphasis will benefit from this fall.
Apart from this improvement in its margins, momentum in deal wins, decent revenue are also a few factors which will benefit the firm hugely.
Biocon is one of the largest and fully integrated biopharmaceutical company, which has already expanded its business globally. With the presence in over 120 countries, it has huge exposure to sales in the international market. Huge base of clients and almost nil foreign exchange debt will help the firm to grow even faster.
I also believe that Biocon is going to get benefited hugely with the first wave of biosimilar commercialization in the next two years. This will surely drive huge sales and revenue to the firm.
This huge tyre manufacturer looks much better than expected at this time. This has a very strong and healthy fundamental profile and due to its huge global presence, this fall will benefit it hugely.
It captures more than 6% of the market share in the off-highway Tyre industry.
This is our second last stock which will surely benefit from this rupee devaluation. Due to its huge revenue generation from the international market, this will surely return you handsomely in the future.
It generates more than 60 per cent of the revenue from international exports.
Indo Count Industries:
Indo Count share also looks very handsome at this time. It exports to more than 55 countries across the globe that’s why it stands to benefit most from these currency fluctuations.
Huge foreign exposure and low level of foreign transaction debt will benefit the investors handsomely in the future.
All these were Short Term Investments options, so You can choose any Stocks.
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Disclaimer: The views and investment tips expressed by analysts on Moneycompulsion.com are their own and not that of the website or its management. Moneycompulsion.com advises users to check with certified experts before taking any investment decisions.