Which Stocks Can Be Considered Bargain Buys in the Current Condition of the Indian Stock Market?

Investors often seek out 'bargain buys' in the stock market, especially during periods of market correction. Two stocks, Mahanagar Gas Ltd and Hindustan Construction Company (HCC), stand out as potential buys due to their promising fundamentals and valuation.

Mahanagar Gas Ltd: A Debt-Free Dividend-Packing Gem

Mahanagar Gas Ltd (MGL) is a city gas distributor, currently supplying natural gas to Mumbai and the Raigad District in Maharashtra. This company presents a compelling investment opportunity for several reasons:

Debt-Free Operation: MGL operates with almost no debt, which is a significant advantage in a volatile market. Healthy Dividends: The company has managed to maintain a consistent dividend payout of 38.8%, providing a steady income stream for shareholders. Positive Sentiment: Analysts predict that MGL will provide a good quarter, with its intrinsic value estimated to be higher than the current market price. Equity Returns: MGL outperforms bank fixed deposits (FDs) in terms of return on equity, offering a potentially higher yield. Right Time to Invest: Currently, the stock is not in an oversold zone, making it a suitable buy during dips in the market.

Note: It is always advisable to consult a financial advisor before making any significant investment decisions.

Hindustan Construction Company (HCC): A Turnaround Story

Hindustan Construction Company (HCC) is a strong contender for investment in the infrastructure sector. Despite carrying a significant debt load of around Rs 4 K crores, HCC is on a path to recovery, as evidenced by:

Positive Debt Reduction: The company is gradually reducing its debt, with profit margins improving in the December-17 quarter by approximately 500%. New Milestones: Recently, HCC won a major contract worth Rs 484 crores for the Pune metro project. Recognition: An article from Moneycontrol highlights HCC as a promising candidate for a turnaround in the infrastructure sector. Undervalued: The stock is trading slightly above its 52-week low, providing a potentially low-risk investment opportunity.

Note: The author holds this stock in their portfolio. It is important to perform your own thorough research before making investment decisions.

Investment Insights Considerations

It's essential to adopt a balanced approach when evaluating stocks. A notable investor once advised focusing on the intrinsic value of the company rather than the current stock price. If a company's fundamentals are strong, it can provide returns over the long term.

While MGL and HCC present attractive opportunities, it's crucial to consider individual risk tolerance, investment goals, and the broader economic environment before making any investment choices.

Invest with care and make informed decisions. Happy investing!

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