Such China Challenger Stocks are STILL Ignored and Undervalued

Mar 2, 2021

The tanks have started receding.

The armed forces are dismantling their tents and bunkers. They are preparing to head back to less treacherous terrain.

Indian and Chinese forces recently announced disengagement after almost ten months of standoff.

The clashes in Eastern Ladakh, on either side of the Pangong Lake, first occurred in May 2020.

Since then, India has used every opportunity, economic, military, and foreign policy to challenge the Chinese.

But the real challenger has been procurement of defence technology. At the center of India's Atmanirbhar plan is indigenous defence production.

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As promised, India's armed forces have placed orders in thousands of crores with domestic producers.

They have not shied away from even engaging startups for cutting edge research on drone technology.

Indian defence manufacturing has a very long runway ahead of it.

But the hidden opportunity here is in the high seas.

The Indian Ocean holds critical importance in the India-China relationship. Along the Line of Actual Control (LAC) in the Himalayas, India does not hold a strategic advantage to China.

But in the Indian Ocean, which includes China's vital energy routes from the Persian Gulf and Africa, India does have the upper hand.

This will be true as long as we exploit our east coast for military and economic initiatives.

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Building high-capacity dredgers and shipyards gives Indian companies a pivotal role in the high seas of the Indian ocean.

There are Indian companies that are capable of completing such big projects.

What's more, these stocks in the market have so far been ignored.

In other words, they're undervalued.

One such StockSelect recommendation of mine is up 10% in the past month.

But please don't mistake defence stocks to be the only China challengers.

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There are several others into electronics manufacturing, pharma API (bulk drugs), ecommerce, chemicals, and even real estate.

Apple's iPhone factory is just one indication of the kind of China challenger businesses India is going to see over next few years.

The opportunities today will be dwarfed by the opportunities in the future... and I'm keep a close watch on this space.

What's important to know is that several such businesses are still ignored and undervalued.

Many are seeing their return ratios move into higher orbits.

Stay tuned for more on these stocks...

Warm regards,

Tanushree Banerjee
Tanushree Banerjee
Editor, StockSelect
Equitymaster Agora Research Private Limited (Research Analyst)

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2 Responses to "Such China Challenger Stocks are STILL Ignored and Undervalued"

Dr. S. P. Agarwal

Mar 9, 2021

Team Equitymaster
Your research is unmatched to any other competitor in the market. I am and will be part of the Equitymaster family always and ever.

On a specific note, is there a specific reason of not recommending PSU stocks that were announced for divestment in Budget 2021?

Looking forward to an early response.
Thanks.

Like (1)

Manohar

Mar 2, 2021

Hi Tanushree,

I have been a subscriber to equitymaster for over one year and your ability to sift through the noise and present targeted insights is fascinating. No wonder, those who follow your thoroughly researched advice will benefit immensely.

Look forward to more insights on this front.

Regards

Like (1)
  
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