20 Big Little Stocks: Here are 5 investment ideas for 2020 from Edelweiss Investment Research's Vinay Khattar

Today, market has punished everybody who was on corporate banking. At some point, corporate India is going to come back. Corporate lending will no longer be a bad word and people with substantial exposure to corporate books will not get the kind of beating that they have got which means rerating of the complete stock per se. So, to my mind, if I were to look at from the upside point of view on the relatively safe corporate banking side bets, then Axis Bank could be a very interesting one.

Almost all the top brands like Louis Philippe, Van Heusen, Allen Solly and Peter England belong to Aditya Birla Fashion. What the company has been doing in past 2-3 years is very interesting. Acquisition of Pantaloons, relatively inefficient business, 2.2 percent EBITDA margin and taking it up to 7 percent in just three years. Getting into innerwear space and Rs 500 crore of topline just in three years. Page Industries took 10 years to do Rs 100 crore. So, a very interesting bet in terms of overall size, scale and position in the market.

Our broad call is on commodities. We believe that a bull cycle in commodities is beginning to play out. The global balance sheet across most of the developed world has expanded dramatically over the last 3-4 years. But if you look at the commodity index, the Bloomberg Commodity Index is at a level where it was in 2001. So, approximately 18-19 years of time has got zero as far as the prices in commodities go. So, a commodity upcycle is probably beginning to play out especially when you look at the PMI data emerging from Europe where you see a clear pickup. So, demand picking up and a lot of liquidity sloshing in the system. So the impact is that commodities will do well and steel will be one of the big beneficiaries and JSW Steel is the most efficient producer of steel in India.

It is an ethanol play, blended with sugar. Sugar crops globally are coming down. Over the next 1-2 years, the deficit which was expected to be just about 4 million tonne is going to be as high as 6 million tonne globally. That means the prices around the world are going to stay pretty firm, which will then provide additional impetus to India. On the Indian side, the way the sugar sector has been seen has been very volatile, and at the down cycle EBITDA is just go away and the companies become loss-making. The way sugar is been handled and the way ethanol has been handled, I think that is going to be passé. Within the sector, Balrampur Chini is the most dominant player and if the sector gets re-rated you could have significant upside even from the current prices for a company like Balrampur Chini.