Stocks to buy: Domestic brokerage and research firm Angel One, while sharing their top picks, recommends five stocks that investors can look to buy or accumulate these quality stocks with a time horizon of one year.
five stocks to buy
Ashok Leyland
Ashok Leyland Submit: CMP: Rs 143| Target: Rs 164
Demand for MHCV was adversely impacted, including change in axle norms due to several factors, increase in prices due to implementation of BS6 norms and a sharp fall in demand due to the ongoing COVID-19 crisis. Despite the challenges, the CV segment has held up well in the current year and demand is expected to pick up in the medium term on the back of improving business sentiments along with spending on infrastructure. The bus segment is also likely to grow further due to improved activities for the end users. FY21 MHCV industry production volumes have been at the lowest level witnessed in 12 years and we believe that the company is ideally poised to capture the revival of growth in the CV segment.
The brokerage house said: “We believe that all will be the biggest beneficiary of the government’s voluntary scrappage policy and therefore buy the stock.”
federal bank
Buy Federal Bank: CMP: Rs 98| Target: Rs 120
Federal Bank is one of the largest old generation private sector banks in India. At the end of Q4 FY2022 the bank had Rs. 1.45 lakh crore and deposits of Rs. The 1.81 lakh crore bank primarily has a secure lending book which helped limit asset quality issues during the COVID 19 pandemic. Federal Bank has posted a good set of numbers for Q4FY22 as NII/Advances grew by 7.4 per cent/9.9 per cent. Provisioning for the quarter had decreased by 10 per cent y-o-y resulting in an increase of 13.1 per cent y-o-y in PAT. The GNPA and NNPA ratio improved to 2.80 per cent and 0.96 per cent, while restructuring advances remained stable at 2.6 per cent, respectively. The overall asset quality for the quarter improved in Q4FY22 which was in line with our expectations.
Angel One says, “We expect asset quality to improve further in FY2023, given the normalization of the economy. We expect Federal Bank to post NII/PPOP/PAT CAGR of 24.9 per cent/29.1 per cent/42.7 per cent between FY 2022-24 and remain positive on the bank.
HDFC bank
HDFC Bank Buy: CMP: Rs 1,392| Target: Rs 1,610
HDFC Bank is the largest private sector bank in India with a loan book of Rs. 13.68 lakh crore in Q4FY2022 and a deposit base of Rs. 15.6 lakh crore. The bank has a very well spread book with wholesale accounting for 57 per cent of the asset book, while retail accounts for the remaining 44 per cent of the loan book. Q4FY2022 numbers were lower than expected due to change in portfolio mix towards corporate, resulting in contraction in NIM by 10bps QoQ to 4.0 per cent. Also higher OPEX dragged down PPOP growth. The bank reported a growth of 10.2 per cent/5.3 per cent in NII/PPOP for the quarter, driven by credit growth of 20.8 per cent year-on-year. While the operating numbers were lower than expected, the bank posted an improvement in asset quality as GNPA/NNPA declined by 9/5 bps QoQ to 1.17 per cent and advances to 0.32 per cent. Restructured advances accounted for 1.14 per cent of advances at the end of the quarter.
“Given the best asset quality, expected rebound in retail loan growth, we are positive on the bank, given a fair valuation at 2.3xFY24 adjusted book which is discounted from the historical average,” it said.
Sobha Limited
Sanchit Shobha Limited: CMP: Rs 662 | Target: Rs 750
The company deals in contractual business as well as residential and commercial real estate. Companies 64 percent of residential pre-sales come from Bangalore market which is one of the IT hubs in India, we expect the new recruitment by the IT industry to increase the residential demand in the South India Market. Inventory levels ready to move and under construction have dropped to their lowest levels. Customers are now preferring branded players like Shobha Developers. The company was expecting new projects/phases spread over 13.53mn sqft in 7 cities. Most of the launches will be from existing land banks. The company has a land bank of approx. 200mn sq ft of salable area.
marico
Buy Marico: CMP: Rs.500| Target: Rs 600
Marico is one of the leading FMCG companies present in the Hair Oil, Edible Oil, Food and Personal Care segment. Products from leading brands include Parachute, Saffola, Nihar, Hair & Care, Set Wet, Livon and Beardo Marico with strong brand recall with a wide distribution reach of over 5 million outlets and a direct reach of 1 million outlets.
“We expect Marico to report a healthy bottom-line CAGR of 11 per cent in FY 2022-24E on the back of strong volume growth on the back of a strong brand, wide distribution network,” the brokerage note said.
The views and investment suggestions of experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decision.
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