Monday, September 26, 2022

Stocks to buy: Nifty @ Mt 16K: Play IT, diagnostics, NBFC, realty stocks

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Information technology, diagnostics, NBFC and real estate players are likely to be the flavour of the upcoming season of buying. This would come on the heels of the Nifty crossing the 16,000-mark for the first time on Tuesday. ET spoke to research analysts at leading brokerages on their top picks for the coming months:

Motilal Oswal:

Titan Company
CMP: Rs 1,839.15. Target Price: Rs 2,040

Titan is the best play on discretionary consumption. Its dominant leadership position in the branded jewellery industry and huge runway for growth are key positives.

Infosys
CMP: Rs 1,654.10. Target Price: Rs 1,770

Infosys is a beneficiary of IT spends and digital transformation initiatives globally. Covid-19 has acted as a tailwind for the IT sector and Infosys is among the big beneficiaries. Strong free cash flow generation and elevated payout ratios support premium valuations.

ICICI Bank
CMP: Rs 690.05. Target Price: Rs 835

Provision coverage is the best in the industry and additional Covid-19 provision buffer at 0.9% of loans provides comfort on normalisation in credit cost.

IIFL:

HDFC
CMP: Rs 2,553.95. Target Price: Rs 2,850

Brokerage bullish on the housing finance giant due to its superior asset quality and strong operating performance on the retail front in a challenging environment. This underpins HDFC’s market leadership and book quality.

NTPC
CMP: Rs 117.6. Target Price: Rs 145

NTPC’s target of achieving 60 GW RE capacity by 2032 is intact and the near-term outlook is improving on strong power demand. Valuations are inexpensive and offer an asymmetric payoff.

Bharti Airtel
CMP: Rs 580.20. Target Price: Rs 753

Prepaid and postpaid tariff hikes cumulatively will result in around 10% upside for Bharti on consolidated earnings before interest, taxes, depreciation and amortisation.

ICICIDIRECT:

Laurus Labs
CMP: Rs 647.4. Target Price: Rs 785

Company is evolving as a strong vertically integrated player with significant capex earmarked for strong order book visibility and incremental traction from the CRAMs business. Laurus supplies APIs to nine out of 10 largest

generic pharma companies.

Tech Mahindra
CMP: Rs 1,226.05. Target Price:: Rs 1,375

Tech Mahindra is witnessing uptick in order book, client mining, large deal wins and 5G. Revenues could see a 12% compounded growth over FY21-FY23 period.

SKF India
CMP: Rs 2,864.75. Target Price: Rs 3,300

An increase in domestic capacity should help SKF India to become a manufacturing hub for Asia. SKF likely to post an 18.6% CAGR in revenue over FY21-FY23.

KOTAK SECURITIES:

HDFC
CMP: Rs 2,553.95. Target Price: Rs 3,100

A combination of improving real estate cycle, strong debt market position, large provisioning buffers on balance sheet and favourable valuations makes it a favoured pick in the sector.

Cholamandalam Investment & Finance
CMP: Rs 516.7. Target Price: Rs 650

The company has demonstrated in the past that it can quickly rampup collections during downcycles — a pattern which it is likely to repeat over the next few months as well.

Sunteck Realty
CMP: Rs 406.90. Target Price: Rs 440

Sunteck Realty has low leverage at 0.17 times net debt-to-equity, no land bank and has been aggressively expanding its portfolio across lower-ticket projects in suburban Mumbai, said Kotak Securities.

EDELWEISS WEALTH:

GNA Axles
CMP: Rs 642.55. Target Price: Rs 832

Increase in wallet share in Meritor and Dana in export market coupled with market share gains in domestic tractors and CV market likely to help GNA surpass the industry growth in upcoming cycle.

Indo Count Industries
CMP: Rs 268.85. Target Price: Rs 313

Brokerage bullish on Indo Count because of positive factors such as robust US import demand, ‘China + 1’ strategy playing out, and continuation of export incentives in addition to attractive valuations.

Brigade Enterprises
CMP: Rs 345.90. Target Price: Rs 470

A continued pickup in residential sales will boost cash flows, aiding future growth. A recovery in office leasing will increase annuity cashflows and expected monetisation of hotel portfolio will drive further deleveraging.

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