3 hot stock picks from Geojit Financial Services

We continue to maintain a positive outlook on AL due to normalization in industry business and new models with BS-IV iEGR technology supported by strong exports, and strategy of defense & electric vehicles

Bharat Forge Ltd

Rating: Buy                                  CMP: Rs691                                 Target Price: Rs792

Bharat Forge Ltd (BFL) is a leading player in the forgings industry

BFL reported a robust revenue growth of 41.2 percent YoY for Q2FY18 led by better traction from US truck sales and non auto export business. Export revenue grew by 56 percent YoY and domestic business grew by 27 percent YoY due to strong growth in all geographies and business segments. We expect BFL to register 18 percent revenue CAGR over FY17-19E on account healthy demand from US - CV, revival of oil & gas sector and new order from domestic auto and non auto space.

Bajaj Finance Ltd

Rating: Buy                            CMP: Rs 1,715                            Target Price: Rs 2,000

Bajaj Finance Limited is one of the leading non-banking financial companies (NBFC) in India with presence across 471 consumer branches and 560 rural locations with over 51,400 distribution points.

Bajaj Finance Limited has reported robust AUM growth of 38 percent YoY led by strong growth in consumer (42 percent YoY) and rural (137 percent) YoY) businesses. The company continues to maintain one of the best asset quality (Gross/Net NPA ratios of 1.7 percent/0.5 percent) among the peer group, despite migration to 90-days past due. In Q2FY18, BFL raised Rs 4,500cr of equity capital through QIP route which helped it to boost capital adequacy ratio (CAR) to 25.4 percent. We expect the recent equity capital infusion will provide enough room to the company to grow at a robust pace for the next few years.

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