Federal Bank, NBCC, and Transport Corporation of India are on the radar of Geojit Financial Services
Geojit Financial Services recommends the following stocks:
Rating: Buy CMP: Rs120 TP: Rs134
Federal Bank Ltd (FB) is a mid-sized private commercial bank having a network of 1252 branches across India with a loan book size of ~Rs77,000cr.
Loan growth outlook continues to remain robust supported by maturing retail network and strong traction in mid-size corporate and retail loans. Asset quality outlook has further improved due to reduction in large risk assets. Fresh slippages are expected to reduce in the coming quarters leading to lower provisions and we expect strong 32% CAGR in earnings over FY17-19E.
Rating: Buy CMP: Rs288 TP: Rs320
Transport Corporation of India Ltd (TCI) is one of the largest integrated players in the organised logistics industry providing Freight, supply chain, warehousing solutions and shipping services.
TCI will be a key beneficiary from implementation of GST, which is expected to boost logistic players business due to increased outsourcing of logistics services. Given healthy earnings outlook we increase target P/E to 21x (20x) on standalone business and value subsidiaries at Rs12/share to arrive at SOTP target price of Rs320 and maintain Buy rating.
Rating: Accumulate CMP: Rs220 TP: Rs227
NBCC Ltd (NBCC) is a Navaratna Enterprise engaged in Project management consultancy (PMC), Engineering Procurement & construction (EPC) and real estate business.Current order backlog of Rs75,000cr (12x FY17 sales) provides strong visibility for next 5yrs. Order inflow guidance of Rs25,000cr for FY18E provides a rosy picture. Execution from large redevelopment will improve revenue growth from H2FY18E. We factor earnings to grow at 42% CAGR over FY17-19E. We NBCC upgrade to Accumulate from Hold with a target price of Rs227.The Great Diwali Discount!
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