With two key events - the Union Budget and the Federal Reserve's monetary policy meeting out of the way, investors will shift focus back to earnings and company fundamentals to choose and invest in quality stocks.
Company fundamentals, valuations and growth forecasts are likely to play a greater role in investors' stock selection. Here are seven stocks that still offer solid upside potential of over 30 percent, with reasonable valuations, and robust growth outlook.
Cantor Fitzgerald has a buy call with a target price of Rs 4,369
The flagship firm of the Adani Group has started to regain investor confidence after the apex court cleared the air for the company. Experts suggest that risk-reward is in favour of the investors at current levels and the company is the most reliable for bringing energy resources into India (- this needs to be attributed). Its current valuation is largely driven by three main segments namely airports, roads, and its new energy ecosystem. Adani Enterprises shares have jumped over 43 percent in the past three months.
HDFC Bank | CMP: Rs 1,466
CLSA has a buy call with a target price of Rs 2,025
Notwithstanding near-term concerns over strain on the lender's net interest margin and sluggish deposits post its mega-merger, HDFC Bank's sharp slump in January has turned its valuations attractive. Analysts say that concerns over deposits and NIMs are an overall industry snag, and not specific to HDFC Bank. Moreover, analysts see the lender as a long-term growth story, with the potential to sail through the near-term headwinds as its merger settles down. HDFC Bank has delivered marginally negative returns in the past three months.
PVR Inox | CMP: Rs 1,434
HSBC has a buy call with a target price of Rs 2,140
After a rather dull 2022 for Bollywood, the multiplex company is gradually getting back on its feet. Analysts see light at the end of the tunnel and believe that the content pipeline in CY25 will improve. Global brokerage firm HSBC said that the business fundamentals have stabilised and most concerns are transient. Elara Securities said the company's concerns were overdone, adding that PVR-Inox has a healthy outlook in the medium term. PVR Inox has fallen nearly 10 percent in the past three months.
SBI Life Insurance | CMP: Rs 1,432
BNP Paribas has an outperform rating with a target price of Rs 2,450
The life insurer is one of the best bets out there in the insurance space. The company anticipates clocking in robust, industry-beating growth in the medium term, with solid VNB margins, that are likely to stick around 28 percent for FY24. Brokerages are also buying into the management's bullishness as they expect SBI Life to show margin resilience. The cherry on the cake is the stock's underperformance in the past three months, leaving room for a stronger comeback. The stock has gained 7 percent in the past three months, underperforming the benchmark Nifty's 15 percent gains.
Cyient | CMP: Rs 1,939
Morgan Stanley has an overweight call with a target price of Rs 2,700
Analysts at Morgan Stanley suggest a robust fourth quarter amid demand visibility in key verticals such as connectivity and aerospace. In the previous quarters, communications bottoming out was a positive for the analysts, who are of the view that the strong performance from different verticals has made the outlook promising. Cyient shares have surged 17 percent in the past three months.
Asian Paints | CMP: Rs 2,929
HSBC has a buy call with a target price of Rs 4,020
After a stellar October-December quarter, analysts see the growth outlook as strong, and expect price wars to stabilise in the coming quarters. HSBC believes that fears of competition-based prices are exaggerated. As for the rural demand, the monsoon coupled with an uptick in government spending and moderating inflation is likely to bring in positivity for the rural economy. Asian Paints has lost 0.4 percent in the past three months.
Sunteck Realty | CMP: Rs 470
YES Securities has a buy call with a target price of Rs 586
In recent years, Sunteck Realty has showcased an impressive track record of acquiring projects and ramped up its execution capabilities. A strong balance sheet, strong upcoming cash flow and a consolidating market make management optimistic about doubling its under-execution pipeline to Rs 600 bn in 3 years, making the stock a favourite among analysts. Meanwhile, current valuations also make the risk-reward favourable for Sunteck Realty, with new project additions being the key growth drivers. Shares of Sunteck Realty are up 7 percent in the past three months.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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