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Last Updated : May 15, 2020 01:18 PM IST | Source: Moneycontrol.com

Slideshow | Bandhan Bank and Maruti among 10 buying ideas for 10-39% returns

Brokerages bet on these 10 stocks for 10-39 percent return.

Sensex
1/11

The benchmark indices wiped out all the previous session's gains on May 14 with Nifty ending below 9,150-level on the back of profit booking amid weak global cues. Except for pharma and FMCG, other sectoral indices ended lower. Brokerages bet on these 10 stocks for 10-39 percent return:

Godrej Agrovet | Brokerage: Prabhudas Lilladher | Rating: Buy | Target: Rs 461 | CMP: Rs | Upside: percent. Prabhudas Lilladher revised it EBITDA/PAT/APAT projections for FY21E and FY22E by -2%/-8%/-6% and 2%/4%/9% respectively. Higher APAT upgrade for FY22E is largely due to lower minority interest outgo after increased stake in Astec Lifescience.
2/11

Godrej Agrovet | Brokerage: Prabhudas Lilladher | Rating: Buy | Target: Rs 461 | CMP: Rs 378 | Upside: 22 percent. Prabhudas Lilladher revised its EBITDA/PAT/APAT projections for FY21E and FY22E by -2%/-8%/-6% and 2%/4%/9% respectively. Higher APAT upgrade for FY22E is largely due to lower minority interest outgo after an increased stake in Astec Lifescience.

Bandhan Bank
3/11

Bandhan Bank | Brokerage: Motilal Oswal | Rating: Buy | Target: Rs 350 | CMP: Rs 252 | Upside: 39 percent. Motilal Oswal remains cautious on asset quality in the MFI portfolio and expects an increase in delinquencies over the next few quarters. Thus, it builds elevated credit cost at 2.5% for FY21E. The bank reported strong business growth numbers, with the mix of retail deposits improving further.

Sonata Software | Brokerage: AnandRathi | Rating: Buy | Target: Rs 230 | CMP: Rs | Upside: percent. On the negatives, client concentration is still high (top-10: 64% of revenue). Overall, it thinks the risk-reward is favourable at current valuations.
4/11

Sonata Software | Brokerage: AnandRathi | Rating: Buy | Target: Rs 230 | CMP: Rs 191 | Upside: 20 percent. On the negatives, client concentration is still high (top-10: 64% of revenue). Overall, it thinks the risk-reward is favourable at current valuations.

Motilal Oswal Financial | Brokerage: HDFC Securities | Rating: Buy | Target: Rs 633 | CMP: Rs | Upside: percent. The AMC business is showing traction despite a difficult environment. While company is expanding its broking business, HDFC Securities remain wary of lower ADTVs over FY21E and increased competition. The key risks are prolonged lackluster markets, and any sharp decline in fund raising.
5/11

Motilal Oswal Financial | Brokerage: HDFC Securities | Rating: Buy | Target: Rs 633 | CMP: Rs 504 | Upside: 25 percent. The AMC business is showing traction despite a difficult environment. While the company is expanding its broking business, HDFC Securities remain wary of lower ADTVs over FY21E and increased competition. The key risks are prolonged lackluster markets and any sharp decline in fundraising.

Maruti Suzuki | Brokerage: Prabhudas Lilladher | Rating: Buy | Target: Rs 5,830 | CMP: Rs | Upside: percent. Prabhudas Lilladher believes company is not only beneficiery of likley trend of shift towards personal mobility and down trading towards entry level hatchbacks but is also seeing structural shift towards petrol cars especially in lower CC segments. It has cut FY21 EPS by 6% (led by cut in other income) while maintain FY22 EPS.
6/11

Maruti Suzuki | Brokerage: Prabhudas Lilladher | Rating: Buy | Target: Rs 5,830 | CMP: Rs 5,109 | Upside: 14 percent. Prabhudas Lilladher believes the company is not the only beneficiary of likely trend of the shift towards personal mobility and down trading towards entry-level hatchbacks but is also seeing a structural shift towards petrol cars, especially in lower CC segments. It has cut FY21 EPS by 6% (led by a cut in other income) while maintaining FY22 EPS.

Kotak Mahindra Bank | Brokerage: Dolat Capital | Rating: Buy | Target: Rs 1,450 | CMP: Rs | Upside: 22 percent. With sequential CASA growth at 15% and CASA ratio at 56.2% (up 250 bps QoQ), the bank benefitted from flight to safety of deposits during the quarter.
7/11

Kotak Mahindra Bank | Brokerage: Dolat Capital | Rating: Buy | Target: Rs 1,450 | CMP: Rs 1,173 | Upside: 23 percent. With sequential CASA growth at 15% and CASA ratio at 56.2% (up 250 bps QoQ), the bank benefitted from flight to safety of deposits during the quarter.

Godrej Consumer Products | Brokerage: Sharekhan | Rating: Buy | Target: Rs 630 | CMP: Rs | Upside: percent. Sharekhan lowered its earnings estimates by 17% and 10%, respectively, for FY2021 and FY2022 to factor in the impact of supply disruptions in India and Africa. Any slowdown in core categories or subdued performance by key geographies would act as a key risk to earnings estimates in the near to medium term.
8/11

Godrej Consumer Products | Brokerage: Sharekhan | Rating: Buy | Target: Rs 630 | CMP: Rs 563 | Upside: 12 percent. Sharekhan lowered its earnings estimates by 17% and 10%, respectively, for FY2021 and FY2022 to factor in the impact of supply disruptions in India and Africa. Any slowdown in core categories or subdued performance by key geographies would act as a key risk to earnings estimates in the near to medium term.

Sterlite Technologies | Brokerage: KRChoksey | Rating: Buy | Target: Rs 128 | CMP: Rs | Upside: percent. The stock has already priced in the COVID-19 related slowdown and KRChoksey maintain its positive stance on the stock, given the strong visibility of demand. Given the current slowdown, it revised the estimates and target price accordingly. Broking house expect revenues/PAT to grow at a CAGR of 9%/10% over FY20-22E.
9/11

Sterlite Technologies | Brokerage: KRChoksey | Rating: Buy | Target: Rs 128 | CMP: Rs 100 | Upside: 28 percent. The stock has already priced in the COVID-19 related slowdown and KRChoksey maintains its positive stance on the stock, given the strong visibility of demand. Given the current slowdown, it revised the estimates and target price accordingly. Broking house expects revenues/PAT to grow at a CAGR of 9%/10% over FY20-22E.

Sumitomo Chemicals | Brokerage: ICICI Securities | Rating: Buy | Target: Rs 263 | CMP: Rs | Upside: percent. Sumitomo Japan has registered more than 4,000 patents in health and crop sciences. It believes that Sumitomo Chemicals can steadily introduce some of these products in India. This will save the investments (money and time) in development of new products giving an edge to company over Indian agrochem peers.
10/11

Sumitomo Chemicals | Brokerage: ICICI Securities | Rating: Buy | Target: Rs 263 | CMP: Rs 238 | Upside: 10 percent. Sumitomo Japan has registered more than 4,000 patents in health and crop sciences. It believes that Sumitomo Chemicals can steadily introduce some of these products in India. This will save the investments (money and time) in the development of new products giving an edge to company over Indian agro chem peers.

Godrej Properties | Brokerage: ICICI Securities | Rating: Buy | Target: Rs 721 | CMP: Rs | Upside: percent. Heading into FY21, ICICI Securities expect the COVID-19 induced slowdown to have a significant impact on company's FY21 sales bookings as project launches and home buying decisions get deferred by 2-3 quarters. It believes that company with its strong execution track record, healthy balance sheet (cash reserves of Rs25bn as of March 2020) and counter-cyclical business development strategy will emerge stronger over the medium-term.
11/11

Godrej Properties | Brokerage: ICICI Securities | Rating: Buy | Target: Rs 721 | CMP: Rs 650 | Upside: 11 percent. Heading into FY21, ICICI Securities expect the COVID-19 induced slowdown to have a significant impact on the company's FY21 sales bookings as project launches and home-buying decisions get deferred by 2-3 quarters. It believes that the company with its strong execution track record, healthy balance sheet (cash reserves of Rs25bn as of March 2020) and counter-cyclical business development strategy will emerge stronger over the medium-term.

First Published on May 15, 2020 01:18 pm
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