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Last Updated : Jul 10, 2020 09:28 AM IST | Source: Moneycontrol.com

Slideshow | Super Six buying picks by brokerages for up to 20% upside

Here are the top six buying recommendations from the broking house with an upside up to 20 percent. (LTP is of July 9, 2020).

Sensex
1/7

On July 9, the market regained momentum after the previous day's fall, helped by metal and financials. The Sensex rose 408.68 points to end at 3,6737.69 and the Nifty was up 107.70 points at 10,813.50.

L&T Technology Services | Brokerage: Sharekhan | Rating: Buy | Target: Rs 1,600 | LTP: Rs | Upside: percent. The stock price has corrected by around 20% from its peaks since YTD CY2020. Sharekhan believes that this correction offers long-term investment opportunities to investors given the long runway for its growth, driven by leadership depth, broad client portfolio, multi-domain expertise and an underpenetrated ERD outsourcing market. The company has the potential to recover faster and has been able to report strong growth among peers given its superior execution capabilities, status as preferred partner among top spenders and a promising deal pipeline once the situation settles down.
2/7

L&T Technology Services | Brokerage: Sharekhan | Rating: Buy | Target: Rs 1,600 | LTP: Rs 1,406 | Upside: 13 percent. The stock price has corrected by around 20% from its peaks since YTD CY2020. Sharekhan believes that this correction offers long-term investment opportunities, given the long runway for its growth, driven by leadership depth, broad client portfolio, multi-domain expertise and an underpenetrated ERD outsourcing market. The company has the potential to recover faster and has been able to report strong growth among peers given its superior execution capabilities, status as a preferred partner among top spenders and a promising deal pipeline once the situation settles down.

Mishra Dhatu Nigam | Brokerage: ICICIdirect| Rating: Buy | Target: Rs 260 | LTP: Rs | Upside: percent. The company's Q4FY20 performance was impacted by Covid-19 related concerns. Even in FY21, due to Covid-19, there was a disruption in production activity for 45 days. Subsequently, normal production activities have resumed from May 20, 2020. Despatch of finished materials has already started in May 2020. Backed by a strong order book position, ICICIdirect expect company to report healthy performance, going forward.
3/7

Mishra Dhatu Nigam | Brokerage: ICICIdirect| Rating: Buy | Target: Rs 260 | LTP: Rs 217 | Upside: 20 percent. The company's Q4FY20 performance was impacted by COVID-19 related concerns. Even in FY21, due to COVID-19, there was a disruption in production activity for 45 days. Subsequently, normal production activities resumed from May 20, 2020. The dispatch of finished materials had already started in May 2020. Backed by a strong order book position, ICICIdirect expect the company to report healthy performance, going forward.

Pfizer | Brokerage: ICICIdirect | Rating: Buy | Target: Rs 4,740 | LTP: Rs | Upside: percent. Despite divestiture of certain brands and Covid-19 related challenges in Q4FY20, Pfizer posted steady growth. The company is following a measured approach with de-focusing and hiving off of tail brands and focusing on core strengths areas such as vaccines, pain management, vitamins, GI and CVS. The vaccines segment especially remains at the core of future growth and new launches. ICICIdierct continue to believe in Pfizer’s strong growth track record in power brands and capability in new launches on a fairly consistent basis.
4/7

Pfizer | Brokerage: ICICIdirect | Rating: Buy | Target: Rs 4,740 | LTP: Rs 4,121 | Upside: 15 percent. Despite divestiture of certain brands and COVID-19 related challenges in Q4FY20, Pfizer posted a steady growth. The company is following a measured approach with de-focusing and hiving off of tail brands and focusing on core strengths areas such as vaccines, pain management, vitamins, GI and CVS. The vaccines segment especially remains at the core of future growth and new launches. ICICIdirect continues to believe in Pfizer’s strong growth track record in power brands and capability in new launches on a fairly consistent basis.

AU Small Finance Bank | Brokerage: Motilal Oswal | Rating: Buy | Target: Rs 675 | LTP: Rs | Upside: percent. AU Small Finance Bank reported a steady operating performance for FY20, even as COVID-19 provisions dented earnings. Although asset quality remains stable, trends in collection efficiency remain key to assessing the overall impact of moratorium, which would keep asset quality under watch. Deposit growth, however, has held strong, enabling the bank to maintain strong surplus liquidity. Motilal Oswal estimate loan growth trends to remain soft at 15% in FY21, while credit cost could increase to 1.7% in FY21E as it build-in higher slippages.
5/7

AU Small Finance Bank | Brokerage: Motilal Oswal | Rating: Buy | Target: Rs 675 | LTP: Rs 622 | Upside: 8 percent. AU Small Finance Bank reported a steady operating performance for FY20, even as COVID-19 provisions dented earnings. Although asset quality remains stable, trends in collection efficiency remain key to assessing the overall impact of moratorium, which would keep asset quality under watch. Deposit growth, however, has held strong, enabling the bank to maintain strong surplus liquidity. Motilal Oswal estimates loan growth trends to remain soft at 15% in FY21, while credit cost could increase to 1.7% in FY21E as it build-in higher slippages.

GAIL India | Brokerage: Geojit | Rating: Buy | Target: Rs 119 | LTP: Rs | Upside: percent. Geojit expect the recovery in oil and gas prices and revival of economy after the lockdown. Company should also benefit from the potential contribution from new pipelines. The Department of Telecommunication will withdraw the claim of Rs 1.83 lakh crore from GAIL. Given these positive catalysts and current upside potential, broking house upgrade its rating to buy on the stock with a revised target price of Rs 119 based on sum of the parts (SOTP) valuation methodology.
6/7

GAIL India | Brokerage: Geojit | Rating: Buy | Target: Rs 119 | LTP: Rs 105.5| Upside: 12 percent. Geojit expects the recovery in oil and gas prices and revival of the economy after the lockdown. The company should also benefit from the potential contribution from new pipelines. The Department of Telecommunication will withdraw the claim of Rs 1.83 lakh crore from GAIL. Given these positive catalysts and current upside potential, broking house upgrades its rating to buy on the stock with a revised target price of Rs 119 based on the sum of the parts (SOTP) valuation methodology.

Equitas Holdings | Brokerage: Emkay | Rating: Buy | Target: Rs 65 | LTP: Rs | Upside: percent. Emkay retained its buy rating with a revised target price of Rs 65 (up from Rs54), based on 0.7x FY22 ABV, given better deposit traction after a scare across SFBs in Q4, which should help the bank in the long run to protect its margins/RoA. However, asset quality performance and listing its SFB will remain key monitorable in the near term. In its Q1FY21 business update, Equitas has reported healthy deposit (ex-CD) growth of 11% qoq to Rs 114.7 bn, led by strong traction in Retail TD (17% qoq) in line with the management’s strategy to focus on granular retail deposits.
7/7

Equitas Holdings | Brokerage: Emkay | Rating: Buy | Target: Rs 65 | LTP: Rs 58.30 | Upside: 11 percent. Emkay retained its buy rating with a revised target price of Rs 65 (up from Rs 54), based on 0.7x FY22 ABV, given better deposit traction after a scare across SFBs in Q4, which should help the bank in the long run to protect its margins/RoA. However, asset quality performance and listing its SFB will remain key monitorable in the near term. In its Q1FY21 business update, Equitas has reported healthy deposit (ex-CD) growth of 11% QoQ to Rs 114.7 bn, led by strong traction in Retail TD (17% QoQ) in line with the management’s strategy to focus on granular retail deposits.

First Published on Jul 10, 2020 09:21 am
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