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Slideshow | Titan, RIL, SBI among 10 buying ideas that can return up to 48%

Here are the top 10 buying ideas from the brokerages with an upside upto 48 percent:

August 05, 2020 / 10:58 AM IST
Sensex
After a four day losing streak, benchmark indices returned to the positive territory on August 4 supported by banking, energy, infra and pharma stocks. The Sensex was up 748.31 points or 2.03 percent at 37,687.91, and the Nifty was up 203.70 points or 1.87 percent at 11,095.30.
Titan | Brokerage: Motilal Oswal | Rating: Buy | CMP: Rs | Target: Rs 1,215 | Upside: percent. Company's medium-to-long term earnings growth opportunity is best-of-breed, reflected in the 24% EPS CAGR over the past three years. There is a strong runway for growth going forward given company's market share of less than 10% and the continuing struggles of unorganized and other organized peers. As FY22 multiples at 50x may appear to provide a challenging entry point for investment, Motilal's upgrade to buy may consequently appear to be an early one. However, this is primarily due to the temporary impact of the pandemic in FY21, from which the rebound would be sharp.
Titan | Brokerage: Motilal Oswal | Rating: Buy | CMP: Rs 1,074.90 | Target: Rs 1,215 | Upside: 13 percent. The company's medium-to-long-term earnings growth opportunity is best-of-breed, reflected in the 24 percent EPS CAGR over the past three years. There is a strong runway for growth going forward given the company's market share of less than 10 percent and the continuing struggles of unorganised and other organised peers. FY22 multiples at 50x may appear to provide a challenging entry point for investment, Motilal's upgrade to buy may consequently appear to be an early one. However, this is primarily due to the temporary impact of the pandemic in FY21, from which the rebound would be sharp.
Relaxo Footwears | Brokerage: ICICIdirect | Rating: Buy | CMP: Rs | Target: Rs 715 | Upside: percent. Given the dominant presence in non-metro cities and being the market leader in value priced segment (in terms of volumes), Relaxo is well placed to further consolidate its market share. Company, through its strong balance sheet and brand patronage, is expected to tide over the current situation better than small peers. ICICIdirect maintained its estimates and bake in revenue & EPS CAGR of 10% & 18%, respectively, in FY20-22E.
Relaxo Footwears | Brokerage: ICICIdirect | Rating: Buy | CMP: Rs 612.95 | Target: Rs 715 | Upside: 16 percent. Given the dominant presence in non-metro cities and being the market leader in the value-priced segment (in terms of volumes), Relaxo is well placed to further consolidate its market share. The company, through its strong balance sheet and brand patronage, is expected to tide over the current situation better than small peers. ICICIdirect maintained its estimates and bake in revenue & EPS CAGR of 10% & 18%, respectively, in FY20-22E.
 (Image: Reuters)
Sun Pharmaceutical Industries | Brokerage: ICICIdirect | Rating: Buy | CMP: Rs 528.50 | Target: Rs 625 | Upside: 18 percent. While the company’s US generics front is going through calibrated product rationalisation, the specialty segment looks promising due to robust product pipeline, steady progress. This metamorphic shift from generics to specialty, however, is likely to weigh on US growth in the near-term. That said, a higher contribution from specialty and the strong domestic franchise is likely to change the product mix towards more remunerative businesses by FY22. This would have positive implications for margins also as we expect faster absorption of frontloaded costs on the specialty front.
Source: Reuters
SBI | Brokerage: Motilal Oswal | Rating: Buy | CMP: Rs 191.65 | Target: Rs 285 | Upside: 48 percent. The company reported strong operating performance in a challenging environment. Deposit growth stood strong and aggressive cut in SA/TD rates enabled margin improvement unlike the decline for many other private banks. Slippages were lower, helped by RBI’s dispensation, which resulted in an improvement in asset quality ratios. Motilal Oswal upgraded its earnings estimate for FY21/FY22E by 8%/9% factor in higher NII growth.
Reliance Industries | Brokerage: KRChoksey | Rating: Buy | CMP: Rs | Target: Rs 2,394 | Upside: percent. KRChoksey continue to maintain its positive view on the long-term performance of the stock and like the business reorganization initiatives at RIL, its focused balance sheet deleveraging strategy by carving out its diverse business interests into separate entities and ability to attract long term investors. (Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.)
Reliance Industries | Brokerage: KRChoksey | Rating: Buy | CMP: Rs 2,151.15 | Target: Rs 2,394 | Upside: 10 percent. KRChoksey continues to maintain its positive view on the long-term performance of the stock and likes the business reorganisation initiatives at RIL, its focused balance sheet deleveraging strategy by carving out its diverse business interests into separate entities, and ability to attract long term investors. (Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.)
SRF | Brokerage: Dolat Capital | Rating: Buy | CMP: Rs | Target: Rs 4,306 | Upside: percent. Company's strong capex plans and focus on growing specialty chemicals business are expected to be RoCE accretive at full capacity utilisations. Broking house like SRF’s moat in fluorination and ability to scale up its growth engines.
SRF | Brokerage: Dolat Capital | Rating: Buy | CMP: Rs 3,812.70 | Target: Rs 4,306 | Upside: 13 percent. The company's strong capex plans and focus on growing specialty chemicals business are expected to be RoCE accretive at full capacity utilisations. The broking house likes SRF’s moat in fluorination and ability to scale up its growth engines.
Phoenix Mills | Brokerage: ICICIdirect | Rating: Buy | CMP: Rs | Target: Rs 725 | Upside: percent. The company remains a quasi play on India’s consumption story, notwithstanding a steep impact on retail & hospitality portfolio in FY21, given the quality of assets, healthy balance sheet & strategic expansion plans. With only five to six major retail mall developers currently in India, and given company’s USP of operating large format properties efficiently, it is likely to emerge as a superior player in the medium to long term.
Phoenix Mills | Brokerage: ICICIdirect | Rating: Buy | CMP: Rs 595.85 | Target: Rs 725 | Upside: 21 percent. The company remains a quasi play on India’s consumption story, notwithstanding a steep impact on retail & hospitality portfolio in FY21, given the quality of assets, healthy balance sheet & strategic expansion plans. With only five to six major retail mall developers currently in India, and given the company’s USP of operating large format properties efficiently, it is likely to emerge as a superior player in the medium to long-term.
UPL | Brokerage: Prabhudas Lilladher | Rating: Buy | CMP: Rs | Target: Rs 606 | Upside: percent. Company's results were significantly ahead of estimates driven by focus on improving product mix for higher margin and differentiated products and higher than anticipated shift in geographical mix headed towards more profitable regions like India and Europe. India business grew 27% driven by strong market demand. Prabhudas Lilladher increase EBITDA/APAT estimates by 5%/3% for FY21 & 8%/8% FY22 to factor in higher than anticipated benefit on gross margins & reduction in SG&A expenses. The stock continues to be among the most attractive stock in the global agchem space.
UPL | Brokerage: Prabhudas Lilladher | Rating: Buy | CMP: Rs 461.60 | Target: Rs 606 | Upside: 31 percent. The company's results were significantly ahead of estimates driven by a focus on improving product mix for higher margin and differentiated products and higher than anticipated shift in geographical mix headed towards more profitable regions like India and Europe. India business grew 27 percent driven by strong market demand. Prabhudas Lilladher increased EBITDA/APAT estimates by 5%/3% for FY21 & 8%/8% FY22 to factor in higher than anticipated benefit on gross margins & reduction in SG&A expenses. The stock continues to be among the most attractive stock in the global agchem space.
Zydus Wellness | Brokerage: Sharekhan | Rating: Buy | CMP: Rs | Target: Rs 1,780 | Upside: percent. The company posted decent performance in Q1FY2021 in the backdrop of supply disruption and discretionary nature of the product portfolio. Sharekhan raised its earnings estimates for FY2021 and FY2022 to factor in better-than-expected performance in Q1. The stock is currently trading at 42.4x its FY2022E earnings.
Zydus Wellness | Brokerage: Sharekhan | Rating: Buy | CMP: Rs 1,703.60 | Target: Rs 1,780 | Upside: 4 percent. The company posted decent performance in Q1 FY2021 in the backdrop of supply disruption and discretionary nature of the product portfolio. Sharekhan raised its earnings estimates for FY2021 and FY2022 to factor in better-than-expected performance in Q1. The stock is currently trading at 42.4x its FY2022E earnings.
Bharat Electronics | Brokerage: Geojit | Rating: Buy | CMP: Rs | Target: Rs 112 | Upside: percent. Despite weak execution Geojit continue to maintain its positive stance on the stock given its strong order backlog and strong order pipeline which is providing clear visibility for next 3 years. Further, expectation of higher defence spending given increasing focus on defence modernisation and indigenous procurement, it value stock at 13x on FY22E and maintain buy rating, with a target price of Rs 112.
Bharat Electronics | Brokerage: Geojit | Rating: Buy | CMP: Rs 100.20 | Target: Rs 112 | Upside: 11 percent. Despite weak execution, Geojit continues to maintain its positive stance on the stock given its strong order backlog and strong order pipeline which is providing clear visibility for the next 3 years. Further, given the expectation of higher defence spending given the increasing focus on defence modernisation and indigenous procurement, it values stock at 13x on FY22E and maintains buy rating, with a target price of Rs 112.
Moneycontrol News
first published: Aug 5, 2020 10:58 am

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