Top 6 buying ideas for April from KRChoksey for 13-38% upside

IT, infrastructure and auto companies are among the broking house's top picks for the month of April 2021.

April 08, 2021 / 11:45 AM IST
BSE,NSE,Sensex,nifty
The Indian market ended in the green for the second straight session on April 7 after the Reserve Bank of India (RBI) kept key policy rates unchanged and stuck to an "accommodative stance". THe Sensex rose 460.37 points or 0.94% to close at 49,661.76, while Nifty was up 135.50 points or 0.92% to end at 14,819. The RBI's monetary policy committee (MPC) left the repo rate unchanged at 4 percent and the reverse repo rate at 3.35 percent. Except power, all other BSE sectoral indices ended on a positive note on April 7, with realty, IT, auto, bank, oil & gas and metal indices adding 1 percent each. Here are the top six buying ideas from the broking house KRChoksey for April 2021 with an upside of 13-38 percent from the closing prices of April 7, 2021. (Disclaimer: The views and investment tips expressed by 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.)
ACC | Rating: Buy | CMP: Rs | Target: Rs 2,185 | Upside: percent. With expected capacity addition and steady capacity utilization giving good revenue visibility, we are positive on ACC’s future growth potential. Management’s focus on improving ACC’s margin profile by increasing share of premium products in revenue mix augur well for the company.
ACC | Rating: Buy | CMP: Rs 1,917.30 | Target: Rs 2,185 | Upside: 14 percent. With expected capacity addition and steady capacity utilization giving good revenue visibility, we are positive on ACC’s future growth potential. The management’s focus on improving ACC’s margin profile by increasing the share of premium products in the revenue mix augur well for the company.
Alembic Pharmaceuticals | Rating: Buy | CMP: Rs | Target: Rs 1,286 | Upside: percent. We continue to apply P/E multiple of 23.5x on the FY22E EPS of Rs 54.7/share in the wake of increased earnings visibility & maintain our target price at Rs 1,286 per share. Accordingly, we reiterate a buy rating on the shares of Alembic Pharma.
Alembic Pharmaceuticals | Rating: Buy | CMP: Rs 973.25 | Target: Rs 1,286 | Upside: 32 percent. We continue to apply P/E multiple of 23.5x on the FY22E EPS of Rs 54.7/share in the wake of increased earnings visibility and maintain our target price at Rs 1,286 a share. Accordingly, we reiterate a buy rating on the shares of Alembic Pharma.
Granules India | Rating: Buy | CMP: Rs | Target: Rs 459 | Upside: percent. We expect Granules India to post Revenue/PAT CAGR of 20.3%/41.7% over FY20-22. Since our last update, the shares of Granules India has corrected 6.2% and currently trading at a P/E multiple of 14.0x/12.4x on FY21E/FY22E earnings. We continue to apply P/E multiple of 19.0x on FY22E EPS of Rs 25.0/share (earlier Rs 24.2/share) and maintain the target price of Rs 459/ share. Accordingly, we reiterate our buy rating on the shares of Granules India.
Granules India | Rating: Buy | CMP: Rs 331.05 | Target: Rs 459 | Upside: 38 percent. We expect Granules India to post revenue/PAT CAGR of 20.3%/41.7% over FY20-22. Since our last update, the shares of Granules India have corrected 6.2% and are trading at a P/E multiple of 14.0x/12.4x on FY21E/FY22E earnings. We continue to apply P/E multiple of 19.0x on FY22E EPS of Rs 25 a share (earlier Rs 24.2 a share) and maintain the target price of Rs 459 a share. Accordingly, we reiterate our buy rating on the shares of Granules India.
Bajaj Finance | Rating: Buy | CMP: Rs | Target: Rs 5,760 | Upside: percent. We have factored CAGR 30% in PAT over FY21-23 on a CAGR 25% in advances on account of efficiencies. RoA are expected to improve to 3.6% in FY23 from 2.9% in FY21. Currently it is trading at ~ 6.2x FY23 P/ABV, which is largely in-line with the historic average. We maintain the target price at Rs 5,760 per share, valuing the NBFC at 7.5x FY23E ABV. Accordingly, we upgrade the rating on the shares of Bajaj Finance to a buy.
Bajaj Finance | Rating: Buy | CMP: Rs 5,076.75 | Target: Rs 5,760 | Upside: 13 percent. We have factored CAGR 30% in PAT over FY21-23 on a CAGR 25% in advances on account of efficiencies. RoA is expected to improve to 3.6% in FY23 from 2.9% in FY21. Currently, it is trading at ~ 6.2x FY23 P/ABV, which is largely in line with the historic average. We maintain the target price at Rs 5,760 per share, valuing the NBFC at 7.5x FY23E ABV. Accordingly, we upgrade the rating on the shares of Bajaj Finance to a buy.
Tata Motors | Rating: Buy | CMP: Rs | Target: Rs 360 | Upside: percent. With improving volume demand domestically and on international front backed by cost optimization and cash saving initiative, we expect the company to grow at CAGR of 6.6% / 25% in topline/EBITDA over FY21/23E. We continue to apply a P/E multiple of 20x on FY23E EPS of Rs 18 and maintain the target price of Rs 360 per share. Accordingly, we upgrade the rating of Tata Motors to a buy.
Tata Motors | Rating: Buy | CMP: Rs 307.80 | Target: Rs 360 | Upside: 17 percent. With improving volume demand domestically and on the international front backed by cost optimisation and cash saving initiative, we expect the company to grow at a CAGR of 6.6% / 25% in topline/EBITDA over FY21/23E. We continue to apply a P/E multiple of 20x on FY23E EPS of Rs 18 and maintain the target price of Rs 360 a share. Accordingly, we upgrade the rating of Tata Motors to a buy.
Infosys | Rating: Buy | CMP: Rs | Target: Rs 1,675 | Upside: percent. The stock trades at a PE of 25.5x/23.2x FY22E/FY23E EPS, respectively. We forecast healthy 14%/13%/14% CAGRs in USD revenue/EBIT/EPS, respectively. Infosys remains our top pick in the top-tier IT space, and we maintain our buy rating on the stock, with a target price of Rs 1,675.
Infosys | Rating: Buy | CMP: Rs 1,430.25 | Target: Rs 1,675 | Upside: 17 percent. The stock trades at a PE of 25.5x/23.2x FY22E/FY23E EPS, respectively. We forecast healthy 14%/13%/14% CAGRs in USD revenue/EBIT/EPS, respectively. Infosys remains our top pick in the top-tier IT space, and we maintain our buy rating on the stock, with a target price of Rs 1,675.
Rakesh Patil
first published: Apr 8, 2021 11:44 am

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