Month: October 2021

Buy ICICI Bank, says Motilal Oswal

The brokerage is bullish on the stock of ICICI Bank and has set a target price of Rs 1,000 on the stock, post quarterly numbers of the bank, as against the current market price of Rs 847.

“ICICI Bank reported a strong 2QFY22, led by healthy NII growth (11 basis points NIM expansion), strong fee income trends, and controlled provisions. The bank reported a 5%/9% beat to our PPOP/net earnings estimate and is progressing swiftly towards earnings normalization,” the brokerage has said.

“The additional COVID-19 provision buffer (0.8% of loans) provides a comfort on credit cost. Restructured loans increased to 1.3% of loans. The bank carries 20% provisions on this portfolio. We increase our estimates for FY22/FY23 by 5%/2.5% and expect RoA/RoE to improve to 2%/16.6% by FY24E. We maintain our Buy rating with a revised SoTP-based target price of Rs 1,000 per share (2.8x Sep’23E ABV for the bank). ICICI Bank remains our top pick in the sector,” Motilal Oswal Institutional Equities has said in its report.

Buy Reliance Industries

The broking firm also has a buy call on the stock of Reliance Industries with a price target of Rs 2,900, as against the current market price of Rs 2,597.

“Using SoTP, we value the Refining and Petrochemical segment at 7.5x FY24E EV/EBITDA to arrive at a valuation of INR775/share for the standalone entity. We ascribe an equity valuation of Rs 880 per share to RJio and Rs 1,200 per share to Reliance Retail, factoring in the recent stake sale. Our higher EV/EBITDA multiple of 33x/19x for Retail/Digital Services underscores new growth opportunities in the Digital space, along with the rationalization of tariffs in RJio. We reiterate our Buy rating with a target price of Rs 2,900 per share,” the brokerage has said.

Buy HDFC Life Insurance

Motilal Oswal Institutional Equities also has a buy call on the stock of HDFC Life Insurance. According to the brokerage, the management remains focused on maintaining a balanced product mix across the business, with an emphasis on product innovation and superior customer service.

“In the near term, Non-PAR/Annuity/Credit Life is likely to witness healthy growth. Demand for ULIP has bounced back strongly, but growth depends upon the performance of the capital market. Persistency trends remain steady across cohorts and will continue to aid robust renewal trends. We estimate VNB margin to reflect stable trends, driving 22% VNB CAGR over FY21-24E, with margin to sustain 27% over FY24E. We estimate FY24E operating RoEV 19%. We maintain our Neutral rating with an unchanged target price of Rs 750 per share, corresponding to 3.8 times Sep’23E EV,” the brokerage has said.

Disclaimer

The above stocks are picked from the brokerage report of Motilal Oswal Institutional Equities. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

Dixon Technologies

Dixon Technologies (India) Ltd, situated in Noida, is an Indian electronics manufacturing services company. It works as a contract manufacturer for Samsung, Xiaomi, Panasonic, and Philips, producing televisions, washing machines, smartphones, LED bulbs, battens, downlighters, and CCTV security systems. Only 3.65% of trading sessions in the last four years had intraday gains of more than 5%.

Dixon Technologies (India) Ltd., founded in 1993, is a mid-cap business in the Consumer Durables category with a market capitalization of Rs 30,082.54 crore.The company’s yearly sales growth of 46.41 percent surpassed its three-year compound annual growth rate (CAGR) of 31.0 percent. The stock returned 1075.78 percent over three years, compared to 90.6 percent for the Nifty Midcap 100. Over a three-year period, the stock returned 1075.78 percent, compared to 62.39 percent for the S&P BSE Capital Goods index.

Vaibhav Global

Vaibhav Global Limited, originally Vaibhav Gems, is a multi-national electronic retailer and fashion jewellery and lifestyle accessory producer. It offers its products through Shop LC in the United States and TJC in the United Kingdom, which are both home shopping channels. In the last five years, the company has regularly raised ROE, with the majority of profits being added to reserves last year. Annual sales growth of 27.82 percent surpassed the company’s three-year CAGR of 17.2 percent. Stock returned 456.57 percent over three years, compared to 90.6 percent for the Nifty Midcap 100.

Vaibhav Global Ltd., founded in 1989, is a Mid Cap business in the Gems & Jewellery industry with a market capitalization of Rs 11,407.91 crore.

Amber Enterprises

Only 1.85 percent of trading sessions in the last three years had intraday drops of more than 5%. The stock returned 281.2 percent over three years, compared to 90.6 percent for the Nifty Midcap 100. Sales have decreased by 22.85%. For the first time in three years, the company’s revenue has decreased. In comparison, the S&P BSE Consumer Durables index returned 140.26 percent to investors over a three-year period. Over a three-year period, the stock returned 281.2 percent, compared to 140.26 percent for the S&P BSE Consumer Durables index. Amber Enterprises India Ltd., founded in 1990, is a Mid Cap business in the Consumer Durables sector with a market capitalization of Rs 11,272.24 crore.

Orient Electric

Orient Electric Limited, situated in New Delhi and owned by the CK Birla Group, is an Indian multinational electrical equipment company. Fans, lighting, home appliances, and switchgears are all manufactured by the company. In Kolkata, Faridabad, and Noida, Orient Electric has manufacturing facilities. The company has enough cash on hand to cover its contingent liabilities. 1.31 percent decrease in sales. For the first time in three years, the company’s revenue has decreased. In the fiscal year ended March 31, 2021, the company spent 1.02 percent of its operational revenues on interest charges and 8.81 percent on staff costs.

Stock returned 172.94 percent over three years, compared to 90.6 percent for the Nifty Midcap 100. Over a three-year period, the stock returned 172.94 percent, while the S&P BSE Capital Goods index returned 62.39 percent.

Bajaj Electrical

Bajaj Electricals Ltd, situated in Mumbai, Maharashtra, is an Indian consumer electronics manufacturer. It is a subsidiary of the Bajaj Group, which has a market capitalization of 380 billion rupees. Lighting, luminaries, appliances, fans, LPG-based generators, engineering, and projects have all become part of its portfolio. Only 3.3 percent of trading sessions in the last 14 years had intraday drops of more than 5%. Stock returned 136.55 percent over three years, compared to 90.6 percent for the Nifty Midcap 100. Over a three-year period, the stock returned 136.55 percent, compared to 62.39 percent for the S&P BSE Capital Goods index.

Voltas

Voltas Limited is an Indian multinational electronics firm that specialises in air conditioning and cooling technology and manufactures home goods. The company was founded in Mumbai on September 6, 1954, as a joint venture between Tata Sons and Volkart Brothers. The stock returned 138.01 percent over three years, compared to 75.82 percent for the Nifty 100. Over a three-year period, the stock returned 138.01 percent, while the S&P BSE Consumer Durables index returned 140.26 percent. Voltas Ltd., founded in 1954, is a Large Cap business in the Consumer Durables category with a market capitalization of Rs 38,589.43 crore.

Crompton Greaves Consumer Electricals

Crompton Greaves Consumer Electricals Ltd., founded in 2015, is a Mid Cap business in the Consumer Durables category with a market cap of Rs 28,763.11 crore.

The stock returned 133.59 percent over three years, compared to 90.6 percent for the Nifty Midcap 100.

Revenue fell by 30.63 percent on a quarter-over-quarter basis, the lowest level in the last three years. Over a three-year period, the stock returned 133.59 percent, compared to 62.39 percent for the S&P BSE Capital Goods index.

7 Best Performing BSE Consumer Durables In The Past 3 Years

Disclaimer

Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article. This article is only for educational purpose.