Equity investments are best when considered for long term and investor should be ready to bear risk in order to receive a high return. These brokerage houses come up with research reports based on various fundamental aspects and suggested price targets.
An investor should do their own research before buying any stock. Indian equity markets opened higher tracking positive Asian cues as opinion polls showed that Hillary Clinton was ahead of Donald Trump by 3%.
Here are 7 stocks that brokerages are betting on from a long-term perspective.
Way2wealth is recommending buy on Exide Industries with a target price of Rs 294 in its latest research report.
Exide designs, manufactures, markets and sells the widest range of lead acid storage batteries in the world from 2.5Ah to 20,600Ah capacity, to cover the broadest spectrum of applications.
"At CMP of Rs 203, Exide is currently trading at a PE of 15.6x FY18E and EV/EBITDA of 11x FY18E (Net of insurance business). We value Exide's core battery business at Rs 241 per share by applying 25xP/E and valuing insurance business at Rs 52. We reiterate our Buy rating on the stock with a target price of Rs 294 (45% upside potential in the next 12-18 months)", the report said.
Reliance Securities has recommended a buy rating on the Colgate Palmolive with a target price of Rs 1,150 in its research report.
"Net revenue of Colgate-Palmolive (India) grew by 9.4% yoy to Rs 10.5 bn, while net profit increased 15.6% yoy to Rs 1.8 bn in 2QFY17. The Company's overall volume grew by 4% yoy during the quarter. We estimate 12.9% & 13.5% CAGR in revenue and earnings, respectively through FY16-18E", the firm has said in its research report.
At CMP, the stock is currently trading at 35.6x FY18E earnings. With the current risk reward ratio remaining favourable, we upgrade our recommendation on the stock to BUY from HOLD with a revised Target Price of Rs 1,105 (from Rs 1,055 earlier), added further.
LKP Securities is bullish on Zee Entertainment has recommended buy rating on the stock with a target price of Rs 572 in its research report.
Zee Entertainment Enterprises Limited is one of India's leading television media and entertainment companies. It is amongst the largest producers and aggregators of Hindi programming in the world, with an extensive library housing over 222,000 hours of television content.
"Zee posted strong performance in Q2 as the numbers were lifted by subscription revenues which grew at 22% yoy on the back of 24.6% yoy growth in the domestic arm on the back of catch up revenues of the previous quarter and early closures of content deals as compared to previous year", the report said.
In Q2, they came in at 28.9% higher 290 bps yoy as sports losses reduced and subscription revenues moved up. Programming costs as a % of sales moved up to 45.3% on higher cost involved with movie production and India cricket series. Despite higher depreciation and lower other income, PAT adjusted for exceptional losses came in at Rs 3.27 bn which was 17.3% higher yoy. Reported PAT was down 18.3% yoy at Rs 2.44 bn, the research report said.
Prabhudas Lilladher has recommended Tech Mahindra stock with a target price of Rs 525 in its research report.
"Tech Mahindra's (TECHM's) Q2FY17 revenues and margins were ahead of estimates. Revenues grew 5% QoQ in CC terms and organic growth was 2.5%. Revenue growth was aided by recovery in Telecom vertical which grew 2.4%QoQ after a weak performance in the past few quarters", the report said.
EBIT margins were largely inline with estimates. Company took a one‐time, restructuring charge of US$13m in the quarter which impacted margins by 120bps, added further.
KR Choksey is bullish on Cholamandalam Finance has recommended buy rating on the stock with a target price of Rs 1335 in its research report.
Cholamandalam Investment and Finance Company Limited, incorporated in 1978 as the financial services arm of the Murugappa Group.
"Robust 19% Y-o-Y growth in AUMs backed by traction in both home equity and vehicle finance segment and improving credit costs boosted earnings for the quarter for Cholamandalam Finance (CIFC). While the company adopts cautious stance on LAP that is currently witnessing elevated levels of stress, the underwriting norms have been tightened. That said, the home equity portfolio maintains healthy growth trends with 17% Y-o-Y increase in disbursements and healthy 18%+ Y-o-Y growth in home equity AUMs", the report said.
"With robust 20%+ earnings CAGR over FY17-18E and RoE poised to expand to 18% levels on the back of cyclical recovery and thrust upon home loan book, we reckon, CIFC as one of the strong plays in the retail finance space justifying higher valuations. Against this backdrop, we maintain BUY recommendation on the stock. We value the company at 4.8x P/ABV FY18E arriving at a target price of 1,335 factoring higher business and earnings CAGR with superior return profile. At CMP, the stock is trading at 4.1x P/ABV FY18E", added further.
KR Choksey has recommended accumulate rating on Bajaj Auto with a target price of Rs 3185 in its research report dated November 01, 2016.
"In Q2FY17, Bajaj Auto Ltd. (BAL) reported net sales of INR 60,545 Mn, which was (in-line with our estimate of INR 60,395 Mn) increased by 5.3% Q-o-Q and remained flat on Y-o-Y basis. EBIDTA margins stood at 21.4% respectively and exceeded our expectations by 44bps. Adjusted PAT stood at INR 12,007 Mn. PAT saw a growth of 28.6% Y-o-Y and 22.7% Q-o-Q for Q2FY17 respectively", the report said.
We believe company's newer launches of bikes across all segments will help company gain market share and insure its growth for near future. We believe BAL's differential offering in form and offer superior mileage and performance as compared to existing product in the segment is a game changer, the brokerage said
KR Choksey is bullish on UPL has recommended buy rating on the stock with a target price of Rs 842 in its research report dated November 02, 2016.
UPL is focused on emerging as a premier global provider of total crop solutions designed to secure the world's long-term food supply.
"UPL registered healthy revenue growth of 18%(YoY) to INR 34.7bn on the back of strong volume growth of 23%. EBITDA grew by 19% YoY to INR 5.7 bn, while margins improved by 60 bps to 18.8%. Although PAT grew by 19 % YoY to INR 1.6 bn, it was below our estimates due to forex loss of INR of Rs 375mn as part of other income and Rs 520 mn as part of interest cost", KRChoksey report said.
"The Company is a proxy for global generic crop protection and agro chemical markets. It has seen steady growth and maintained its market share in a competitive and uncertain environment. We believe stock will be rerated going ahead on back of good monsoon and new product launches. We expect revenues to grow by 14% CAGR for FY16- FY19. At CMP of INR 687, the stock is trading at PE of 16 x its FY16 EPS of INR 29.3 & 18 x its FY19 EPS of INR 46", the report added.
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