6 Stocks Brokerages Are Recommending For Diwali

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From the last festive season to this festive season markets have gone nowhere. Of course, the stand-out performers have been the midcaps and small caps, which have been soaring.

Doing a little more analysis, we realize from last year at the same time, investors have dumped IT stocks and bought into the banking sector.

Even as we write, IT stocks like Infosys have slumped to a new 52-week low of Rs 995. Wipro has followed Infosys to hit a 52-week low. However, brokers come-out with their tips during the season and here are a few stocks that they are recommending to buy.

HCL Technologies

HCL Technologies is a stock that is being recommended by Centrum. The brokerage firm has placed a buy call on HCL Technologies with a target price of Rs 980. Currently, stock price is trading at Rs 774 on the NSE. 

"HCL Tech delivered steady 2QFY17 results with EBIDTA margin beat aiding in PAT beat. However, USD revenues were tad below our estimates. Management retained revenue growth guidance of 12-14% in cc (11-13% in USD) as well as retained EBIT margin guidance (19.5-20.5%) for FY17", the research report said.

ICICI Direct is recommending HCL Technologies with a target price of Rs 950 in its research report.

Granules India

Granules India is recommended stock by brokerage firm KR Choksey. The target price of Granules India set by KR Choksey is Rs 160. Currently, the stock price is trading at Rs 121.45 on NSE.

"Net sales for the quarter grew by a moderate 3.1% YoY to INR 3,638mn below our estimates. EBIDTA grew by 10% YoY to INR 742mn with EBITDA margins at 20.4% expanding by 100bps mainly on account of superior product mix, enhanced operational efficiency in base business, and coupled with high value of Finished dosages as a % of overall sales in the quarter and Ibuprofen Rx revenues. PAT grew by 27% YoY to INR 408mn", KR Choksey report said.

Granules India Limited is an Indian pharmaceutical manufacturing company based in Hyderabad, India.

LIC Housing Finance

LIC Housing is recommended by K R Choksey with a target price of Rs 756. 

Check stock quote LIC Housing.

"Q2FY17 proved to be steady quarter for LIC Housing Finance (LICHF) characterized by stable loan growth and asset quality, margins expansion and lower provisions. PAT at INR 7.91 bn (v/s 7.7 bn estimate) stood robust 20.2% Y-o-Y growth largely driven by lower than anticipated provisions (down 74% Q-o-Q, flat Y-o-Y), controlled opex (cost/income down 103 bps Q-o-Q to 14.7% ; lowest among the peers) and higher margins (at 2.68% in Q2FY17 from 2.61% a quarter ago), the report said.

The overall loan growth stood steady at 15% Y-o-Y; with repayments declining albeit marginally during the quarter. 


DB Corp

ICICI Direct has placed a buy on the DB Corp stock with a target price of Rs 455 in its research report. 

The stock is also recommended by Centrum with a target price of Rs 455 in its research report.

"DB Corp's print advertisement revenues came in at Rs 330.3 crore, up 7.3% YoY, in line with our expectations as the company is recovering its lost ad volumes owing to price hikes in the last fiscal. EBITDA came in at Rs 150.5 crore vs. expectations of Rs 154.7 crore with EBITDA margins at 28.5% vs. 29.3% (estimated) owing to slightly higher employee expenses", ICICI Direct said in its research report.


KPIT Technologies

Centrum is bullish on KPIT Technologies and has recommended a buy with a target price of Rs 180 in its research report.

"KPIT Tech delivered a topline beat in 2QFY17 led by strong traction in Products and Platforms business (~4.5% of total revenues). EBIDTA margin and PAT were above our expectations. While management guided that 3QFY17 would have an impact of seasonality (lower number of working days), it still aims to deliver modest sequential growth led by ramp up of new deal wins", Centrum report said.


Reliance Industries

Reliance Industries has been recommended by brokerage firm KR Choksey. Target price of Reliance Industries set by KR Choksey is Rs 1,285.

Currently, the stock price is trading at Rs 1,050 on the NSE.

" Reliance Industries Ltd (RIL) reported net profit of INR 71940 mn, exceeding market expectation. Net profit increased 1.5% QoQ and declined 22.1% YoY; QoQ rise is mainly on account of stable refining margins and higher production from refining and petchem segment. GRMs stood at USD 10.1/ barrel compared to USD 11.5/ barrel in Q1FY17 and USD 10.6 in Q2FY16", the report said.

We believe over the medium to long term refining margins to remain range bound as capacity additions though it is delayed will eventually match the demand growth, added further.

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Story first published: Friday, October 28, 2016, 10:09 [IST]
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