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2 Stocks To Buy Post Quarterly Numbers As Recommended By Prabhudas Lilladher
Post its quarterly numbers, broking firm Prabhudas Lilladher has recommended buying the stocks of Dmart and HDFC Bank. Here are some reasons the brokerage is upbeat on these stocks.
Buy HDFC Bank post quarterly numbers, says PL
According to Prabhudas Lilladher, HDFC Bank saw a good quarter with core PAT of Rs 118bn beating PLe by 6% led by stronger NII and other income (excl. treasury) while provisions were lower.
"NIM was higher by 11bps at 4.84% due to superior yields driven by faster asset repricing, while cost of funds was a tad lesser. Retail wholesale mix improved QoQ from 43:57 to 45:55 led by stronger retail accretion (due to healthy consumption spends) and de-growth in corporate (owing to pricing pressure and widening bond spreads)," the brokerage has said.
HDFC Bank: Raise target price to Rs 1850
Prabhudas Lilladher has said in its report that the retail deposit accretion was strong at 5% QoQ and its share is now 84% (80% in Mar'22). Bank added 684 branches in Q3FY23 while it intends to add 600 more branches in Q4FY23 which would keep opex elevated. "We upgrade FY23 earnings by 3% led by higher NII and lower provisions. Valuation is at 2.6x Sep'24 core ABV. Maintaining multiple at 3.0x, we raise target price to Rs 1,850 from Rs 1,800. Retain BUY," the brokerage has said.
DMART target price revised to Rs 4675
Prabhudas Lilladher has cut EPS estimates of D'Mart by 4.2/4.3/4.0% for FY23/24/25 and target price to Rs4675 (Rs4854 earlier) following disappointing margin performance in 3Q23 (106 bps YoY EBIDTA margin decline to 8.3%). "Mix deterioration due to tepid growth in Apparel and general merchandise impacted margins. Cost of retail also moved up by 50bps YoY as operating leverage failed to benefit in a festival quarter. We believe high inflation has impacted the discretionary spends in 3Q which surprisingly impacted even a deep value retailer like D'Mart. While grocery centric D'Mart Ready ramp up and competition could be other reasons, but we remain confident of the business moat of D'Mart, both in offline and D'Mart ready model," the brokerage has said.
Disclaimer
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