Two stocks from the Financial Services Sector include SBI Life Insurance and Fusion Micro Finance to buy as recommended by HDFC Securities and ICICI Securities. The brokerage has assigned buy on the stock with attractive valuations for decent returns of up to 46% if purchased at the current market price. Check the details below:
SBI Life Insurance Ltd. (SBILIFE)
HDFC Securities has assigned a "buy" on the stock of SBI Life with a target price of Rs 1,850 apiece. According to the given target price, if you buy the stock at the current market price (CMP), it is likely to give return up to 46% from its current level.
The shares of SBI Life last traded at Rs 1,270.20 apiece on NSE, down 1.71% from its previous close of Rs 1,295.40 apiece. Its 52-week high is Rs 1,340.35 apiece and the 52-week low is Rs 1,003.50 apiece, respectively.
In the past 1 week, the stock has fallen 1.94%, whereas it gained 3.97% in the past 1 month. It gained 3.94% in the past 1 year and in 3 years it gained 27.35%, respectively. In the past 5 years, it gave the highest return up to 81.22%. SBI Life is an SBI Group's large-cap company that operates in the Life Insurance sector. It has a market capitalisation of Rs 1,27,430 crore.
According to the brokerage firm, SBILIFE's adj. VNB came in 3% below the estimate at INR14.5bn (+19% YoY), as VNB margin moderated 483bps QoQ to 26.6% on the back of a higher share of ULIPs in the mix (65%). "While the management continues to remain upbeat about growth in the NPAR savings business (+3% QoQ), we continue to watch out for stronger sequential trends. The company's three growth levers stay in place: (1) SBI's massive distribution network (24k+ branches); (2) a healthy mix of protection and NPAR; and (3) the lowest opex ratio among peers (9MFY23: 9.7%). We expect SBILIFE to deliver a healthy FY22-25E APE/VNB CAGR of 17/22% and retain BUY with an unchanged TP of INR1,850 (3x Sep-24E)," the brokerage has said.
Fusion Micro Finance Ltd.
ICICI Securities has placed "Buy" on the stock of Fusion Micro Finance with a target price of Rs 600 apiece. The brokerage with the given target price is likely to fetch return up to 46% if purchased at the current market price.
The shares last traded at Rs 412.80 apiece on NSE, up 1.11% from its previous close of Rs 408.30 apiece. The stock's recorded 52-week high on NSE is Rs 321.10 apiece and the 52-week high is Rs 421.90 apiece, respectively.
The stock was listed last year on 15 November 2022. Since its listing, the stock has given 27.09%. The stock gained 2.15% in the past 1 week and 17.27% in the past 3 years, respectively. Fusion Micro Finance is a small-cap financial sector company that operates as an NBFC (Non-Banking Financial Company). It has a market capitalisation of Rs 4,154.04 crore.
According to the brokerage firm, Fusion Microfinance, with a decade-long experience in MFI lending space, well-diversified portfolio and stable management team, is likely to emerge as a preferred player to play on India's financial inclusion story. "We initiate coverage on Fusion with a BUY rating and target price of Rs600, valuing the stock at 2x FY24E BVPS. Stock is currently trading at 1.4x, >40% discount to CA Grameen's FY24E PBV multiple at 2.5x. Considering likely similar return profile for CA Grameen and Fusion over FY24/25E, we believe valuation gap would narrow down gradually," the brokerage has said.
The stocks have been picked from the brokerage reports. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.