Market benchmarks, the BSE Sensex, and NSE Nifty traded in the green on Thursday, many equities gained more than 15% amid robust buying in frontline bluechip companies.
On Thursday, a day of weekly F&O expiry, the domestic equities markets BSE Sensex and Nifty 50 were trading at new record highs. The BSE Sensex crossed 61,000 for the first time, and the NSE Nifty crossed 18250 for the first time. While Motilal Oswal brokerage is betting on the stocks of PB Fintech and Tata Motors.
Leading the digital insurance and credit marketplace
In FY08, PB Fintech Limited began operations as an insurance web aggregator. It then moved into the credit sector to provide easy access to credit and other financial goods. Despite the fact that the company is not listed on the exchange, the brokerage has conducted research on it.
Using the power of technology, data, and creativity, the company has built India's largest online marketplace for insurance and financing products. The company provides online insurance and loan product purchases based on research. It also makes it easier for partners to innovate and create personalised products for customers by exploiting substantial data insights.
Target and Valuation: Investment arguments and growth driver
Customers remember PB Fintech because of its overwhelming market share and great brand recall. As a result, it has become the go-to place for comparing and researching financial goods. This has allowed it to build a big customer base, as well as draw repeat business from existing consumers, thanks to its excellent product offering.
"We estimate a revenue CAGR of ~40% over FY21-24, led by 42% growth in premium income. We project the EBITDA / contribution margin to expand to 4.8%/52.1%. PB Fintech would continue to invest in the business, which would support the growth momentum. This coupled with improving operating metrics, would enable the company to trade at higher multiples.
Thus, at proposed valuations of USD5-6b, the implied P/Sales multiple corresponds to 16-19x on FY24E. We believe that lower penetration, along with the adoption of digital channels, would be the key growth driver over the medium term," the brokerage has said.
Motilal Oswal sees a nearly 11% upside on the stock of Tata Motors from the current market price The firm has set a target price of Rs 460 on the stock.
JLR's 2QFY22 wholesale volumes (including CJLR JV) fell 14% YoY to 78.25k units. Jaguar wholesales down 23% to 13.9k units while LR fell 12% to 64.3k units. This indicates that the mix is weaker than expected.
Looking ahead, the chip shortfall will continue to be dynamic and difficult to predict; nonetheless, the business anticipates the shortage to ease progressively over the next 12 months.
Valuation and view on Tata Motors
"All of TTMT's three businesses are on the path to recovery. While the India CV business would see cyclical recovery, the India PV business is undergoing structural recovery. JLR is also witnessing cyclical recovery, supported by a favorable product mix. However, supply-side issues would defer the recovery process. While there would be no near-term catalysts from the JLR business, the India business would see continued recovery. The stock trades at 11.9x FY23E consol. EPS and 2.3x P/B. Maintain Buy, with Target Price of Rs 460 (Sep'23E SOTP-based), the brokerage has said.
Mr Lennard Hoornik, Jaguar Land Rover - Chief Commercial Officer, stated, "The global semiconductor supply issue represents a significant near-term challenge for the industry which will take time to work through. However, it's encouraging we were still able to grow sales of the Land Rover Defender in Q2. Moreover, we are delighted to have a record Company order book demonstrating the underlying demand for our products which we will satisfy when the semiconductor supply recovers."
The above 2 stocks to buy are picked from the report of Motilal Oswal. Please note investing in stocks is subject to market risks and one needs to be cautious at this point of time as markets have gone-up sharply. Neither the author, nor Greynium Information Technologies Pvt Ltd would be responsible for losses incurred based on a decision made.