Markets are not exactly cheap at the current levels. The trailing p/e for the Sensex still continues to be near the 23 levels. It maybe time to exercise caution before buying into shares. Here are a few stocks being recommended by brokerages, which could be worthy picks.
ICICI Prudential Life
Motilal Oswal has recommended a "buy" on the stock of ICICI Prudential Life with a target of Rs 489 on the stock.
"Owing to improved profitability the company's sensitivity to tax-rate has also reduced significantly while dominance of customer friendly ULIP product has helped insulate it from potential regulatory changes on traditional products," the broking firm has noted.
"We value ICICI Prudential Life using the embedded value methodology and estimate the company to deliver new business value of Rs 20.4 billion in FY20E, while operating RoEV remains healthy at 19.5%. We value IPRU at Rs 684.6 billion using P/EV multiple of 2.7x (implied new business multiple of 21x). This implies a price target of Rs 480 per share - an upside of 23%. We thus initiate coverage with a BUY rating," Motilal Oswal has said in its recent research report.
Centrum Broking is bullish on the stock of Exide Industries and has suggested a buy rating on the stock. The research firm sees many reasons to recommend the stock, including strengthening dominance in replacement market, prominent brands and emerging segments, which will drive growth for the company.
"We believe that the recent efforts will continue to have a positive impact on the company in terms of market share and expect EBITDA/PAT CAGR of 17.9%/18.9% over FY2018-20E, led by revenue growth of 13.5%. We value core business on five year AOCF/EV yield methodology at Rs 279 per share and assign Rs 43 per share for life insurance business to arrive at a TP of Rs322. Key risks for the company include margin pressure due to high lead volatility and faster than expected EV penetration," Centrum has said in a report.
Shankara Building Projects
Kotak Securities is bullish on the stock of Shankara Building Projects.
"At current price of Rs 1711, Shankara Building is trading at 32.2x P/E and 17.3x EV/EBITDA on FY20 estimates. We continue to remain positive on the company as it is likely to benefit from increasing shift towards organized retail in home building segment.
The company is witnessing improved traction in the retail segment with better than expected margins, addition of more brands and addition of large format stores at low rentals.
We maintain our estimates and price target of Rs 2017 based on 23x EV/EBITDA for retail business and 8x EV/EBITDA for channel and enterprise business. Owing to adequate upside from the current levels, we upgrade the stock to buy from accumulate earlier," the firm has said in its report.