As concerns about the Covid-19 reopening interruption and China's regulatory crackdown faded, Asian equities and US share futures rallied. In this environment, Indian stocks appeared to be on track for a strong start to the day. Investors will absorb the RBI MPC meeting this week, which could lead to a tumultuous session in the markets. Here are a few equities recommended by ICICI Securities for strong returns.
3 Stocks To Buy For Strong Returns, Says ICICI Securities
|Stocks||Current Market Price||Target Price||Upside Potential|
|Marico||Rs 548||Rs 630||15%|
|Shoppers Stop||Rs 273.50||Rs 310||17%|
|Oberoi Realty||Rs 705.50||Rs 830||23%|
Buy Marico, Says ICICI Securities
Marico is a prominent FMCG company with products in the hair oil, edible oil, meals, and personal care categories.
In its most recent research, broking firm ICICI Securities advised investors to buy Marico stock.
According to the broking firm, Marico reported strong sales increase in the first quarter of FY22. Sales increased by 31.2 percent year over year due to robust volume recovery and price increase. However, the resulting PAT was Rs 365 crore (down 5.3 percent YoY).
|Current Market Price||Rs 545.30|
|Target Price||Rs 630|
According to ICICI Securities, Marico's goal is to create 450-500 crore in sales with its digital-first brand by FY24. E-commerce channels have grown by 61 percent and currently account for 9% of all domestic sales. In both urban and rural areas, the general trade channel rose by 17%.
"Marico's share price has given 84% return in the last five years. We roll over FY24 numbers with expectations of a full recovery in all segments and stabilisation of commodity prices. We continue to maintain our BUY rating on the stock Target Price and Valuation: We value the stock at Rs 630 on ascribing 50x FY24 earnings multiple", ICICI Research has said.
"The company is leveraging its existing brands & tailwind in healthy foods habits to grow the category. We believe newer subcategories within foods, digital-only brands would be driving the growth for the company in the future. We remain positive on the company. We value the stock 50x FY24 earnings with the target price of Rs 630/share & BUY recommendation," the brokerage has said.
Buy Shoppers Stop, Says ICICI Securities
Shoppers Stop (SSL) is one of India's largest department stores, and it has undergone a number of structural changes with the goal of increasing its share of private label brands and expanding its beauty portfolio, as well as accelerating growth through digital channels and providing a better shopping experience through "personal shoppers."
Broking firm, ICICI Securities has suggested buying the stock of Shoppers Stop with an upside target of almost 17% from the current levels.
|Current Market Price||Rs 273|
|Target Price||Rs 310|
According to the brokerage, Covid induced lockdowns significantly disrupted the quarter but headline numbers beat consensus estimates. Revenue de-grew 70% QoQ to Rs 201.1 crore. The company achieved operational cost savings worth Rs 140 crore.
"The stock price has underperformed the broader indices over the last five years on account of weak SSSG, muted store addition pace and lower share of private label brands. With the new management team in place, we expect SSL to revive its revenue trajectory and margin profile. Reasonable valuations prompt us to be positive on the stock and maintain BUY Target Price and Valuation: We value SSL at Rs 310 i.e. 8x FY23E EV/EBITDA," the broking firm has said.
Buy Oberoi Realty, Says ICICI Securities
The brokerage has set a target of Rs 830 on the stock of Oberoi Realty, as against the current market price of Rs 672.
According to ICICI Securities, ORL reported weak Q1FY22 results as expected. The company recorded a sales volume of 0.9 lakh square feet out of Q1FY21's basis, but down 91 percent QoQ) owing to the second wave's impact. The sales value was up 5.9 times year over year but dropped 91 percent quarter over quarter.
|Current Market Price||Rs 698.35|
|Target Price||Rs 830|
"ORL's share price has grown 2.2x over the past five years. We maintain our BUY rating on the company Target Price and Valuation: We value ORL at Rs 830/share," the brokerage has said.
"While Q1FY22 was a washout, we expect sales momentum in FY22 to be as robust as FY21, driven by new launches in Thane and subsequent phases of Borivali/Goregaon. Thus, we maintain BUY with a revised target price of Rs 830/share," the brokerage added.
Investing in stocks poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage houses are not liable for any losses caused as a result of decisions based on the article. Investors should take care because the markets are near record highs.