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3 Yes Securities' Stock Picks After Q2FY21 Earnings With Upside Of Up To 39%
As Nifty and Sensex in today's session buoyed by positive global markets have hit new record highs and earnings from most corporate have been on anticipated lines or even better the momentum is expected to continue. And future direction in stock markets shall be governed by factors such as coronavirus situation globally as well as Brexit deal.
Here are the 3 Yes Securities recommendation post Q2 results
Manappuram Finance (Q2 FY21) – BUY (Target Rs225, Upside 38.8%):
For the September ended quarter, the gold financing NBFC company posted better than expected results on the back of strong growth in its gold loan business vertical which was clear from the tonnage figure which was way better than larger rivals. Also, other positives for the company had been the decline in financing cost as well as shift in product portfolio mix which resulted in margin expansion as well as lower provisioning.
But the negatives drawn out by the firm are lower collection efficiency in the CV and MFI space in comparison to peer companies. Nonetheless, we expect the company to post RoA of 5% in the current year owing to solid traction in the gold loan segment,
Brokerage firm Yes Securities has retained a ‘Buy' call on the stock with a 12 month unchanged price target of Rs. 225.
2. CreditAccess Grameen – Buy (Target- Rs. 810, Upside 19.4%)
For the September quarter, Yes Securities has termed the performance of CreditAccess Grameen Bank as soft. Profit came in line with estimates but the PPOP was down 15 percent owing to a dip in NIM and also a miss of 10% on NII and also more than expected decrease in consolidated assets under management of 5% QoQ.
Also, as the provisioning was already on the higher side in the previous two quarter, management took to less addition as collection efficiency improved and borrower were seen making repayments.
Besides FY22 shall largely turn out to be a normal year from growth aspect and credit cost shall too regularize. Further citing capital raise to the tune of Rs. 8 billion recently and regularized credit cost and with a valuation at 2.3x FY22 P/ABV, Yes Securities reiterates a ‘Buy' recommendation and upgrades price target to Rs. 810 per share.
3. Container Corporation of India (Q2 FY21) – ADD (Target Rs432, Upside 14%):
On the government backed transport and logistics firm, the company has given an ‘Add' call with a target price of Rs. 432, upside 14%. On the company's foray into new vertical as well as positive commentary on volume guidance, the brokerage has marginally increased its revenue and earnings estimated for FY21 and FY22.
Though the company has been a key beneficiary of Western Dedicated Freight Corridor or DFC commissioning, the land license fee issue remains a key monitorable.
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