Motilal Oswal Institutional Equities has come-up with its basket of high conviction stock ideas, which can generate upto 15 per cent returns. Here is a list of 4 such stocks picked from the broking firms research report:
1. IPCA Labs
IPCA delivered a phenomenal performance led by: (a) HCQS led opportunity, (b) improving outlook for Domestic Formulations (DF), and (c) lower raw material cost. The brokerage firm expect an earnings CAGR of 31% (FY20-22), supported by: a) a sales CAGR of 20% in International Generics and 22% in API, b) heal thy outperformance by the DF segment, and c) 500bp margin expansion owing to a better product mix and operating leverage.
2. Exide Industries
According to the brokerage firm EXIDE should improve its market share as economic recovery led demand would come in from AUTO OEMs and the Industrial segment. Motilal Oswal Institutional Equities prefers EXIDE as it offers superior risk-reward considering its market leadership, technology alliances, backward integration and better product mix. The company is focusing on cost control measures and technology upgrades to improve its bottomline.
According to Motilal Oswal institutional Equities, Teamlease has an upside potential from current levels. The broking firm believes that as the economy unlocks gradually and enterprises look to dodge supply disruption, it believes the company/sector has already passed the peak of uncertainty. Encouraging rebound in the unemployment situation and the hiring outlook corroborate our view. As both the central and state governments look forward to liberalizing and formalizing the labor markets, TeamLease should be among the biggest direct beneficiaries.
4. AU Small Finance Bank
This is another small finance bank that reported healthy earnings led by robust treasury performance and controlled operational expenditure. The bank prudently made additional COVID-19 provisions and improved its PCR to 64%. Steady decline in moratorium book, reduction in SMA numbers and improving collection trend has eased pressure on asset quality.