4 Stocks That Could Be Attractive To Buy Next Week

It was a week that investors would not like to remember. Markets saw deep cuts with frontline bluechip stocks plunging. Here are a few stocks to buy next week that are being recommended by brokerage firms. We have picked stocks to buy largely from brokerage reports.

Castrol India

Sharekhan has set a price target of Rs 135 on the stock of Castrol India as against the current market price of Rs 105.55.

Castrol India Limited's Q1CY2022 revenue grew by 8.5%/13.3% y-o-y/q-o-q to Rs. 1,236 crore, which was in-line with our estimate as higher than expected lubricant sales volume of 59 million litres (down 3.3% y-o-y; up 14.6% q-o-q) gets offset by lower-than-expected blended realization of Rs. 209/litre (up 12.2% y-o-y; down 1.1% q-o-q) as the benefit of Rs. 12-20/litre price would be visible in Q2CY22.

"Recent under-performance of Castrol versus broader indices largely factors in margin concern and valuation of 11.7x/11x its CY22E/CY23E EPS is attractive. Strong cash balance of Rs. 1,600 crore, dividend yield of 5%, and RoE of 50% provides comfort to investors. We thus retain a Buy on Castrol India with a revised price target of Rs. 135," Sharekhan has said in its latest report.

Mahindra and Mahindra Financial Services

Sharekhan has set a price target of Rs 220 on the stock against the current market price of Rs 175. "The company reported better than-expected earnings largely on account of lower provisioning. Disbursements also picked up significantly with better collection efficiency signaling recovery in vehicle finance, which is encouraging. Further, management has unveiled its Vision 2025, which is expected to give it a fillip to deliver on earnings performance going ahead. Hence, given its strong liability franchise, leadership in rural financing along with strong parentage, the company is well on track to deliver on its aspirational goals. At the current market price, Mahindra and Mahindra Financial Services trades at 1.2x and 1.1x its FY2023E and FY2024E P/BV, respectively. Hence, we maintain our Buy recommendation on the stock with a revised price target of Rs. 220," the brokerage has said.

Exide Industries

Broking firm, mekay global has set a price target of Rs 175 on the stock of battery maker Exide Industries.

"Exide plans to set up a lithium ion cell manufacturing facility, in collaboration with a foreign partner (SVOLT of China). Any progress in this regard, such as the announcement of project plans/investments and tie-ups with OEMs for battery supplies, could provide clarity on the company's long-term survival and growth. Retain Hold with a target of Rs175," the brokerage has said.

According to it, the key downside risks include lower-than-expected demand in key geographies, an increase in competitive intensity and a further increase in commodity prices.

TVS Motors

Anand Rathi has set a price target of Rs 768 on the stock of TVS Motors. Q4 FY22 revenue grew 4% y/y, but q/q declined 3% to Rs55bn while volumes declined 8% y/y, 3% q/q, to 856,456 units. Semi-conductor shortages continued, impacted off-take of premium motor-cycles and scooters, 30% of the product mix. In EVs, iQube volumes were 2,500 units for Mar'22 and is now in 33 cities. A ramp-up is expected to 10,000 units a month by end-Q1 FY23. Positive feedback continues and the company has an order book of 12,000 units (6,000 last quarter). Management talked of 6-8 EV launches in the next two years.

"We expect a 20% revenue CAGR over FY22-24, and 33% earnings growth, leading to an EPS of Rs33.3. With volume recovery expected, we upgrade our rating to a Buy, with a higher target price of Rs 768 (22x FY24e), including Rs35 a share for TVS Credit Services," the brokerage has said.