The US Federal Reserve has indicated that there could be as many as two interest rate hikes by the end of 2023. This saw some reaction in stocks across the globe, including India, though the losses have not been too severe. With the stock markets seeing losses for the third consecutive day today, here are a few stocks that investors should buy for the long term. We reiterate a stance of not investing lumpsum amounts given the nature of the markets currently.
Broking firm Motilal Oswal has suggested investors to buy the stock of Hindustan Unilever with a price target of Rs 2,780, which is about a 15% upside from the current levels.
The brokerage believes that best-of-breed analytics and execution capabilities (demonstrated via the successful implementation of its WIMI strategy, cost-saving plans, herbals, etc.) are key factors driving the pace of earnings growth.
"The strong outlook on rural, Glaxo Smithkline synergies, and sustained growth and premiumization in Skin Cleansing offer further medium-term tailwinds. We maintain our Buy rating with a 2,780 per share," the brokerage firm has said.
The shares of Hindustan Unilever were almost flat at Rs 2,420 on the NSE in trade today.
Motilal Oswal Sees the possibility of a 25% upside on the stock of tyre maker CEAT. The firm has set a price target of Rs 1700 on the stock as against the current market price of Rs 1,360.
The firm sees a demand recovery in the replacement segment in Jun'21. "After five years of weak demand, it expects growth to pick-up as a base adjustment has occurred. It plans to maintain leadership in the 2 wheeler segment (at 28-30%) and expand dominance in PCR (to 20% from 13-15% currently). In T&B, it aims to increase its market share in TBR to 13-15% (from 8% currently and take it to similar levels as in the TBB segment)," the brokerage has said.
"We expect revenue/EBITDA/PAT CAGR of 16%/15%/7% over FY21- 23E. Valuations at 10.5x FY23E consolidated Earnings Per Share doesn't fully capture ramp-up of new capacities in an improving demand environment, resulting in a recovery in margin. We maintain our Buy rating with a price target of Rs 1,700 per share (13 times March '2023 estimated consolidated EPS)," Motilal Oswal Institutional equities has said.
The shares of CEAT were last trading at Rs 1,359
Power Grid is another stock to buy according to Motilal Oswal Institutional Equities. According to the brokerage the reported net profits grew 9% YoY to Rs 120 billion in FY21. Adjusted for one-time rebate, net profits rose 17% YoY to Rs 129 billion in FY21. The company declared a final dividend of Rs 3 per share, resulting in a total dividend payout of Rs 12 per share in FY21.
Shares of Power Grid Corporation lost 2.5 in trade today and were last seen trading at Rs 235.85 on the National Stock Exchange.
Shriram Transport Finance
Shriram Transport Finance has done a good job in reducing the gross non performing loans ratio over the past year, according to the brokerage. " With the sharp rise in input costs, prices of new commercial vehicles are likely to go up and should have a consequent impact on used comercial vehicle pricing as well. This should aid disbursement growth as well as lead to lower LGDs. We have incorporated the recent capital raise in our estimates. Reiterate Buy, with Target Price of Rs 1,750 (1.6 times FY23E book value," the brokerage has said.
All of the above stocks are picked from the report of Motilal Oswal. Investing in stocks are risky and investors should do their own research. The author, the brokerage firm or Greynium Information Technologies is not responsible for any losses incurred due to a decision based on the above article. Investors should hence exercise due caution as markets have run-up significantly.