5 Stocks To Buy Which PL Has A “Buy” Call Ahead Of Results

Markets saw some selling pressure late last week on constant unwinding from Foreign Portfiolio Investors. Here are a few stocks that Prabhudas Lilladher has a "buy" call on from across various industries.

Buy Bajaj Finance Stock, says Prabhudas Lilladher

Prabhudas Lilladher has stated that as per the company's business update, AUM growth in Q3'23 was strong at 5.7% QoQ (marginally below our expectation of 6.5%). Customer franchise as of Dec 31, 22 was 66.0 million (+19.1% YoY/+4.9% QoQ). New customers for Q3'23 stood at 3.1mn (+19.2% QoQ).

"The omni-channel platform will provide a fully-integrated, seamless experience for customers to navigate between online and offline channels in a smooth manner and enable BAF to be preferred interface for users. Full roll-out of omni channel platform by FY23 will provide a fully-integrated, seamless experience for customers with improved UI/UX platform, upgraded web experience and increased penetration of Super App. Bajaj Finance has seen good traction in the non-captive two wheeler financing business launched in July. We recommend 'BUY' on Bajaj Finance at target price of Rs 8,953 (target price unchanged)," the brokerage has said.

Buy Cholamandalam Investment and Finance

According to Prabhudas Lilladher, Cholamandalam Investment and Finance is expected to post strong QoQ AUM growth of 5% on the back of strong M&LCV, used vehicles and consumer/SME loans. "Truck utilization levels have improved and fuel prices stabilizing have led to increase in profitability for operators. New business (consumer and MSME segments) disbursements saw strong traction in Q2'23 and we expect it to continue in Q3'23. We can see margin protected sequentially on the back of strong growth in higher yield portfolio. Recommend 'BUY' at target price of Rs 792 (target price unchanged)," the brokerage has said.

Buy Jubilant Ingrevia with a target price of Rs 850

Prabhudas Lilladher believes Jubilant Ingrevia is well placed to capitalize on long term growth opportunities with capex outlay of Rs 20.5 bn over FY22-25E (of which Rs 9 bn is committed).

"Strong balance sheet (Net Debt/Equity at 0.1x) despite Rs18 bn cash outflow on capex over FY23-25E and earnings mix improvement led by higher value and structural growth segments (SPCM + NHS) will drive rerating in the stock, in our view. Reiterate 'Buy' at SoTP based target price of Rs 860 (implied 13x Sep'24 EV/EBITDA and 22x Sep'24 PE)," the brokerage has said.

Fine Organics

On Fine Organics, Prabhudas Lilladher says that growth prospects look encouraging given healthy demand traction, aided by improved client confidence and global consolidation benefits capacity headroom facilitating demand tapping in FY23 3) strong profitability over FY23-25 on optimum product mix and operating leverage playing out net cash BS and
healthy OCF of Rs14bn over FY23-25 to enable self-funded capex.

"Maintain 'Accumulate' at target price of Rs 7000 (40x FY25E EPS )," the brokerage has said.

Nocil: Accumulate

On Nocil stock, the brokerage does not have a "buy" call but an accumulate. "NOCIL is well placed to capitalize on growth opportunities given (1) sufficient capacity headroom to capture demand improvement expected from tyre industry capex; its Dahej facility can accommodate another plant (2) Europe+1 scenario possibility, given continued energy challenges (in addition to China+1) (3) calibrated price pass through, as raw material prices moderate net cash balance sheet and robust FCF generation of Rs 5.9 bn over FY23-25E. Maintain 'Accumulate' at target price of Rs 275 (18x FY25E EPS of Rs15.4)," the brokerage has said.