FMCG And IT Stocks To Buy As Recommended By Brokerages

Brokerage firm, Prabhudas Lilladher has recommended accumulating the stock of FMCG major Hindustan Unilever, while Anand Rathi has recommended buying the stock of Mphasis.

Price target of Rs 2,915 on the stock of Hindustan Unilever

Prabhudas Lilladher expects HUL to witness month on month improvement in demand since June-21 aided by resilient rural demand and improving urban demand.

"Inflation in Palmoil and Crude is likely to pressurize margins, however the intensity will be likely lower than 1Q22. Calibrated price hikes will not be sufficient to ward off the inflation in input costs and higher intensity in ad-spends. We estimate 8% volume and 4% growth in realisations during 2QFY22. EBIDTA and PAT is estimated to grow at 9.4% (Rs.31.4 billion) and 9.3% (Rs 22.3 billion)," the brokerage has said.

"We believe worst is over in margin pressures led by higher prices and peaked out input costs. We estimate 15% PAT CAGR over FY21-24 and arrive at DCF based target price of Rs 2915. Although recent upsurge in stock price limits near term gains, we recommend accumulating Hindustan Unilever for Long term," Prabhudas Lilladher.

The stock of Hindustan Unilever was last seen trading at Rs 2,741 on the NSE.

Buy Mphasis stock, says Anand Rathi

Brokerage firm Anand Rathi has recommended buying the stock of Mphasis with a price target of Rs 3740, as against the current market price of Rs 3345.

Mphasis acquired Seattle-based Blink UX for $94m plus retention-payouts over the next two years. Founded in 2000, Blink is into customer research, user design and customer experience, essentially strengthening Mphasis' value proposition in engineering/product design and in customer-facing industries such as BFSI.

According to Anand Rathi, it brings a reputed set of clients (leaders across sectors) with whom it shares long-tenured relations. "The acquisition is consistent with both Mphasis' strategy and size (Blink is <3% of revenue, profitable). Revised estimates reflect higher D&A, lower other income, and retention payouts. In exchange, new clients and new services open up for Mphasis, offering longer growth potential. Reflecting this, we raise our target to Rs 3,740, at 45 times FY23 (from 35 times earlier)," the brokerage has said.

Disclaimer

Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage houses are not liable for any losses caused as a result of decisions based on the article. The above article is for informational purposes only.