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For 20-22% Returns, Buy These Stocks For 1-Year, Says Emkay Global
Markets hit a new historic high this week once again, as investors continued to bet on stocks. Dr. Joseph Thomas, Head of Research, Emkay Wealth Management says, "The market strength was well supported by IT, Metal and Pharma stocks. The healthy set of earning numbers from IT majors buoyed sentiments. Even as the FIIs remained net sellers, the markets received support from DIIs. Overall the sentiment is positive as there has been a robust start to the earnings season by the IT companies.
For the coming week as well the focus would remain on earnings and this factor may dictate the market direction. On the global front the factors to monitor would be macro-economic data coming out of US, such as Housing Starts and Jobless claims." Here are 2 stocks that are a buy from broking firms Emkay Global and one from broking firm Sharekhan.
TVS Motors
Broking firm, Emkay Global has a buy rating on the stock of 2-wheeler major TVS Motors. The brokerage firm sees a 20% upside on the stock and has set a price target Rs 710 on the stock. The firm believes that electrical vehicles penetration is likely to increase over the medium term and also expects positive gross margin for iQube by FY22-end. TVS Motors currently sells its iQube electric scooter in cities such as Bengaluru, Chennai, Coimbatore, Delhi and Pune.
Led by higher scale, management expects positive gross margin by the end of FY22.
"Domestic 2-wheeler volume outlook is positive and premium motorcycles/scooters could outperform going ahead. In addition, the export outlook is encouraging across most markets on higher commodity prices and better forex availability for importers. We expect a volume CAGR of 14% over FY21-24E. We build in robust revenue/earnings CAGRs of 17%/39% over FY21-24E. We recommend Buy with a target price of Rs 730, based on 25x FY23E EPS and value of TVS Credit Services at Rs 25 per share," the brokerage has said.
The shares of TVS Motors were last seen trading at Rs 611 on the BSE.
Bandhan Bank
Renowned brokerage firm, Emkay Global Sees A 22% upside on the stock of Bandhan Bank and has recommended a buy on the stock of the bank with an upside target of Rs 390, as against the current market price of Rs 322 on the shares.
According to the brokerage, the announcement of loan relief scheme for MFI borrowers in Assam which incentivizes credit discipline/repayment rather than a blanket waiver should be largely positive for Bandhan Bank.
"Notwithstanding near-term asset-quality risk, we have a Buy rating with a price target of Rs 390 on the stock, given its strategy of diversifying asset portfolio away from MFI in terms of both products and geography, enviable liability profile, superior return ratios (RoA/RoE of 2.5- 3.4%/17-25% over FY22-24E) and reasonable valuations (2.2x FY23E ABV/1.7x FY24E ABV)," the broking firm has said. The shares of Bandhan Bank were last trading at Rs 310 on the Bombay Stock Exchange.
Wipro
Brokerage firm Sharekhan, which is one of the top retail brokers in the country has placed a "buy" call on the stock of IT major Wipro. The firm sees a number of reasons to invest in the shares of the company. Some of the factors to be buying the stock according to Sharekhan is strong growth in top accounts, a healthy deal pipeline and rising spends on digital transformation initiatives.
The firm has also highlighted some key negative as well, including attrition inched up 340 bps q-o-q to 15.1% and the deal win in TCVs, which declined 49% q-o-q to $715 million.
"Wipro is expected to be back on track to report above industry-average organic revenue growth in FY2022E after many years of stagnant financial performance and reduce the gap with its large peers. At the current market price, the stock is trading at 25x/22x/20x its FY2022/FY2023/FY2024 earnings estimates. Given the company's strong focus on growth acceleration, we maintain a Buy rating on Wipro with a revised target price of Rs. 670," the brokerage has said.
Disclaimer
Investing in stocks is risky and investors need to be cautious. Neither Greynium Information Technologies nor the author, nor the brokerage houses would be responsible for any losses incurred based on decisions made from the article. Investors are also advised caution as the markets have closed at an historic high.
