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Motilal Oswal Initiates Coverage On NBFC Non-Lending Sector: Buy 7 Stocks For 58% Return

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Leading brokerage firm Motilal Oswal has initiated coverage on NBFC non-lending sector and picked 7 stocks to buy with AngelOne and ICICIGI remaining the top picks. The 7 stocks that have got buy rating are Angel One, CAMS, ICICI Lombard, ICICI Securities, IIFL Wealth & Asset Management, MCX, and Star Health. If you buy these stocks today, you will get maximum 58% return.

 

According to the analyst, "We remain positive on the long-term growth potential of the non-lending financials given their broader themes of financialization and digitization of savings. Our top picks in this space are ANGELONE and ICICIGI." Check key details below:

1. Buy Angel One

1. Buy Angel One

The analyst has assigned buy call to Angel One with target price of Rs 2100 apiece. The current market price of the small cap stock is Rs 1325 and if you buy Angel One at this price, you will get 58% upside potential.

The stock has given 379% return in last 5-years, 7% return in last 1-year, and declined 13% in last 3-months. The company has a market capitalisation of 11,023 crore.

According to Motilal, "F&O volumes continued to trend higher with Dec'22 being a new high. With interest rates decreasing, the spread on MTF book will decline."

2. Buy CAMS
 

2. Buy CAMS

Motilal Oswal is bullish on Computer Age Management Services Ltd (CAMS) and assigned buy call with a target price of Rs 2900 apiece. The current market price of CAMS is Rs 2221 apiece.

If you buy CAMS now, you will get 31% potential return. The company has a market capitalisation of Rs 10,872 crore.

According to Oswal, "While flows have softened during the quarter, MTM gains were healthy with Nifty gains of 6%. Share of equities continued to improve, which will be favorable for yields." The small cap stock has declined 21% in 1-year and given a return of 57% in last 5-years.

3. Buy ICICI Lombard

3. Buy ICICI Lombard

The analyst has maintained buy call for ICICI Lombard General Insurance Company Ltd with a target price of Rs 1500 apiece.

The stock will give a potential return of 19% if you buy it at the current market price of Rs 1258 apiece. The large cap stock has a market capitalisation of Rs 61,787 crore. It has given a return of 53% in last 5-years. The stock has fallen 13% in last 1-year.

According to Oswal, "Premium growth to be strong driven by health (more so the Group segment) and commercial lines. Integration of Bharti Axa and scale up of investments in the retail health channel will be the key monitorables."

4. Buy ICICI Securities

4. Buy ICICI Securities

Motilal Oswal has given buy call to the stock with a target price of Rs 610 apiece. The current market price (CMP) of the stock is Rs 494 apiece. If you buy the stock at CMP, you will get 23% return.

The company has a market capitalisation of Rs 15,975 crore. The mid cap stock has given a return of 19% in last 3-years and declined 36% in last 1-year.

According to the analyst, "Muted cash volumes will be offset by stronger F&O segment revenue. Investment banking revenue to remain flattish and profitability will be under pressure due to operating deleverage."

5. Buy IIFL Wealth Management Ltd

5. Buy IIFL Wealth Management Ltd

The analyst has assigned buy rating to IIFL Wealth Management Ltd with a target price of Rs 2300 apiece. If you buy IIFL Wealth Management now at CMP of Rs 1774 apiece, you will get 30% return. The company has a market capitalisation of Rs 15,792 crore. The mid cap stock has given 51% return in last 3-years, 17% in last 1-year, and declined 4% in last 3-months.

According to Oswal, Outlook on the new business ventures in terms of massaffluent segment and entry into new geographies will be keenly monitored. Overall yields likely to remain steady as we expect stable product mix QoQ.

 

 

6. Buy MCX

6. Buy MCX

The analyst has assigned buy call to Multi Commodity Exchange Of India Ltd with a target price of Rs 1750 apiece. If you buy the stock at CMP of Rs 1466 apiece, you will get 19% upside.

The company has a market capitalisation of Rs 7479 crore. The mid cap stock has given 59% return in last 5-years and 18% return in last 3-years. In last 1-year, it has seen a dip of 9%.

According to Oswal, "Options volumes continued to surge led by high volatility in commodity prices, especially, energy. Software costs pertaining to extension of 63 moons contract will be the needle mover for profitability during the quarter."

7. Buy Star Health

7. Buy Star Health

The current market price of Star Health and Allied Insurance Company Ltd is Rs 585 apiece and if you buy it at this price, you will get potential return of 33% as Motilal Oswal has assigned a target price of Rs 780 to buy Star Health.

It has a market capitalisation of Rs 34,031 crore.
The stock has fallen 23% in last 1-year and 18% in last 3-months.

According to Oswal, "Retail health premium growth likely to be strong at 15%+, group health to decline. Claims ratio to improve as monsoon-related claims receded leading to reduced frequency."

Disclaimer

Disclaimer

The stocks have been picked from the brokerage report of Motilal Oswal. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.

 

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