Broking firm Sharekhan has recommended buying the stocks of Bajaj Finance, Gland Pharma, and IT company Mastek. The brokerage sees good upside on the stocks for medium term returns. However, one must note that stocks have already rallied a bit and hence, investors must adopt cautious before buying into some of them.
Sharekhan believes that Mastek is expected to clock an earnings CAGR of 24% over FY2021-FY2024E, led by strong growth in the UK public sector. According to the brokerage the company delivered a very strong set of results, with better-than-expected performance on all fronts.
Sharekhan says that Mastek would leverage Evosys clientele for cross-sell opportunities and its management remains confident that the UK private sector's growth rate would match the company's growth rate in coming years.
"Given huge opportunities in the cloud migration space, healthy deal pipeline, and opportunity in SAP compete market, we believe that Evosys would report another year of strong growth in FY2022. With an improvement in average deal sizes, strong deal wins and higher spends on digital and cloud transformation, we expect Mastek is likely deliver strong revenue growth of 25.8% y-o-y in FY2022," Sharekhan has said.
"Given a healthy balance sheet and strong order bookings, we maintain a Buy on Mastek with a revised price target of Rs 2,950," the brokerage adds.
Sharekhan also has a buy call on the stock of Gland Pharma. According to the brokerage, the company reported a strong performance for Q1FY22 and results were ahead of estimates. The sales and PAT reported a growth of 30.5% and 12% YoY respectively.
According to Sharekhan, new capacities and ramp up in Covid drugs were key positives for the company.
"Strong growth in the RoW and India markets, double digit growth in the Core markets and Vaccine led opportunities would be the key growth drivers for company. Strong domain expertise and growth prospects, sturdy earnings track record and strong financials are the key positives for Gland Pharma," the brokerage has said.
"At the current market price, the stock trades at 47.3x/30.8x its FY2022E/FY2023E EPS. Strong domain expertise and growth prospects, sturdy earnings track record, and strong financials are key positives for Gland. We retain our Buy recommendation on the stock with a revised target price of Rs. 4,400," the brokerage has said.
Buy Bajaj Finance stock, says Sharekhan
Bajaj Finance is among the top NBFCs in the country with a strong presence in retail lending. Sharekhan believes the business transformation steps that are underway for Bajaj Finance, would not only be positive for business sustainability, scalability, but also position Bajaj Finance to take advantage of a strong economic upturn expected in FY2022E.
Sharekhan says that the company is armed with factors such as a strong balance sheet, robust risk management, and prudent management. "Bajaj Finance is a strong franchise for the long term and is well-placed to ride over medium-term challenges. We maintain our Buy rating on the stock with an unchanged price target of Rs. 7,000," the brokerage has said in its latest report.
Bajaj Finance shares were last trading at Rs 6,100 on the National Stock Exchange. This means there is a potential upside of at least 15% from the current levels.
Investing in stocks is risky and investors need to be cautious. Neither Greynium Information Technologies Pvt ltd nor the author, nor the brokerage house mentioned would be responsible for any losses incurred based on decisions made from the article. Investors are also advised caution as the markets are now at a record high. Please consult a professional advisor and avoid investing lumpsum amounts.