Stocks To Buy: 7 Large Cap Samvat 2079 Fundamental Muhurat Picks By Kotak Securities

The Sensex and the Nifty ended in the green for the sixth session in a row thanks to increases in the shares of powerful banking companies like Axis Bank. Ahead of Muhurat Trading on Monday, Kotak Securities picks 7 large cap stocks in its Samvat 2079 Fundamental Muhurat Picks Report. The brokerage has given a buy call to stocks namely Axis Bank, Cipla, DLF, Infosys, Mahindra & Mahindra, RIL, and SRF.

1. Axis Bank Limited

The brokerage said, "We like Axis Bank as a good business to own among the large banks. Axis Bank has converged on various operating metrics with its frontline peer. We could see convergence as we get more comfort on NIMs, liability and asset quality, cost structure. The bank has adequate buffer to manage any unexpected shocks. We look at Axis Bank as a franchise where further divergence in multiples between the frontline banks looks unlikely. Hence, the downside risk to own at current levels is quite limited, in our view. There is also a merger with Citi ahead for the bank where the integration (human resources) still needs to be done smoothly and a possible capital raise given the risk of goodwill markdown. We maintain our BUY rating with Fair Value of Rs. 960, valuing the bank at 2.1X book and ~22X June 2024E EPS (due to charges for Citi) for Return on equity of ~15% in the medium term."

The brokerage sees up to 7% upside from its current level considering the given target price i.e. Rs 960/share. On NSE, the stock gained 9.03% ending at Rs 900.40/share as compared to its previous close at Rs 825.85/share.

It has given positive returns of 12.48% in 1 week, 11.46% in 1 year, 26.9% in 3 years and 95.61% in the past 5 years, respectively.

2. Cipla Limited

According to the brokerage, Compelling US pipeline set to unfold. Details on complex US pipeline, reinforce our confidence on its ability. Plans gAdvair (an-inhaler) launch in Q3FY23 & gAbraxane (anti-cancer) launch in 4QFY23. Equal contribution from pricing and volume growth in India in FY2023. Key risk to our positive stance on Cipla can be delay in key US launches. Cipla is one of our top picks within India pharma space.

The brokerage sees up to 8% upside from its current level considering the given target price i.e. Rs 1,215/share. On NSE, the stock closed at Rs 1,134.75/share as compared to its previous close at Rs 1,136.80/share.

It has given positive returns of 2.33% in 1 week, 24.49% in 1 year, 155.49% in 3 years and 86.7% in the past 5 years, respectively.

3. DLF Limited

According to the brokerage, Robust sales, strong cash generation & debt reduction were highlights in FY22. Reported strong pre-sales in residential business of Rs7200 cr in FY22. Performance for FY23E will likely be contingent on continued launches of new residential projects, and improved leasing for commercial projects. Strong launch pipeline is expected to accelerate residential sales. DLF is confident to meet its launch target of 76 lakh sq. ft in FY23 and has planned launches of 92 lakh sq.ft in FY24E. Retail rentals have rebounded strongly post reopening of malls without restrictions. New developments could add 1.92 cr sq. ft to existing portfolio of DCCDL. Strong collections led to reduction in debt by Rs2300 cr to Rs2600 cr in FY22. "DLF has a land bank of 15 cr sq. ft in Gurgaon, which has among the fastest growing urban population in the country. Accelerated monetization of the residual land bank could add incremental value. We arrive at net asset value (NAV) of Rs 410/share for DLF," the brokerage has said.

According to the given target price of Rs 410/share, the stock is likely to give a return of 11% if purchased at the current market price. The stock on NSE closed at Rs 369.80/share as compared to its previous close at Rs 373.40/share.

It has given positive returns of 3.09% in 1 week. However, in 1 year, the stock fell by 9.16%, giving a negative return. Whereas, in the past 3 and 5 years, it has given multibagger returns of 119.01% and 111.01%, respectively.

4. Infosys Limited

According to the brokerage firm, Infosys will be at the forefront of driving the digital journey of clients. Low exposure to legacy services, solid digital credentials & ability to structure & win integrated & complex transformation deals are positives & will power industry-leading growth. Infosys can benefit from increased focus on cost takeout priorities by clients. Sufficient levers available to keep margins in 21-22% band. Infosys has raised revenue growth guidance to 15-16% from 14-16% earlier for FY23. EBIT margin can further improve as supply-side pressures ease. This will translate into strong EPS Compound annual growth rate over the next three years. Infosys' strength in managing the twin journeys of digital transformation and cost takeout will drive growth leadership. Maintain BUY rating, valuing the stock at 25x September 2024E EPS. Fair Value increases to Rs1,750 on rollover.

According to the given target price of Rs 1,750/share, the stock is likely to give a return of 17% if purchased at the current market price. The stock on NSE closed at Rs 1,500.50/share as compared to its previous close at Rs 1,500.90/share.

The stock in 1 week surged by 1.78%. However, in 1 year, it fell by 14.44%, giving a negative return. In 3 years, it gave 95.42% positive return. Whereas, in the past 5 years, it has given a multibagger return of 223.75%.

5. Mahindra & Mahindra Limited

Giving the investment argument, the brokerage said, "Given the strong order book on account of successful new launches, we expect the automotive segment to deliver a strong performance in the coming quarters. The company expects to lead the EV (electric vehicle) revolution in India through the three strategic pillars of brand, design and technology. M&M will be launching 5 born-electric EVs over the coming years with first launch in December 2024. We expect mid-single digit growth in tractor segment volumes, given normal monsoons and healthy reservoir levels. International farm subsidiaries continue to deliver steady performance despite a challenging macro environment. Our Fair Value of Rs1,500/share is based SoTP (sum-of-the-parts) basis. Attractive valuations and reasonable growth prospects drive our BUY rating."

The brokerage sees a potential upside of up to 20% from its current level considering the given target price i.e. Rs 1,500/share. The stock last traded at Rs 1,256.75/share on NSE as compared to its previous close at Rs 1,250/share.

The stock has given positive returns of 2.15% in 1 week, 40.11% in 1 year, 111.82% in 3 years and 82.7% in the past 5 years, respectively.

6. Reliance Industries Limited (RIL)

According to the brokerage, RIL can explore reorganization of the company into three independent entities for its three different business verticals. Reorganization will help the company in achieving three mutually linked objectives of (1) structure, (2) succession and (3) segregation. In our view, three independent listed entities for RIL will be in the areas of energy, retailing and telecommunications. "We assume RIL will list its retailing (Reliance Retail and related entities) and telecommunications (Jio Platforms and related entities) over the next 2-3 years. We assume all the three members of the next generation will be present on the board of RIL while actively managing a particular vertical at the same time. RIL has created significant value for investors by reinvesting into businesses. We expect earning per share to increase by 24.4% in FY23E and by 19.1% in FY24E. Sum-of-the-parts (SoTP)-based Fair Value is Rs. 2,980," the brokerage said.

According to the given target price of Rs 2,980/share, the stock is likely to give a return of 21% if purchased at the current market price. The stock on NSE closed at Rs 2,471.60/share, down 0.96% from the previous close of Rs 2,500.60/share.

It has given positive returns of 4.26% in 1 week. Whereas, in a year, the stock fell by 5.75%, giving a negative return. In the past 3 years, the stock has given 74.5% positive return. Whereas, on 5 years of investment, it has given a multibagger return of 171.63%.

7. SRF Limited

According to the brokerage, SRF announced a sharp step-up in capex plans (Rs15000 cr in the next five years), predominantly directed at the Chemicals segment, where demand remains robust and opportunities are ample. Fluorospecialties, fluoropolymers and aluminum foils will be key growth drivers. Refrigerant prices seen remaining firm amid supply-demand tightness in years to come. In the PFB segment, aluminum foils will be the key growth driver for SRF, riding on the tight demand supply scenario. "We expect strong growth in Chemicals to continue, backed by the surge in capex. The large addressable opportunity ahead of the company and the proven execution track record of management underpin our positive bias. Value SRF on SoTP (Sum of The Parts) and arrive at a fair value of Rs 2,830," the brokerage has said.

The stock is likely to give a return of 12% if purchased at the current market price, considering the given target price of Rs 2,830/share. The stock on the NSE last traded at Rs 2,544/share as compared to its previous close of Rs 2,576.10/share.

The stock surged by 1.76% in a week. Whereas, in a year, it surged by 11.97%. In the past 3 years, the stock has given 371.56% multibagger returns. It has given 668.01% of massive multibagger returns in the past 5 years.

Disclaimer

The stocks have been picked from the brokerage report of Kotak Securities. 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 making any investment decision.