Stocks To Buy As Suggested By Prabhudas Lilladher

Markets are now very close to record levels, with the Sensex set to cross the 62,000 levels all over again. Here are a few stocks that Prabhudas Lilladher has a buy call on.

Muthoot Finance

Muthoot Finance recorded muted loan growth (1% QoQ growth and 3.8% YoY growth) to Rs 572bn (Ple:Rs 584bn) as gold loan AUM grew by 0.6% QoQ to Rs 565bn. Last quarter there was a 2.4% QoQ de-growth in gold loan AUM. Yields improved marginally (up by 8bps QoQ to 17.38% due to discontinuation of teaser rates). PAT at Rs 8.6bn (up 8.1%QoQ and down 12.8% YoY) came above our estimates of Rs 8.2bn on account of lower opex which was down 16.8% QoQ and up 2.8% YoY at Rs4.5bn(Ple:Rs5.5bn). Write back of provisions to the tune of Rs 0.12 bn also aided PAT. Higher yields resulted in rise of NIM to 11.0% vs 10.7% in Q1'23.

"We have maintained our EPS estimates for FY23 and FY24 as we expect yields to improve from 17.38% to 18-19% in the coming quarters as teaser loans have been re-priced and it looks like yields have bottomed out. We have maintained a 14% CAGR in gold AUM book from FY22-24. Our core book multiple stands at 2.6x PABV Sep'24E. Subsequently our SoTP is maintained at Rs. 1,431. Reiterate BUY," says Prabhudas Lilladher.

Eicher Motors: Buy for a price target of Rs 4190

Eicher Motors remains our preferred pick in the 2W space as we anticipate (1) volume growth from new product launches, (2) rising export volumes from channel expansion (~21% export volume CAGR over FY22-25E) and (3) margin expansion (600bps over FY22-25E) led by improved operating leverage, better realization from export markets and reduction in raw material costs. "We trim our EBITDA margin estimates by 20/30/20bps for FY23/24/25E to factor in moderation in ASPs. Maintain 'BUY' with a revised SoTP based target price of Rs 4,190 (at 28x Sep-24E standalone EPS and 12x Sep-24E EV/EBITDA for VECV)," Prabhudas Lilladher has said.

ENIL: Hold the stock, says Prabhudas Lilladher

While ENIL's top-line of Rs1,031mn was in-line with our estimate, there was a miss at bottom-line level due to an exceptional loss of Rs178mn pertaining to impairment provision in the US and Bahrain businesses on account of COVID.

"Going ahead, revival in radio business will be led by volumes which have shown signs of improvement (up 20% during 1HFY23 in top-21 markets over pre-COVID base) while yields would take longer to recover. In order to diversify out of radio business (low growth market), ENIL is taking steps to increase exposure to core solutions & digital business which is expected to form ~50% of the top-line in FY25E. While Mirchi's diversification efforts are commendable we await green shoots on delivery front as losses on digital business will have to be absorbed in the initial phase. We keep our estimates broadly unchanged and expect sales/EBITDA CAGR of 9%/19% respectively over FY23-FY25E and retain HOLD on the stock with a TP of Rs189. Our TP is based on 50% weight to EV/EBITDA methodology with per share value of Rs96 (6x Sep-FY24E EBITDA; no change in target multiple) and 50% weight to DCF approach with per share value of Rs 93," Prabhudas Lilladher has said.