Stocks To Buy: Invest In 2 Large Cap, 1 Small-Cap Stock For Double Digit Return In Short Term

Axis Securities has given buy rating to 2 large cap stocks and 1 small cap stock. These stocks are Maruti Suzuki India Ltd (MSIL), SBI Cards & Payment Services Ltd, and V-MART Ltd. Check key takeaways below:

SBI Cards & Payment Services Ltd

Axis Securities has given buy rating to the stock for a target price of Rs 1050 apiece with a potential return of 13%. According to the brokerage, investors can get the specified return of 13% in 6-9 months' time period. According to Axis Securities, "We recommend a BUY on the stock with a target price of Rs 1,050/share, implying an upside of 13% from CMP."

Festive season to support strong business growth: In Q1FY23/Jul'22, SBIC reported a strong customer addition of over 9 Lc/2.2 Lc, aiding cardsin-force (CIF) growth of 19% YoY in Q1FY23 and Jul'22 respectively. Going ahead, SBIC intends to maintain the monthly acquisition run-rate of over 3 Lc new customers, targeting a mix of 50:50 between Banca and Open-market channels.

A pick-up in travel-related spends along with improving discretionary spends, propelled spends growth in Q1FY23 and is likely to sustain with the expectations of a strong festive season.

Spends/customers are likely to improve hereon, with the old category of spends reviving to pre-Covid levels and new categories of spends contributing incrementally to spends growth.

SBI Cards & Payment Services Stock Outlook

The current market price of the stock is Rs 950 apiece with a 52-week high of Rs 1160 apiece and 52-week low of Rs 656 apiece. It has a market capitalization of Rs 89,657 crore.

About SBI Cards & Payment Services Ltd

SBI Cards (SBIC) is a pure-play credit-card issuer and the 2nd largest credit card player in terms of Cards-in-Force and 3rd largest in terms of Spends (as of Jul'22).

SBIC has a wide portfolio of own and co-branded credit cards catering to a broad target customer base ranging from 'Newto-credit card' to 'Super Premium' customers across product categories such as lifestyle, rewards, travel & fuel, shopping, banking partnership cards, and corporate credit cards.

Maruti Suzuki Ltd

Axis Securities has given buy call to the stock for a target price of Rs 9801 apiece with a potential return of 10% in short term. MSIL has recently launched All-New Brezza in compact SUV segment and Grand Vitara in Mid-SUV segment. Main features of Vitara include electric/ smart hybrid power-train giving superior mileage of ~27 kmps.

The order bookings have already crossed 70k and 20k respectively as per last management conference call. According to Axis Securities, "We recommend a BUY on the stock with a target price of Rs 9,801/share, implying an upside of 10% from CMP."

Maruti Suzuki Ltd Stock Outlook

The current market price of the stock is Rs 8883 apiece with a 52-week high of Rs 9,229 apiece and 52-week low of Rs 6,540 apiece. It has a market capitalization of Rs 2,68,364.90 crore.

About Maruti Suzuki Ltd

Maruti Suzuki India Ltd (MSIL) is the market leader in the domestic passenger car industry commanding a market share of about 40%. Suzuki Motor Corporation (SMC) currently holds 56.37% of its equity stake.The Company has two state-of-the-art manufacturing facilities located in Gurugram and Manesar in Haryana, capable of producing ~1.5 Mn units per annum. Suzuki Motor Gujarat Private Limited (SMG), a subsidiary of SMC, was set up in Hansalpur, Gujarat to cater to the increasing market demand for the Company's products and has been operational since 2017. Through this new facility, an additional annual production capacity of 0.75 Mn units has been made available, thereby taking the combined production capability to~2.25Mn units.

V-MART Ltd

Axis Securities has given buy rating to the stock for a target price of Rs 3350 with a potential return of 11% in short term of 6 to 9 months. In Q1FY23, footfalls were still lower by 30% from the pre-Covid levels as rural and smaller towns (higher salience) continue to remain weak due to subdued demand.

The lower footfall is on account of the impact of higher inflation and increase in prices (taking price increase of 17-18% cumulatively in the last one year) and overall consumption is affected due to high inflation; the low-income segment is facing 30% food inflation which is directly impacting their disposable incomes.

However, the management expects the smaller towns and rural demand to revive post easing of inflation and a normal monsoon. On the other hand, larger cities and tier 1 towns continue to remain strong while recently acquired Unlimited stores in south India delivered healthy profitable growth.

V-MART Ltd Stock Outlook

The current market price of the stock is Rs 2882 with a decline of 0.36% intraday. Its 52-week high is Rs 4620 and 52-week low is Rs 2406 apiece. It has a market capitalization of Rs 5697 crore.

About V-MART Ltd

V-Mart - founded in 2002, offers fashion apparel, footwear, home furnishings, general merchandise, and Kirana, among others. The company is led by the concept of 'value retailing' and caters to the needs of value and fashion-conscious consumers living in tier II, III, and IV cities across India.

As of Jun'22, V-Mart has 391 stores and plans to open over 60 stores in FY23. V-Mart is majorly concentrated in three states of Uttar Pradesh, Bihar, and Jharkhand, which accounts for ~50% of the stores' count. These three states are the largest value-conscious consumer market in India. In Jul'21, V-Mart acquired "Unlimited" stores from Arvind Lifestyle, facilitating its entry into West and South India.

Disclaimer

The above stocks were picked from the brokerage report of Axis Securities. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.