Markets ended the week on a sour note, with stocks seeing losses on most trading days of the week. Closer to the weekend we have had some good equity research reports from broking outfits. Here are 2 stocks that we have picked for gains up to 36% from broking reports:
TVS Motors: Buy For 36% upside from current levels
|Current market price||Rs 579.20|
|Target price||Rs 780|
Emkay Global estimates on select TVS Motors select parameters
|2021-22 (estimated0||2022-23 (estimated)|
|Price to book||5.5||4.6|
Emkay Global likes the stock of TVS Motors and has said, 2W volume is positive and premium motorcycles/scooters could outperform going ahead. According to the broking firm, the export outlook is also encouraging across most markets, owing to higher commodity prices and better forex availability to importers.
Why Emkay is betting on the stock of TVS Motors?
According to the broking firm, demand is improving in the domestic market with activities normalizing.
"Rural sales should improve as customer sentiments are positive due to a normal monsoon and healthy reservoir levels. Also, exports are healthy due to improving macros and stable exchange rates in key markets. Covid-19-affected markets such as Bangladesh and Nepal should see improvement from Aug'21. Monthly volumes should sustain at around 100,000 units and EBITDA margin should improve ahead on better scale, price increases and cost savings. Buy the stock with a price target of Rs 780," the brokerage has said.
SBI Life Insurance
Broking firm, Prabhudas Lilladher has a buy rating on insurance major SBI Life Insurance. According to the brokerage, margins improve by 250 basis points, YoY & 80 basis points from FY21 to 21.2% and was higher than expectation of 20.6% on actual tax basis.
|Current market price||Rs 1,099|
|Target price||Rs 1,250|
Prabhudas Lilladher estimates on select SBI Life Insurance parameters
|Price to enterprise value||2.7||2.3|
Why Prabhudas Lilladher has a buy call on the stock of SBI Life?
According to Prabhudas Lilladher, COVID claims & reserving of Rs 4.4 billion (inclusive Rs 1.8 billion of Q4FY22) is near to industry trends with benefits reaped from mortality changes done in FY21.
"SBI Life Insurance has underperformed peers with valuations lowest in the sector and we believe gradual margin improvement, better cost metrics and growth prospects (strong distribution) will help catch up on valuations. Retain Buy with revised target price of Rs 1,250 (from Rs 1,150) based on 2.5x Sep-23 (rolled over from Mar-23)," the brokerage has said.
As far as the markets are concerned, says Dr. Joseph Thomas, Head Of Research, Emkay Wealth Management on the stock market. "The relatively more important factor to reckon with would be the Chinese ban on exports of certain commodities by Chinese firms including fertilizers may push up the cost of these products for the rest of the world, and may have consequences for trade and commerce in the near term.
Some of these factors may continue to dominate the discussions in the coming weeks too, as the markets reopen for business next week"
Investing in stocks poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage houses are not liable for any losses caused as a result of decisions based on the article. Investors should take care because the markets are near record highs.