Samvat 2080: IDFC First, M&M, MTAR, DLF, 2 Other Stocks Are Top Recommendations By Anand Rathi

Six stocks are Anand Rathi's top picks for Samvat 2080 with potential upside ranging from 15% to 40%. These stocks come from diverse segments including banking, auto, and realty segments. They are Syrma SGS Technology, IDFC First Bank, DLF, MTAR Technologies, TVS Motor Company, and Mahindra & Mahindra.

Here's what Anand Rathi says about these stocks:

1. Syrma SGS Technology: (TP: Rs 735)

The company has a total order book of approximately Rs 35,000 million, with Rs 22,000-23,000 million expected to be delivered in the next 12 months. The company has done a capex of Rs 500 million in the Q1 FY24 and plans to spend Rs 2,000-2,500 million in total for the year. The company can be a key player in the growing ESDM industry (especially in the ODM segment) if it grabs the opportunities available across end-user industries and executes well on the burgeoning order inflows.

2. IDFC First Bank: (TP: Rs 114)

IDFC First has undergone the first phase of its transformation from an infra financier to a granular retail lending bank. Investment in technology and building a scalable liability franchisee would keep costs high in the near term, despite strong granular loan growth. The bank expects the credit card business to break even by FY25. 24-25% of the credit card mix are revolvers. The bank expects to reach 13-15% ROE by FY25 and 1.4-1.6% ROA by FY25.

3. DLF: (TP: Rs 640)

The company is re-entering Mumbai with a slum redevelopment project in Andheri West. This project is a joint venture with the Trident Group, with DLFU investing Rs 4,000 million for a 51% stake. The planned development spans 3-3.5 msf, with the first 0.9 msf to be launched within 12 months. For FY24, management expects pre-sales to surpass Rs 1,20,000 million, driven by significant inventory, upcoming launches, and strong demand. They plan to introduce msf of projects valued at Rs 1,97,000 million, with the majority in Gurugram along with projects in Chennai, Chandigarh, and Noida.

4. MTAR Technologies: (TP: Rs 2,970)

The company is expanding its product range, including valves and semi-cryogenic engines in the defence and space sectors. MTAR expects to secure defence contracts shortly, enabling direct supply to major OEMs and the Ministry of Defense. They are also considering new facilities in Europe and the US to enhance their supply chain and competitiveness.

5. TVS Motor Company: (TP: Rs 1,850)

TVS has been able to expand its presence beyond the South and currently has a significant presence in all the regions, in terms of sales. The efforts taken over the years to improve its PAN-India dealer network have resulted in having a domestic presence. company is poised to outperform the industry on the back of new product launches in ICE & EV segments, higher focus on exports and premiumization, operating leverage, benign input prices and price hikes.

6. Mahindra & Mahindra Ltd: (TP: Rs 1,770)

M&M has been the dominant market leader in the domestic tractor market, commanding a market share of 42.9% in Q1FY24 (41.2% in FY23). With its offerings across different brands of Mahindra, Swaraj, Trakstar and soon-to-be-launched Oja and its well-entrenched sales and service network, it is expected to maintain its leadership position going forward as well. The introduction of a new range of OJA tractors is expected to boost its topline in the future.