3 Buy, Sell And Hold Stock Ideas For Long-term Investors

Here are a few stock that you can buy, sell or hold from broking firm Emkay Global. It's important to note that markets are highly volatile and are constantly on a selling spree. Hence, invest with caution right now.

Canara Bank

Emkay Global has a buy call on the stock of Canara Bank with a price target of Rs 282.

According to the brokerage firm, Canara Bank reported a higher-than-expected net profit of Rs 16.7 billion in Q4 (though slightly lower than consensus), mainly aided by higher other income and lower provisions. Slippages were significantly higher at Rs 47.6 billion (3% of loans), excluding future retail exposure of Rs12bn on which the bank carries a 60% PCR.

"Overall credit growth was healthy and in line with system at 10% yoy, but margins were largely flat at 2.8% due to interest reversal on a/c of higher slippages. CBK has indicated that the potential notional loss as of now on its investment portfolio seems to be limited to Rs2bn, but we believe rising G-sec yields could keep treasury performance in check.

"We expect a gradual improvement in RoA/RoE to 0.6-0.7%/12-15% over FY23-25E from 0.5%/11% in FY22, led by better growth and lower LLP. Retain Buy with a revised target price of Rs 282 (vs. Rs 290) based on (0.8x FY24E ABV) and subs investment of Rs 23," the brokerage has said.

Reliance Industries

Emkay Global has a hold rating on the stock of Reliance Industries with a price target of Rs 2850. "There is tightness with respect to the rise in demand, elevated gas prices, Russian restrictions and China export cuts. No major refineries are expected to come up until FY26; hence, RIL remains constructive on medium term refining outlook. MJ1 is on track for first gas in Q3FY23. Jio is ready to roll out pan-India 5G network. JioFiber added 2.7mn wired broadband subs in FY22. Store expansion and digital focus will continue in Retail. Giga factories are underway in 5,000 acres in Jamnagar.

"We raise FY23/24E GRM from USD10/bbl each to USD16/13 due to the Russia Ukraine conflict-related issues and the overall tightness in oil-product markets. We expect petchem earnings to also improve gradually, as cracker rates normalize and new capacity is absorbed. We build in higher upstream gas prices as well. We cut Jio's FY23E EBITDA by 3% due to subs (offset by higher ARPU), while Retail's is up by 7%/5% in FY23E/24E on better Q4 numbers vs. peers. However, we are increasing our capex estimate for FY23E," the brokerage has said.

Indus Towers

The brokerage does not see too much of an upside on the stock of Indus Towers and has recommended a hold on the stock.

"Indus' business prospects continue to be dependent mostly on Bharti Airtel for incremental tower additions, supported only by single tenancy. While Vodafone PLC's stake sale has helped to bring down the receivables marginally, VIL's inability to raise capital will continue to restrict network investments. Further, the recently concluded MSA with a customer comes with a rental discount, which is negative for incremental revenue growth, which is already sub-par. Despite this, we are not building in lower ARPT due to the lack of disclosure from the management regarding new rental pricing. Timely payments from VIL on incremental billing even after MSA renewals (at discounted rates) lacks clarity. Key risks: 1) faster-than expected 5G rollout; 2) higher demand of lean towers; 3) new revenue streams (smart cities, fiber, small cells, etc.); 4) timely payments and network investments by VIL; and 5) growth from Jio," the brokerage has said.

Disclaimer

Investing in stocks is risky. Please consult a professional advisor as investing in the stock markets. The author and Greynium Information Technologies Pvt Ltd, would not be responsible for losses incurred. The above stocks are picked from the brokerage report of Enkay Global Financial Services.