Domestic brokerage and research firm Anand Rathi Rakesh Jhunjhunwala is bullish on the portfolio stock Federal Bank, while another brokerage Ambit Capital is bullish on Indian investor Tata Motors.
Federal Bank: “Higher margins and lower OPEX led to 721bp betterment of C/I ratio. Strong operating performance and benign credit cost (41 bps) led to improvement in ROA. Asset quality was stable as slippages were in line with expectations,” said Anand Rathi said in a note.
With lesser stress formation than before, the earnings recovery will be better, and according to the brokerage, it is poised to gain market share in the near term, given the bank’s strong liability franchise and capitalisation. Anand Rathi maintains his positive outlook on this Federal Bank shares With buy rating and target price of 120.
As per shareholding pattern, Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala hold 2.64% and 1.01% respectively in the bank as of March 2022.
Tata Motors: “We expect significant deleveraging for TTMT in FY 2013-24E with 1) improving FCF generation outlook in JLR, 2) market share growth and margin improvement for the domestic PV business, and 3) the domestic CV business Upcycle for FY 2010 after severe recession – 21,” Ambit said in a note while maintaining its buy rating. Shares of Tata Motors with a target price of 564.
“Given the higher steel content in trucks versus passenger vehicles, the profit for the CV business is higher than for the PV business. The rest of the increase in margins is on account of operating leverage gains on the back of better-than-expected demand revival. We have maintained our JLR volumes in 1QFY23 despite the volume loss in 1QFY23 by China’s COVID lockdown as we believe JLR will be able to offset the volume/profitability loss in 1Q for the remaining quarters in FY23. The roll-over results in the remaining increase in the target price,” the note added.
As per data available on BSE, Rakesh Jhunjhunwala holds 1.09% stake in Tata Motors as of June 2022, up from 1.18% in the previous quarter of March 2022.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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