Domestic brokerage and research firm HDFC Securities has suggested two stocks that investors can buy from the banking and capital goods sectors. Top Stock Picks in Next 2-3 Quarters are Karur Vysya Bank Ltd and Kirloskar Pneumatic Company Ltd.
HDFC Securities’ top stock picks ,
Karur Vysya Bank: With improved loan book quality, stable NIM trajectory, improved vision on granular deposit franchise, adequate capitalization and low credit cost, KVB is available at 0.7x FY24E ABV, according to the brokerage, which gives a good space. reverse.
“We think investors can buy Karur Vysya Bank Ltd in between Add more on 71-73 more dips 63 bands. We expect a fair price for the base case 81 and the fair value of the bull case 88 in the next 2 quarters,” it suggested.
Kirloskar Pneumatic: “KPCL is a debt free company with nominal capital expenditure requirements. We expect its Revenue / EBITDA / PAT to grow at 19/20/26% CAGR in FY22-FY24E, led by revival in industrial activity and increase in export orders. The RoCE/RoNW is expected to improve to 22.5/16.5% by FY14,” the note said.
HDFC Securities believes investors can buy on the stock’s fall Band 525-535 and add more 465-475 bands for a reasonable price for the base case Fair Value of 617 and Bull Case 657 in the next 2-3 quarters.
KPCL is a diversified product company, serving key sectors. Industrial, oil and gas, infrastructure and food processing. The company was focusing on domestic markets till now, but is now looking to expand geographically. It has forayed into the Middle East oil and gas market and is looking to increase its export revenue share from less than 5% to 15-20% over the next few years.
Management is achieving goals 2000 Crore revenue in the next 2-3 years which includes a CAGR of 17-18%. The brokerage said that KPCL has a strong market share in the compressor business and is well positioned to capitalize on the opportunities emerging in the infrastructure sector.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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