Brokerages are betting on these 10 stocks for a victorious portfolio this Dussehra

Dussehra or Vijaya Dashami is one of the most popular festivals in India embodying the victory of Ram over Ravana signifying the victory of good over evil. For a stock market investor, the festival of Dussehra means looking at the evil within and getting rid of the investment sins whether it is about the loopholes in investment strategy, the wrong stock choices in your portfolio, or an incorrect approach to investing. As the stock markets are on a roll climbing new milestones every day, it can be a daunting task for investors to choose the right stocks which are fundamentally strong and have sustainable growth visibility.

Listed below are 10 stocks you could look at for a victorious portfolio this Dussehra.

Motilal Oswal Financial Services

SBIN (TP: Rs 600)

SBI remains the best play on a gradual recovery in the Indian economy with strong liability franchise and improved core operating profit. While business trends were impacted by the lockdowns, loan growth is likely to recover gradually over FY22-23E. Even slippages are expected to moderate meaningfully over 2HFY22 as asset quality remains impeccable in the Retail book. It appears well-positioned to report a strong uptick in earnings, led by normalization in credit cost. This, along with an expected uptick in core operating performance, will further propel earnings growth.

Infosys: (TP:1,770)

We expect the company to deliver a top quartile growth performance in FY22E on the back of its strong technical capabilities and ramp-up in deal wins in FY21. The management increased its FY22 USD revenue growth guidance to 14- 16% CC YoY from 12-14%. There has been sustained growth acceleration, with seven industries reporting strong double-digit growth.

Birla Corp (TP: 1,740)

Cement demand has remained strong post FY18 (barring Covid-19 related disruptions) and we expect demand momentum to remain strong led by a) strong rural demand, b) recovery in organized real estate and c) the government’s continued focus on infrastructure development. Rising coal/pet coke prices may restrict strong earnings upside in the near term and we forecast EBITDA CAGR of 3% over FY21– 23E (on a strong base of FY19-21 as EBITDA increased at a CAGR of 20% in this period).

Lemon Tree : (TP: 57)

The company operates in the mid-priced market and has a higher share of domestic customers (85%), which are likely to witness faster demand recovery. Revival in corporate demand would remain a key trigger to watch out for going forward. Post mid-Jun’21, the company saw a gradual increase in occupancy with the easing of travel restrictions. The company is seeing slow demand from corporates and foreigners (due to travel restrictions) – this is expected to bounce back over the near term (roughly by 4QFY22). We maintain our Buy rating on the stock.

Anand Rathi

KPR Mill | Target: 550

K.P.R. Mill Limited is one of the largest vertically integrated apparel manufacturing Companies in India with a presence across the entire value chain from “fibre to fashion”. The company has launched its retail Brand FASO with unique characters such as 100% Organic Cotton, ultra-soft comfort and skin-friendliness. The company has a vertically integrated business model along with a strong balance sheet. Various Government initiatives such as Mega Investment Textile Parks (MITRA are to benefit the company going forward. We remain positive on the company and initiate our coverage with a BUY rating on the stock with a target price of ₹550 per share.

Craftsman Automation |Target: 2655

Dominance in machining critical power-train components, versatility in aluminum die-casting along growth augur well for Craftsman in posting strong growth for the next 2-3 years. We expect strong growth on the backdrop of the expected recovery in M&HCVs and two-wheelers, coupled with general Capex formation growth in the country. Valuations we expect a 19% revenue CAGR over FY21-23; and 70%earnings growth, leading to an EPS of Rs133. We maintain a Buy rating, with a target price of Rs2,655 (20x FY23e).

Ashok Leyland |Target: 155

We continue to expect strong replacement demand for higher-tonnage and multi-axle vehicles to kick in by H2 FY22, which in our view, would lead to significant operating leverage-led margin expansion. Also, improvement in LCV volumes on the back of a surge in e-commerce augurs well for growth beyond FY22. With the current set of lockdowns easing, we expect strong volume growth to come in H2 FY22 driven by sales across vehicle segments. We believe the CV markets would see a cyclical upturn from FY23 given the revival in economic activity. Accordingly, we expect strong, 49%, growth in FY22 and 27% in FY23. Valuation. We expect a 38% CAGR in revenue over FY21-23, leading to an EPS of Rs4.9. We maintain a Buy rating, with a higher target price of Rs155 (29x FY23e)

CapitalVia Global Research

Can Fin Homes | Target: 852

The firm is a key player in the housing finance and NBFC segment, the stock seems reasonably valued with P/E of 20.37 times when compared to its peers and the Price / Book value seems to be around 3.5 times. The share has also shown consistent growth on Net profit margin front from FY17(it has been in the range of 17%-24%). ROCE has been also been on consistent rise suggesting wealth generation for investors. EPS has also been on rise since FY17.

Technically, the stock has surpassed its previous monthly swing high of 666 which was made in 2017, Now the stock is comfortably trading above this level and I expect the stock to outperform in the next few years, and every significant correction should be used to accumulate this stock.

RITES | Target: 338

Rail India Technical and Economic Service Limited, abbreviated as RITES Ltd, is under the ownership of Indian Railways, Ministry of Railways, Government of India and an engineering consultancy corporation, specializing in the field of transport infrastructure. The stock seems reasonably valued at 15.34 times compared to its peers, the operating profit margin has also been consistent within the range of 27%-28%. The cash flow from the operations has also been on rise. If somehow stock sustains above this range, a sharp-up move is expected which can push stock towards and above its highs of 2020.

Union Bank of India | Target: 50

Union Bank of India, UBI, is an Indian government-owned bank with 120+ million customers and a total business of US$106 billion. After the amalgamation with Corporation Bank and Andhra Bank. The amalgamated entity became the fifth largest PSU bank in terms of branch network with around 9500 branches. The stock has been doing well on reducing the Net NPA percent from FY17 and the operating profit margin has also been rising. The interest income has been also on rise the March 2021 being 69,311 which was 37,479 in March 2020 and 34,313 in March 2019. Union bank if somehow breaks level of 41.50 which is monthly resistance might show good bullish momentum and push towards the level of 50.