Diwali 2017: Top investment picks from Geojit Research
According to Geojit Research, the top Diwali 2017 picks include names like Yes Bank, KNR Constructions, NBCC, Aurobindo Pharma, Tata Motors, JK Lakshmi Cement, Aarti Industries, Bharat Electronics and UPL.
Moneycontrol News
It was not the begining which investors or traders expected to be for Samvat 2074. The Nifty and the Sensex saw the biggest fall in recent years during the auspicious Muhurat trading day with the Nifty50 falling 64.30 points or 0.63 percent while the Sensex dipped 0.6 percent or 194.39 points. Bank Nifty was the biggest lower, down 1.25 percent led by ICICI Bank and Kotak Mahindra Bank.
Research and broking firm Geojit Research has come out with investment picks for Diwali 2017 which can give handsome returns.
Yes Bank: Rating: Buy CMP: Rs. 370 Target: Rs. 443 Return: 20%
According to the research firm, advances will maintain strong momentum and continue to grow ahead of industry. It factors advances to grow at 27 percent CAGR over the next two years. On robust business growth and stable asset quality, earnings are expected to grow at a healthy 25 percent CAGR over FY17-19E and deliver an ROE of 19 percent.
At CMP, the stock is trading at P/Adj.BV of 3.3x and 2.8x on FY18E and FY19E, respectively. Considering the positive outlook on the operating metrics, the firm believes that the stock is likely to trade at a premium over its historical average. Geojit values Yes Bank at 3.4x FY19E Adj.BV and recommend Buy with a target price of Rs 443.
KNR Constructions Ltd: Rating: Buy CMP: Rs. 208 Target: Rs. 242 Return: 16%
Geojit expects execution will ramp up as most of the projects are now operational which continue to construct growth. EBITDA margin improved by 317bps to 17.6 percent in Q1FY18 due to better operational performance. The company continues to maintain their order inflow target of Rs 2,000 crore to Rs 2,500 crore in FY18E which is a key trigger to monitor for re-rating.
Consequently, the firm expects order intake to grow at a CAGR of 35 percent over FY17-19E. With better visibility on execution and better operating performance, it increased FY18E/FY19E PAT estimate by 12 percent and 6 percent respectively.
NBCC: Rating: Buy CMP: Rs. 243 Target: Rs. 283 Return: 16%
According to Geojit, with pick up in execution we factored earnings to grow at 42 percent CAGR over FY17-19E supported by 60bps improvement in EBITDA margin. Considering the asset light PMC segment, less leveraged balance sheet and robust opportunities in the pipeline, NBCC will command premium valuation in the construction space. The research firm values NBCC’s core business at a P/E of 32x on FY19E and book value of land parcel at Rs 29/share to arrive at SOTP target price of Rs 283 and assign Buy rating
Tata Motors: Rating: Buy CMP: Rs.424 Target: Rs. 508 Return: 20%
Geojit projects JLR (ex-China) volumes to witness a healthy CAGR of 10 percent during FY17-19E driven by Z success and strong product pipeline. PV segmenth as witnessed traction with the success of recent launches including Tiago,Tigor and Nexon. PV standalone sales growth for the H1FY18 was12 percent YoY.
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