Bajaj Finance, Maruti Suzuki and Tata Consumer shares are on the ‘Buy’ list of Sharekhan. The shares of all three companies had ended the last session of April in green. In comparison, the NSE Nifty 50 surged 149.95 points or 0.84% to 18,065 and BSE Sensex skyrocketed 463.06 points or 0.76% to 61,112.44. In sectoral indices, Bank Nifty jumped 233.05 points or 0.54% to 43,233.9 and Nifty IT advanced 352.95 points or 1.29% to 27,708.2.
Brokerage call: Sharekhan’s Buy recommendation on these stocks
Maruti Suzuki: Buy – CMP: Rs 8606 – Target Price: Rs 10965 (27.4% upside)
Maruti Suzuki shares have risen 4.6% in the last one month and 9% in the last one year. The company reported a 10.5% on-quarter increase in volumes and flat ASPs, revenue increased by 10.3% to Rs 32,048 crore and PAT grew by 11.6% on-quarter to Rs 2,623 crore in Q4FY23. MSIL announced a dividend of Rs 90 per share for FY2023. The brokerage maintains Buy with an unchanged target price of Rs 10,965. “The stock is trading at a P/E of 21.7x and EV/EBITDA of 12.4x on FY2025E earnings estimates. We reiterate our Buy rating on the stock factoring gains in market shares through refreshed and new launches,” said analysts at Sharekhan.
Bajaj Finance: Buy – CMP: Rs 6263.05 – Target Price: Rs 7500 (19.7% upside)
Bajaj Finance shares have jumped 13.5% in the past one month while they have fallen nearly 7% in the last on year. The brokerage reiterates a Buy on Bajaj Finance with an unchanged target price of Rs 7,500. “The stock has witnessed significant correction from its highs in the past 12 months and at CMP, the 5.5x/ 4.3x its FY2024E/ FY2025 BV. We believe the company is poised to deliver sector-leading ROA/ ROE of ~4.7%/ 22% over FY23-FY25E,” said analysts at Sharekhan.
Key Risks: Economic slowdown due to slower AUM growth and higher-than-anticipated credit cost; Increased competitive intensity could lead to higher market share loss and further moderation in AUM growth.
Tata Consumer Products: Buy – CMP: Rs 761.9 – Target Price: Rs 870 (14% upside)
Tata Consumer Products shares have surged nearly 10 in the past one month while they have fallen 6% in the last one year. TCPL’s revenue grew by 14% on-year to Rs 3,618.7 crore, driven by a mix of volume-value-led growth in Q4FY23. Operating profit grew by 15.2% on-year to Rs 511.7 crore. This along with higher other income, led to 16.4% on-year growth in adjusted PAT to Rs 294 crore. The board has recommended a final dividend of Rs 8.45 per equity share for FY2023. The brokerage maintains a Buy recommendation on TCPL with an unchanged price target of Rs 870 per share. “The stock trades at 48.8x/40.7x its FY2024E/FY2025E earnings. With strong growth prospects and sturdy cash flows, we maintain our Buy recommendation on TCPL. Any large inorganic deal focusing on enhancing shareholders’ value will be a key trigger for valuations to improve in the near term,” said analysts at Sharekhan.
Key Risks: Any slowdown in demand in the domestic or international market or increase in key commodity prices would act as a risk to our earnings estimates in the near term.