Even with a sharp run-up in the stock prices of the defence basket (Nifty India Defence index 6m returns- 37%); our outlook on the sector remains optimistic due to the following factors: (1) visibility into long-term execution growth supported by a strong order book and a healthy pipeline; (2) timely execution facilitated by localization, integrated modular construction, and subcontracting; (3) government preference and domain expertise; (4) cash-rich balance sheets that prevent significant working capital challenges due to stage payments; and (5) in-house research and development investments and suitable technological supportEven with a sharp run-up in the stock prices of the defence basket
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Coal India has superlative return ratios (RoCE’s at ~40%) & healthy net cash positive b/s. Buy for target price of Rs 550: ICICI Direct
We have a positive view on Coal India amidst healthy volume growth on anvil, superlative return ratios (RoCE’s at ~40%), healthy net cash positive b/s and its leading contribution to India’s energy needs. We assign BUY rating to Coal India with target price of ₹550 wherein we have valued it at 5x EV/EBITDA on FY26E. High dividend yield of ~6% is added positive
Top 15 Stock Picks for upto 50% upside by Axis Securities
we maintain our Dec’24 Nifty target at 23000 as we value it at 20x on Dec’25 earnings. The current level of India VIX is below its long-term average, indicating that the market is currently in a neutral zone (neither panic nor exuberance). While the medium to long-term outlook for the overall market remains positive, we may see volatility in the short run with the market responding in either direction. Keeping this in view, the current setup is a ‘Buy on Dips’ market. We recommend investors to remain invested in the market and maintain good liquidity (10%) to use any dips in a phased manner and build a position in high-quality companies (where the earnings visibility is quite high) with an investment horizon of 12-18 months
ITD Cementation has healthy financial performance & Robust and diversified order book position. Buy for target price of Rs 353 (15% upside): SBI Securities
Reasonable valuation: At the current market price, the stock trades at FY24E/FY25E P/E multiple of 20.3x/14.1x based on Bloomberg consensus earnings. We believe the valuation to be reasonable given the robust order book position of the company, strong execution capabilities and positive outlook on the overall infrastructure space
South Indian Bank’s acceleration in transformation will drive valuation. Buy for target price of Rs 35 (25% upside): ICICI Direct
With business transformation imbibed & new competitive leadership,
current trajectory of business restructuring is expected to continue.
Increased focus on retail & MSME segment to aid granularization and
margins which is expected to drive RoA at ~0.9-1% ahead. Valuing the
stock at 0.8x FY26E BV, we assign a target of ₹ 35 and recommend a BUY
BSE is gaining strength. Buy for target price of Rs 3050 (24% upside): HDFC Sec
The stock is up 86% in the last six months, led by market share gains, and it is currently trading at a P/E of 38/30x FY25/26E vs 5Y average 1Yfwd P/E ~21x. Our base case assumes an 11% premium market share, revenue/PAT CAGRs of 44/57% over FY23-26E and a core multiple of ~40x resulting in a ~24% upside. The bull case assumes a 15% premium market share, 52/67% revenue/PAT CAGRs over FY23-26E and 45x multiple, resulting in a ~66% upside from CMP
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