Amid the stock market rally, analysts have recommended four stocks to buy which they believe have a decent upside potential based on the fundamentals and technical charts.
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These four stocks to buy are CE Info Systems, LIC Housing Finance, Ethos and NLC India.
Here are the stock recommendations by analysts:
CE Info Systems | Buy | TP: ₹2,900
CE Info Systems’ (MapmyIndia) growth potential and horizontal nature of services offered make it more comparable to global SaaS players, JM Financial said. It finds the company’s target of achieving over ₹1,000 crore revenue target by FY27 / FY28 achievable and estimates 32% and 32% revenue and EPS CAGR over FY24-28E.
MapmyIndia, we believe, is a play on EV, e-Commerce and digital transformation of enterprises – all at once. We, therefore, anchor our valuation of MapmyIndia to global horizontal SaaS players (Snowflake etc.), JM Financial said.
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The brokerage initiated coverage on CE Info Systems shares with a ‘Buy’ rating and a target price of ₹2,900, implying an upside potential of more than 27% from Wednesday’ closing price. Higher competitive intensity (OLA Maps) and margin contraction due to higher share of hardware sales are key risks.
LIC Housing Finance | Buy | TP: ₹930
LIC Housing Finance has strong moats in both retail mortgages and on the liability side. Over the last four to five quarters, the company’s earnings predictability has improved, with fewer surprises on asset quality, credit costs, and operating expenses, brokerage firm Motilal Oswal Financial Services said.
It expects LIC Housing Finance to deliver stronger loan growth over FY25-26, which can offset net interest margin (NIM) compression. The company reported a PAT growth of ~65% YoY in FY24. Against this base, the brokerage forecasts only ~4% PAT CAGR over FY24-26. It estimates an RoA and RoE of 1.6% and 14% in FY26.
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A low volatility in earnings and better loan growth can potentially translate into a re-rating of the valuation multiples for LIC Housing Finance, Motilal Oswal said.
The broking house reiterated its ‘Buy’ rating on LIC Housing Finance shares with a revised target price of ₹930 per share.
Ethos | Buy | TP: ₹3,200
Ethos remains Emkay Global Financial Services’ preferred pick in the discretionary space, given its strong 25% CAGR potential. It reiterates ‘Buy’ on Ethos share price backed by its assessment of growth drivers and margin and ROCE tailwinds.
The brokerage firm expects margins to inch up, with higher exclusive mix, gradual duty elimination, and discount reductions. WC should optimize with increase in credit period/SOR arrangements with select brands. Given the booming luxury trends, it remains confident of Ethos achieving ~30% PAT CAGR over FY24-27E.
Emkay Global retains a ‘Buy’ rating on Ethos shares with a revised target price of ₹3,200 per share.
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NLC India | Buy | TP: ₹300
NLC India shares went into a consolidation phase after a gigantic rally from ₹70 to around ₹290 during the year of 2023. Initially, the price range was ₹290 – 190 but with time this kept on diminishing from the top. This resulted in a formation which resembles a Descending Triangle pattern, and NLC India stock is on the verge of a breakout from this pattern, brokerage firm Anand Rathi noted.
Thus, it advises traders to accumulate NLC India shares near ₹240 with a stop loss of ₹210 on closing basis for an upside target of ₹300 per share in a time horizon of 12 months.
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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 27 Jun 2024, 11:35 AM IST
