Domestic brokerage and research firm HDFC Securities recently made top stock recommendations with a focus on the time horizon of around two quarters. The top two stocks of the brokerage with a ‘buy’ stance come from the MFI-NBFC and auto ancillary sectors which are Credit Access Grameen Ltd and NRB Bearings Ltd.
HDFC Securities’ top stock picks In the next two quarters:
Credit Access Rural: The brokerage said that Credit Access has a proven track record of delivering industry-leading growth. Its AUM has grown at a CAGR of 45% in FY 17-21 (including MMFL). The niche position in deep geographies backed by superior liquidity provides an edge over other peers.
It appears that asset quality will start improving from H2GF22 onwards and the risk of COVID third wave will increase. It believes that the stock will continue to receive premium valuations due to its distinctive retail book, industry-leading growth and superior return ratio.
“We believe that investors can buy Credit Access Grameen Ltd on LTP” ₹682 add more ₹606 for the fair value of the base case ₹Reasonable price for 749 and Bull case ₹813 in the next two quarters,” the note from HDFC Securities said.
NRB Bearings: HDFC Securities has launched coverage on Auto Ancillary Stock. NRB is gearing up for the ‘next normal’ as new product lines and industry dynamics are redefined. It focuses on component categories that may contribute more to vehicle costs as these offer higher margins on components that cannot be replaced with the advent of electric vehicles (EVs) and new products for EVs , and plans to expand its portfolio of services. adjacent industries, it said.
HDFC Securities believes investors can buy stocks in the band ₹132-134 Add On More Dips ₹For a reasonable price of 116-118 band base case ₹150 and the fair price of the bull case ₹168 in the next 2 quarters.”
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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