Surprise earnings! HG Infra, Tata Motors, Bharti Airtel among 6 stocks that can give up to 48% return in one year: ICICIdirect
The corporate earnings for the quarter ended December 31, 2021 witnessed intact growth momentum with topline growing 13% QoQ, while sequential growth on the operating front came at 12%, said ICICIdirect research.
The corporate earnings for the quarter ended December 31, 2021 witnessed intact growth momentum with topline growing 13% QoQ, while sequential growth on the operating front came at 12%, said ICICIdirect research.
At the Nifty level, including financials, broader trend continued with lower double digit QoQ growth in sales & high single digit growth in PAT. " PAT was a tad higher (at 8.8% QoQ) than ex-financials data shared above (7.3% QoQ) due to better performance by corporate banks," said the research
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Besides, On the sectoral front, in the BFSI space, asset quality improved sequentially as lower slippages and better recoveries helped overall performance. IT companies too continued their growth momentum in Q3 where the company reported strong growth in revenues in CC terms.
Going forward, ICICIdirect sees Nifty at 20,000 in FY23-24 and the Sensex target is pegged at 66,600, offering healthy double-digit upside.
Based on the strong Q3 earnings, ICICIdirect has shortlisted six stocks from telecom, infra, construction, metal, auto to jewellery segments. Bharti Airtel, HG infra, Hindalco Industries, Tata Motors, Larsen & Toubro and Titan Company were the stocks that the brokerage believes are more fundamental and sustainable in nature based on a strong set of earnings in Q3FY22. The report sees an upside of up to 46% in these stocks.
HG Infra Engineering:
The research puts the target price of this infra stock to Rs 885 per share in on year. At the closing price of Rs 597.70 on the BSE on Monday, the return translates into 48% upside. "we expect execution momentum to continue in the near-to-medium term. Additionally, elevated operating margins, strong return ratios and lean balance sheet position remains key positive," it said.
Tata Motors:
On closing price of Rs 494.70 on the BSE on Monday, ICICIdirect sees an upside of 26% for this auto major. The brokerage sees a target price of Rs 625 for this share.
"TML is leading the charge among domestic auto OEMs in regards to the upcoming mega industry transformation i.e. electrification. Domestically, its Nexon EV is the best-selling electric PV with market share pegged at ~71% in FY21. Its overseas subsidiary Jaguar Land Rover (JLR) is set to embrace the global EV trend under the ‘Reimagine’ strategy with Jaguar set to be an all-electric brand by 2025 and Land Rover set to introduce six new electric models in the next five years," it underlined.
Hindalco Industries
The target price for this metal sock is Rs 650. At closing price of Rs 511.95 per share on the BSE, the upside for Hindalco Industries is 27%. "Going forward, Hindalco plans to continue with its focus on downstream capacity expansion at both Novelis and India business, which augurs well," it said.
Bharti Airtel:
ICICIdirect sees this telecom stock hitting target price of Rs 860, an upside of 21% on Monday's closing price of Rs 709.80 the BSE.
Larsen & Tourbo (L&T)
The target price for this construction and engineering giant in one year is Rs 2270 per share, as per the research. This is an upside of 22% on Rs 1863.05, closing price on the BSE on Monday.
"L&T is India’s largest engineering & construction (E&C) company with interest in EPC projects, hi-tech manufacturing and services. L&T’s strong order book of Rs 340365 crore suggest good revenue visibility in coming years. L&T’s focus on asset monetisation to further strengthen the balance sheet and restructuring of Hyderabad Metro to enhance return return ratios of consolidated business," says the report.
Titan Company Ltd
The brokerage sees a target price of Rs 2960 for this jewellery segment stock. The return on Monday's closing price of Rs 2453.35 for Titan calculates to 20% in one year. " We believe Titan is a structural growth story and appears to be a key beneficiary of the unorganised to organised shift in the Indian jewellery market. Robust business model and strong earnings visibility will enable Titan to sustain its premium valuations going forward," it said.
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