Updated : 2020-12-09 14:51:17
The market rally in the past few months has become broader with more sectors participating in the rally. Angel Broking expects that the rally in cyclical and beaten down sectors will continue for now given the risk-on environment globally. Here are the top stock picks from the brokerage for December:
Bandhan Bank | TP: Rs 450 | Bandhan bank is one of India’s leading east-based microfinance lending-led bank. The brokerage believes that this places the bank at a significant advantage over other MFIs in the form of the very low cost of funds. (Image: Reuters)
Gujarat Gas | TP: Rs 397 | Gujarat Gas’ margins are highest in Q2FY21 at 29 percent. Margin has increased due to low imported LNG prices and a decrease in other expenses, Angel Broking noted.
Swaraj Engines | TP: Rs 1,892 | Angel Broking believes that the company has a healthy balance sheet along with free cash flow and higher profitability and the company is trading at reasonably lower valuations.
Persistent Systems | TP: Rs 1,531 | The brokerage expects the company to post revenue/EBITDA/PAT growth of 11.6%/21.4%/19.7% between FY20-FY22 given the negligible impact of COVID-19 on FY21 numbers, strong deal wins, the ramp-up of existing projects along with margin expansion. (Image: Company)
Inox Leisure | TP: Rs 350 | “We are positive on the prospects of the company given that has a strong balance sheet, increasing market share of multiplexes and also increasing appetite for Hollywood and smaller budget movies which is expected to reduce volatility in earnings due to lower dependency on big Bollywood movies,” Angel Broking said.
Metropolis Healthcare | TP: Rs 2,593 | The brokerage house is positive on the long-term prospects of the company given expected long-term growth rates of ~15% CAGR, stable margins profile and moderating competitive intensity.
IDFC First Bank | TP: 44 | Angel Broking believes the bank’s efforts to build a liability franchise, fresh capital infusion, and provision taken on the wholesale books will help to tide over this difficult time.
JK Lakshmi Cement | TP: Rs 422 | The stock is trading at a significant discount compared to other north-based cement companies such as JK Cement as well as historical valuation.
Cholamandalam Investment Finance | TP: Rs 453 | A diversified product mix will help capture growth in the LCV, tractor, and 2W segment. Adequate capital adequacy (20%+) and declined trend in the cost of funds and strong parentage provide comfort. The company will benefit significantly from stabilization in the operating environment.
Galaxy Surfactants | TP: Rs 2,284 | The company has been increasing its share of high-margin specialty care products in its portfolio which now accounts for ~ 40% of its revenues while the balance is accounted for by the performance surfactant business, the brokerage noted.
Hawkins Cooker | TP: Rs 5,992 | Over the FY17-20, the company has outperformed the market leader TTK Prestige in terms of sales growth, around 9.6 percent versus 0.4 percent in Cookers & Cookware segment. A strong balance sheet along with free cash flow and higher profitability are key positives.
Atul Ltd | TP: Rs 7,339 | The company has got one of the strongest chemistry skillets in the Indian chemical space and has got a very strong relationship with global chemical companies with exports accounting for 55-60% of the company’s revenues. The life science division which accounts for ~35% of the company’s revenue has reported a 5.3% YoY growth in sales to 347.5 crore for the quarter.