Ashok Leyland, Sobha and Karur Vysya Bank shares surge post March earnings- brokerages see up to 64% upside

Shares of NTPC, Ashok Leyland, Sobha, and Karur Vysya Bank gained up to 8 per cent on the back of healthy/in-line March quarter results for the financial year 2021-22 (Q4FY22).  

Individually, Ashok Leyland shares jumped most among all nearly 8 per cent to touch the day’s high level of Rs 140.25 per share, followed by Karur Vysya Bank shares surged around 7 per cent to touch the day’s high level of Rs 47.5 per share on the BSE intraday. 

Shares of Sobha Limited gained around 5 per cent to touch a day’s high level of Rs 569 per share on the BSE intraday. However, the stock fell around 1 per cent to Rs 539 per share at around 11:30 AM.  

Index heavyweight NTPC gained almost 3.5 per cent to touch a day’s high level of Rs 155.4 per share on the BSE intraday. Kotak Institutional Equities maintained an ADD rating on NTPC with a target price of Rs 165 per share, implying an upside of 10 per cent from Friday’s closing of Rs 150 apiece. 

The domestic brokerage said in a report that NTPC currently has an operational renewable capacity of 1.8 GW with another 3.4 GW of capacities under construction. 

 “Valuations at 1X P/B and 8X on P/E on FY23E earnings remain attractive and renewed aggression for solar capacities is a positive for the company, while they are watchful of the return profile.” 

Kotak Institutional Equities said Ashok Leyland Q4 earnings were brokerage’s estimates due to better realizations. The near-term demand recovery may come under pressure; however, it remained optimistic over the medium term led by a pickup in the replacement segment. 

Sobha ended the year strong with healthy sales performance, and cash generation leading to a reduction in net debt, Kotak Institutional said. “However, somber guidance on sales growth, free cash generation, and debt reduction for FY23E, from new senior management may dent investor sentiment in the near term. Maintain a Buy rating with Rs 890 apiece, upside up to 64 per cent.”