HCG and SBI shares can give up to 37% return—Here are what's working for these stocks

Healthcare Global Enterprises Ltd and State Bank of India (SBI) can give returns of up to 37% from current levels, say brokerages.  

Shares of HCG, the largest provider of cancer care in India under the HCG brand, can surge up to Rs 330 a share in 12 months, as per brokerage house ICICI Securites. This is an upside of 21% on March 25 closing price of Rs 272 a share. The scrip has given over 45% return in the past one year, showed technical data of the stock. 

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HCG is expected to turn around its operating profitability with operating EBITDA margins improving by 680bps over FY21-FY24E, majorly driven by Operating leverage driven by the increase in average occupancy rates (53%-58%), Increase in ARPOB led by the increase in international patients and high end works and Operating leverage in new centers that have already achieved breakeven.  

"Given variable and fixed costs comprise 35% and 65% in hospitals respectively, we believe strong operating leverage in new centers may improve margins to 12%-15% over FY21-FY24E. We recommend BUY with a TP of Rs 330/share," the brokerage house said.  

Motilal Oswal recommended buy for State Bank of India with target price of Rs 675 per share, neary 37% higher from March 25 closing price of the share of Rs 490 on the NSE.  

It is of the view that strengthening balance sheet and improvement in its return ratios with the management’s focus on building a granular, high-quality loan portfolio can help the price movement.  

SBIN remains well positioned to withstand MTM losses in its treasury portfolio as the rate environment hardens further, it says.  

"The asset quality outlook remains encouraging, with the slippage ratio lower than many Private Banks. The bank has prudently improved PCR to ~71% and holds unutilized COVID-related provisions of ~INR62b. It has reported a RoE of ~12.7% in 3QFY22, the highest since AQR commenced in FY16. We estimate a FY24 RoA/RoE of ~0.9%/16.2% and reiterate SBIN as our top Buy, with a TP of INR675 (1.3x FY24E ABV + INR210 from its subsidiaries)," said Motilal Oswal. 

Shares of this public lender has given a healthy return of around 38% in the past one year as on March 28.  

Meanwhile, the market continued to trade volatile amid geopolitical concerns as benchmarks traded with marginal cuts in the afternoon trade. The broader Nifty50 was trading below 17,200 and the Sensex lower by nearly 10 points to 57, 360.  

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)