Stocks to buy: SBI, ITC, Tata Power, Tata Consumer, Zydus, Marico - check price targets

Stocks To Buy: Domestic brokerage firm Sharekhan has recommended shares of State Bank of India, ITC, Tata Power, Marico and Zydus for bumper returns.

SBI Share Price Target 

Sharekhan is bullish on the public sector bank State Bank of India (SBI). The firm said that SBI has reported another strong quarter, where numbers were above consensus and our estimates. Net interest income grew by 24 per cent YoY/ 8 per cent QoQ led by strong loan growth and margin improvement. 

The bank reported significantly higher treasury profits amounting to Rs 2,938 crore vs Rs 457 crore in the past quarter due to write-back of mark-to-market (MTM) losses and some gains were booked as yield improved.

Sharekhan has recommended buying shares of the country's largest bank for a target price of Rs 710.

SBI enjoys a dominant position and market share in the Indian banking sector. SBI has a strong presence in both retail liabilities as well as retail asset side along with its corporate relationships (due to size, history, and market knowledge), which are key differentiators for it. In the past two years, results indicate its business strength and past few years’ efforts that have stood the bank in moving towards improving return profile.

ITC Share Price Target

The brokerage firm has maintained a Buy rating on ITC. It said that the Kolkata headquartered company posted yet another quarter of strong performance in Q3FY2023 with revenue (excluding the agri business) up 17.5 per cent and PAT up 21 per cent, with sharp 619 bps YoY improvement in OPM to 38.4 per cent (improved by 400 bps QoQ).

It has recommended buying shares of ITC for a price target of Rs 450. 

ITC is focusing on de-risking its business model by reducing dependence on its core cigarette business  (affected by regulatory and tax hurdles for the past few years) by scaling up the fast-growing consumer goods, PPP, and hotel businesses, Sharekhan said. The company has quickly rebounded from disruption caused by the lockdown and key businesses are operating at normal levels.

Marico Share Price Target

The brokerage firm has maintained Buy rating on one of India's leading consumer products companies in the domestic hair and wellness market with an unchanged price target of Rs 645. Marico is a leading player in the domestic hair and wellness market with a leadership position in categories such as coconut oils, value-added hair oils, and Parachute Rigids within coconut oils.

Zydus Share Price Target

Sharekhan maintained Buy rating on one of the leading pharmaceutical companies of India with a revised price target of Rs 572. The research report said, "For Q3FY23, a better product mix drove up profits strongly. Revenue grew at 19.8% y-o-y to Rs 4,362 crore (versus internal and street estimates of Rs. 4,123 crore and Rs. 4,151 crore.) and net profits grew at 23.1% y-o-y to Rs. 622.5 crore (versus internal and street estimates of Rs. 571 crore and Rs. 564 crore). The company is expected to maintain the growth momentum on the back of key product launches in the US and India."

Tata Power Share Price Target

Sharekhan has maintained a Buy rating on India’s largest integrated private power company with presence in power generation, transmission, distribution, trading and Solar EPC with a revised price target of Rs 245. 
 
The report also highlighted key risks including slower-than-expected ramp-up of RE portfolio and expansion in distribution business, lower-than-expected profitability in Solar EPC business and volatility in international coal prices.

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