December 2021 Picks: Axis Securities recommends these 16 stocks to maximize wealth - Check target price and other details

The higher loan growth, improving operating profits, and a strong provision buffer coupled with a strong deposit franchise will help the bank achieve ROAE/ROAA expansion over FY22-23E, as per Axis Securities. It is believed that valuation-wise, the bank has further scope for expansion vis-à-vis its peers. A BUY on the stock with a revised target price of Rs 975/share (SOTP basis core book at 2.8x FY24E and Rs 182 Subsidiary value) is maintained. Source: ICICI Bank Cares Twitter

HCLT has a resilient business structure from a long-term perspective, as per  Axis Securities. It recommends a BUY and assigns a 24x P/E multiple to its FY24E earnings of Rs 65.9/share which gives a TP of Rs 1,390/share, an upside of 22% from CMP. Source: hcltech.com

Bajaj Auto is well-placed to capitalize on demand normalization and premiumization trends in the 2W industry which should support profitability and operational performance going forward, as per  Axis Securities. Moreover, it is expected the company to gain further market share in exports, driven by its market leadership position, brand equity, and enhanced distribution network. Bajaj Auto remains our preferred pick in the 2W segment given reasonable valuations and strong medium-term growth prospects. Axis Securities maintains their BUY rating on the stock and value it at 17x FY24E EPS to arrive at a TP of Rs 4,500. Source: Reuters

Tech Mahindra has a resilient business structure and better revenue growth visibility from a long-term perspective but trading at discount as compared to its Indian peers, as per  Axis Securities. It recommends a BUY and assign 23x P/E multiple to its FY23E earnings of Rs70.0/share, which gives a TP of Rs. 1,700/share. Source: Tech Mahindra Twitter

MSIL could emerge as the biggest beneficiary of demand recovery in the post-COVID period, considering its stronghold in the Entry-Level segment and a favorable product lifecycle, as per Axis Securities. New launches, targeted at filling the gaps in its portfolio, are likely to improve the overall product mix. The company would gain further market share, driven by an expected shift towards petrol & CNG vehicles. Going forward, it is expected that new product launches to resume with a mix of product upgrades and new model launches. Is is also expected that the company’s volumes to witness a strong growth CAGR of 16% over FY21- 24E. Axis Securities recommends  a BUY rating on the stock with a TP of Rs 8,500 valuing the stock at 25x its FY24E EPS, implying an upside of 20% from CMP. Source: Reuters

 SBIN’s unsecured lending profile is robust with >90% comprising salaried government employees. Retail book traction  at ~15% remains healthy, as per  Axis Securities. It is supported by home loans and express credit and further improvement are likely in the coming quarters. The bank’s market share in Home loans and Auto Loans is over 30%. The bank’s ROAs are expected to recover back to the historical range of 0.7%-1% after a 6-year down-cycle on account of contained stress formation, recoveries from legacy NPAs, and broad-based growth in the loan book. FY22-23E. It maintains a BUY on the stock with a target price of Rs 645/share (SOTP basis core book at 1.3x and subsidiaries at Rs 211). Source: PTI

Airtel is gaining business momentum backed by strong customer addition and market share gains, as per  Axis Securities. The management is confident of gaining further momentum with favourable macroeconomic conditions diving data consumption, increasing penetration in tier 2 and 3 cities, rising use of DTH and other digital services. The management also guided for the ARPU of 200/month by FY22-end and eventually to 300/month levels. It recommends a BUY rating on the company with SOTP based valuation at Rs 820/share aided by superior margins, stronger subscriber growth, and higher 4G conversions. TP indicates an upside of 13% from CMP. Source: Reuters

FB is cautiously building a loan mix toward high-rated corporate and retail loans, as per Axis Securities. The bank’s liability franchise remains strong with CASA plus Retail TD of +90% and one of the highest LCR amongst banks. Restructuring levels are also in control. The management intends to keep PCR in the range of 65-70% as a high proportion of the book is secured and LGDs historically has been below 40%. FB has been consistently improving across parameters including Efficiency, Deposits, and Fee Income, among others. It maintains a BUY with a target price of Rs 125/share. Source: Federal Bank Twitter

The company reported encouraging Q2FY22 results with Revenue/Volume growth of 7%/6% YoY respectively, as per  Axis Securities. It reported healthy EBITDA Margins of 24% and EBITDA/Tonne of Rs 1,218 despite severe cost headwinds. Axis Securities believes that the company is well-positioned to grow its revenue and profitability moving forward, supported by a) A revival of cement demand in its key markets in both trade and non-trade segments, b) Cost optimization measures, and c) Increasing premium cement sales aided by capacity expansions. It recommends a BUY rating on the company and value the stock at 13.5x FY23E EV/EBITDA to arrive at a target price of Rs 2,520/share, implying an upside potential of 35%. Source: Dalmia Bharat Twitter

With Covid-19 cases declining, the likelihood of a normal season in CY22, and economic re-opening driving out-of-home consumption, we expect VBL to gain further in-roads in the acquired territories of South and West India, as per  Axis Securities. This shall aid in market share gains on the back of aggressive placement of visi-coolers in these territories and the addition of new distributors as well as scaling up of recent product launches (energy drink) across the territories. While the rise in crude oil prices may pose near-term pressure on margins, the company’s strategic measures to use light-weight PET bottles will be a structural cost optimization measure, thus mitigating RM pressures. geographies, and 5) Positive cash flow generation. Axis Securities raises TP to Rs 1,050/share valuing it at 18x EV/EBITDA multiple its CY23 estimate. Source: varunpepsi.com

NFIL entered into the multi-year deal of Rs 2,800 Cr in 2020 with a global company to manufacture and supply the high performance product (HPP) in the fluorochemicals space, as per  Axis Securities. The company has strategically carved this as a different business vertical to explore other fast growing opportunities for the application of fluorine in this high-margin segment. Factoring in the sharp correction in prices and a fair earnings visibility, Axis Securities maintains their BUY recommendation and upgrade the TP to Rs 4100/share given the fair earning visibility. Source: nfil.in

AL continues to focus on reducing its dependence on the cyclical truck business by increasing the revenue share of Exports, Defence, Power Solutions, LCV, and after-sales spare parts business, as per Axis Securities. It remains well-positioned to benefit from a strong recovery in the CV cycle on the back of new product launches and a well-diversified product portfolio. Axis Securities maintains the BUY rating on the stock and value it at 18x FY24E EPS to arrive at a TP of Rs 175. Source: Ashok Leyland Twitter

KIMS has planned to add an incremental bed capacity of 1,500 (50%) from the current bed capacity of 3,065 over the next 36-40 months. This could lead to a total bed capacity of 4,500, as per  Axis Securities. It is planning to add an incremental 500 capacity in current hospitals to meet growing demand. KIMS is expected to incur a Capex of Rs 300 Cr per year over the next 3-4 years to create these of Rs 300 Cr per year over the next 3-4 years to create these. High RoIC (32%) led to generate a strong cash flow of ~ Rs 300 Cr. every year enabling the company to achieve net debt-free status. Source: kimskarad.in

EQSFB has been proactively reducing the share of MFI loans to build a strong, diversified, and secured product-dominated book, as per  Axis Securities. The bank continues to witness good traction in the deposits, especially retail deposits and expects it to improve further. Improving liability franchise will help it lower CoF which will support NIMs as the bank shifts towards lower yielding secured lending. The bank’s operating efficiency is improving as a result of improving branch productivity and effective leveraging of technology to source deposits. However, the near-term Opex is expected to remain elevated as the bank invests in building a franchise and achieving technological advancements. This is expected to push ROA/ROE expansion to FY23E. EQSFB remains wellcapitalised to fuel growth in the medium term with Tier I at 21%. The board has approved a QIP of Rs 1,000 Cr to meet the minimum public shareholding guidelines to expedite the reverse merger process. further support our re-rating rationale. Axis Securities recommend a BUY rating on the stock with a target price of Rs 78 (2.1x Sept’23E ABV), implying an upside potential of 29% from CMP. Source: equitasbank.com

 MTEP has revised upwards its volumes guidance for FY22 to 18-20% (15-17% earlier), as per  Axis Securities. It also expects to report 18-20% volume growth in FY23E. Additionally, it has raised its EBITDA/kg target to Rs 42/kg for FY22 from Rs 36-40/kg. Venturing into new segments like IBM would enable MTEP to report a topline CAGR of 20% over FY21-24E. Source: moldtelpackaging.com

While COVID 2.0 is expected to impact the company’s near-term outlook, it is believed that its long-term growth prospects remain intact, as per  Axis Securities. Amber is focussing on a) Continuous client addition, b) Capacity expansion for availing PLI benefits, c) Expansion in the HVAC segment (Central AC’s -VRF), d) Augment exports, and e) Diversification through mobility business (Sidwal Subsidiary). Source: ambergroupindia.com

(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.)