As seesaw moves continue on Dalal Street, HDFC Securities has handpicked half a dozen stocks from different industries ranging from FMCG to pharmaceuticals. The brokerage's target prices for these stocks—all priced between Rs 596 and Rs 8,244 apiece as of May 8—implies an upside of as high as 21 per cent from the current levels.  

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

Here's the list of six stocks, along with ratings and targets:

Midcap Stock Pick | Sanofi India

HDFC Securities has a 'buy' rating on Sanofi India with targets of Rs 9,489 and Rs 9,988 from a perspective of 2-3 quarters.

“We estimated a 9 per cent revenue CAGR led by 9.3 per cent growth from the domestic formulation sales over CY23-25E,” according to the brokerage.

The demerger of the consumer healthcare business could help unlock value for the company as typically the branded consumer business fetches better valuation, HDFC Securities adds. 

The brokerage projects a margin expansion of 120 bps in Sanofi led by a change in the business mix and higher revenue contribution from its domestic branded business.

Largecap Stock Picks | Nestle India, Britannia, Marico, UBL, USL

United Breweries Ltd

The brokerage has a 'buy' call on United Breweries Ltd (UBL) with targets of Rs 2,245 and Rs 2,401 from a perspective of 2-3 quarters.

United Spirits Ltd

HDFC Securities also has a 'buy' rating on United Spirits Ltd with targets of Rs 1,319 and Rs 1,386 over a horizon of 2-3 quarters.

The brokerage expects innovation and premiumisation to drive revenue growth for the company.

“The company sold off 32 brands under the Popular category via a slump sale in 2022, following its premiumisation strategy,” it adds.

Nestle India

HDFC Securities has an ‘add’ rating on the Nestle stock with a target of Rs 2,750.

The brokerage is of the view that Nestle India has the potential for double-digit revenue growth in the medium term unlike its peers, which are struggling with high single-digit growth.

They also expected the EBITDA margin to expand c100bps from FY24-27 to 25 per cent, despite being at a decadal high, owing to operational scale improvements, premiumisation, and cost optimisation initiatives.

Marico

HDFC Securities has a ‘buy’ call on the Marico stock with a target of Rs 650.

The brokerage expects the company's revenue, EBITDA and PAT to increase at CAGRs of 6 per cent, 13 per cent, and 13 per cent, respectively over FY23-26.

Britannia Industries

HDFC Securities has an ‘add’ rating for the Britannia Industries stock with a target of Rs 5,556.

The company’s biscuits portfolio can deliver mid to high single-digit volume growth over the medium term, according to the brokerage. 

“We recommend investors with a long-term perspective buy the stock on every dip. The company has a solid track record with a compound annual growth rate of 9 per cent, 18 per cent, and 18 per cent for revenue, EBITDA and PAT, respectively over the last decade,” says HDFC Securities. 

Its analysts believe that there may not be any significant movement in the stock price in the short term since there are no immediate factors that could influence trading volume. Any potential increase in the stock price will likely depend on the company's ability to achieve its projected double-digit growth in trading volume, which is set to commence in the second quarter of fiscal year 2025, and whether it can deliver on its promises, they add. 

Catch all the latest stock market updates here. For all other news related to business, politics, tech and auto, visit Zeebiz.com.