Finance News : 2 stocks to buy for a profit of up to 40% as recommended by Motilal Oswal

Buy Repco Home Finance for earnings of as much as 40%

Current market value Rs 314
Target value Rs Rs 440
Gains % 40%

Motilal Oswal has recommended shopping for the inventory of Repco Home Finance on the present market value of Rs 314 for an upside goal of Rs 440.

The brokerage says that the administration doesn’t foresee any important/greater provisioning requirement if there aren’t any new COVID waves/lockdowns within the the rest of FY22. It expects credit score prices to be contained at Rs 1 billion in FY22 (with first quarter credit score price already at Rs 783 million).

The administration expects 7-8% mortgage development in FY22. It seems to develop the mortgage e-book to Rs 240 billion (2 instances of its present property underneath administration of Rs 120 billion) by FY26-end.

“We cut our FY22E net profit estimate by 10% to factor in higher credit costs. We estimate a loan growth CAGR of 8% over FY21-24E and model a RoA/RoE of 2.6%/14% over FY23-24E. We have a Buy rating on the stock of Repco Home Finance with a target price of Rs 440 (1 times FY23E price to book value),” the brokerage has stated.

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Kaveri Seeds

Current market value Rs 615
Target value Rs Rs 710
Gains % 16%

Motilal Oswal has set a value goal of Rs 710 on the inventory of Kaveri Seeds, implying a 16% upside from the present ranges.

“Kaveri Seeds first quarter FY22 revenue fell 12% on account of de-growth in the Cotton and Maize, offset by growth in the Hybrid Rice and Vegetables segments. Cotton seed sales volumes were impacted by lower cotton acreage and the use of herbicide-tolerant Bt (HTBt) seeds, which further impacted branded seed sales. Also, the pandemic affected the supply chain, resulting in the lower absorption of cotton hybrids by dealers and distributors and the consequent unavailability for the farmer,” the brokerage has stated.

According to it, the working efficiency was additional impacted by write-offs over authorities dues and the absence of working leverage.

“Factoring in the 1QFY22 performance, we lower our earnings estimate for FY22 by 34% as 1Q contributes 70% to annual revenue. We lower our earnings estimate for FY23 by 11%, primarily due to a decrease in cotton seed sales volumes (7 million packets v/s 7.5 million earlier) as well as margin estimates for the segment.

“We worth the inventory at 13 instances FY23E EPS to reach at a goal value of Rs 710. Maintain the inventory of Kaveri Seeds,” says Motilal Oswal.

Disclaimer

The article is informational in nature, which is taken from the brokerage report of Motilal Oswal Institutional Equities. Please do seek the advice of knowledgeable advisor earlier than shopping for into any of those shares. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and authors don’t settle for culpability for losses and/or damages arising primarily based on info within the article.

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