High Conviction Picks: Centrum Broking lists 10 top stocks for September

SBI: The brokerage has a target price of ₹550/600 for the largest public sector lender. According to Centrum, SBI is trading at lower valuation as compared to its private sector peers. The NPAs are reducing and bank is comfortably placed to participate in upcoming growth opportunities also, it added. State Bank of India (SBI) is a Public Sector Banking and Financial services entity headquartered in Mumbai with a legacy of over 200 years. It is the largest Indian Bank with 25% market share in deposits, serves over 44 crore customers through its vast network of over 22,000 branches, 58,500 ATMs, 66,000 BC outlets.

United Spirits: The brokerage has a target of ₹1100 for the stock, indicating an upside of over 36 percent. As per the brokerage, India has a very young population with median age of 27 years and a population with increasing per capita income which represents a tremendous growth opportunity. United spirits is now debt free and financials are improving, hence it is a good investment with a long term view, said Centrum. USL is is the leader in the Indian spirits market, with 33% volume share. It has an established portfolio of 120 brands across the price spectrum.

Sun Pharma: The brokerage has a target price of ₹1,000 for the stock, indicating a potential upside of 13 percent. Centrum noted that Sun Pharma will be a long-term beneficiary of the improved performance of the healthcare sector globally. It has been showing improved sales in domestic business and its US business is also showing traction, added the brokerage. The firm's debt is reducing and margins are coming back due to cost-cutting measures and results were also very strong, which are all key positives. It is the fourth largest specialty generic pharmaceutical company in the world with global revenues of over $4.5 billion.

ICICI Bank: The brokerage has a target price of ₹950/1000 for the stock, indicating an upside of 8.5/14 percent. Considering sharp improvement in asset quality, decline in provisions in its corporate loan book, large and secured retail loan book and adequate/excess covid related provision will help ICICI bank to come to normalcy faster, stated the brokerage. It added that ICICI Bank also has stakes in other group listed cos like ICICI Securities, ICICI Pru Life and ICICI Lombard General Insurance which is also a positive. ICICI Bank is a leading private sector bank in India. The Bank’s consolidated total assets stood at Rs. 15.3 trillion as on March 31, 2021. It currently has a network of 5,288 branches and 14,040 ATMs across India.

Dabur: The brokerage has a target price of ₹650/700 for the stock implying a potential upside of 14/23 percent. As per Centrum, Dabur has a very strong portfolio of brands that are capable of giving higher than industry growth. Focus on building capabilities, rural penetration and focus on brands can lead to superlative growth in the long term, it added. Dabur is the fourth largest FMCG Company in India with Revenues of over ₹9,500 Crore & Market Capitalization of over ₹100,000 Crore. Dabur's products also have a huge presence in overseas markets and are today available in over 120 countries across the globe.

Tata Consumer: The brokerage has a target price of ₹900 for the stock implying an upside of 10 percent. Tata Consumer represents very good investment and trading opportunity, said the brokerage. With focus on strong brands and backing of Tata group, the company is poised for good medium-term growth, it added. Centrum expects the growth in consumer business to continue in the near and medium term as well. Tata Consumer Products, is home to well-loved brands - Tata Tea, Tetley, Tata Salt, Eight O’Clock Coffee, Himalayan Water and emerging brands like Tata Sampann, Tata Soulfull, Tata Gluco Plus and Tata Water Plus. Its brands are present in over 40 countries with a diverse workforce spread across the world.

HCL Tech: The brokerage has a target price of ₹1,350 for the stock, implying a potential upside of 45 percent. HCL Tech posted decent result in Q1 and has guided that growth momentum is likely to continue in coming quarters as well, said the brokerage. With some pressure coming in on margins, the coming quarter results should result is margins coming back slowly, it added. The valuations are very attractive with very good dividend yield, Centrum further stated. HCL Tech is a leading global IT services company, which is ranked amongst the top five Indian IT services companies in terms of revenues.

Zee: The brokerage has a target price of ₹350 for the stock, indicating an upside of 41 percent. According to the brokerage, Zee-Sony merger will create a media bemoth company with more than 75 channels in different languages. Post merger it has potential to dominate in digital media and broadcasting business, Centrum added. Sony will infuse ₹11,300 crore in the merged entity along with expected EBITDA of ₹5000 crore to be generated annually, informed Centrum, which is a huge financial warchest for investment in content and OTT platform. Zee Entertainment Enterprises is mainly in the following businesses: Broadcasting of Satellite Television Channels, Space Selling agent for other satellite television channels, and Sale of Media Content i.e. programs / film rights / feeds /music rights.

HDFC: The brokerage has a target price of ₹2800/3000 for the stock, indicating a potential upside of 14/22 percent. HDFC is a very attractive play in India’s real estate growth story. With lowest interest rates in decade, there is tremendous demand for homes across India and HDFC is the best play in the sector, pointed out Centrum. It has low NPAs as compared to industry average and higher growth rates, added the brokerage. India’s demographic advantage plays a very vital role for long term investment play in HDFC, it further highlighted. HDFC is India’s pioneer housing finance company with over 9 million home units financed. It was founded in 1977 and has over ₹6.2 trillion of loan assets.

LIC: The brokerage has target price of ₹850, indicating a potential upside of 30 percent. Centrum noted that LIC is trading at a discount to its Embedded Value which offer significant value comfort. As seen from Q1 results, LIC still is a dominant player and despite its huge size is still increasing market share, it added. The regulatory changes done with respect to the PAR and Non PAR business is likely to significantly increase the profitability in the long run, stated the brokerage. LIC is India’s largest life insurance company with 2048 fully computerised branches, 113 divisional offices. It has AUM of ₹41 trillion.