Looking for stock ideas? Yes Securities lists 4 stocks to buy in June with upside up to 40%

Maruti Suzuki | Buy | TP: ₹9,957 | Upside: 25% Maruti Suzuki is the market leader in the domestic passenger car industry commanding a market share of 45 percent, noted the brokerage. It added that the firm is targeting a 25 percent growth in volumes for FY23 to surpass an output of 2 million, its highest ever in a year. It pointed out that the company will introduce new products across price points, from its entry-level hatchback to a premium crossover and a mid-sized sports utility vehicle (SUV), to win back market share and meet the target. Despite raw material inflation, gross margins expanded 180 bps QoQ at 26.5 percent (+180 bps QoQ), said Yes Securities. It expects 500 bps margins expansion over FY22-24E resulting in a healthy EBIDTA CAGR of 53 percent.

SBI | Buy | TP: ₹655 | Upside: 40% With as much as 74% of the loan book being floating rate, management is confident of NIM expansion going forward, said the brokerage. It added that the management believes corporate loan growth to be healthy. The unutilised corporate working capital limits amounted to ₹2.76 lakh crore as of March compared with ₹3.1 lakh crore as of December, noted Yes. Furthermore, Xpress credit will remain a growth area, being loans to corporate salary account customers, which number is 1.75 crore. The penetration of these customers so far has been 27 percent. The broekrage also pointed out that the management sees a healthy opportunity in forex income and cross-sell, where the fee income for FY22 has gone up 44 percent and 32 percent YoY, respectively.

Tech Mahindra | Buy | TP: ₹1,380 | Upside: 17% Deal wins are healthy for Tech Mahindra; the co. reported deal wins of $1 billion in Q4FY22 thereby providing revenue growth visibility, noted the broekrage. It further stated that the IT firm is expected to benefit from rising 5G-related deal momentum as it remains highly dependent on the telecom vertical (40 percent of revenue). The need to be 5G ready would continue to drive 5G related deals; while the enterprise vertical seems to be getting traction led by BFSI and Technology verticals, Yes explained. Pricing action, increasing utilization, higher offshoring trend, and improved employee pyramid would also support operating margin going ahead, the brokerage pointed out.

Automotive Axles | Buy | TP: ₹2,141 | Upside 32% The firm is number one axle as an independent manufacturer and number two in brakes. The firm's focus is not only on the commercial vehicle but also penetrating defense, off-highway, construction business and other competent businesses, said Yes. The management feels the market is very good, the demand outlook is very strong, and they expect the momentum continues to pick up, it added. Yes expects AAL to outperform the industry supported by its focus on 4 new growth pillars like an increased contribution from new products, focus on exports, and new segment entry. It also sees the margins to improve from the current level supported by cost reduction measures taken by the management, expected better product mix and operating leverage with higher utilization levels.