Stock to buy: Kotak Securities lists 8 top picks including Britannia, ICICI Bank, Infosys for April

Britannia: The brokerage has an ‘add’ rating for the stock with a target of ₹4,775, implying an upside of 10 percent. The brokerage noted that Britannia has delivered a volume growth of 4 percent YoY, which is decent in the context of steep price increases. Easing vegetable oil, ongoing capacity expansion & steady execution augur well for the stock, it said. It expects the firm's earnings to grow by 17.3 percent in FY24E and 14.9 percent in FY25E. The stock is currently trading at a valuation of 40.8x P/E FY25E EPS.

Cummins India: The brokerage has a ‘buy’ call on the stock with a target price of ₹1,810, indicating an upside of 11 percent. As per Kotak, the firm's recent management commentary suggests limited margin/business risks from the competition, parent (royalty), and exports. Exports are doing well and have started to see the benefit of growing industrial portfolio, noted the brokerage. The company benefitted from an uptick in demand from Asia Pacific, Middle East & Latin America, it added. Kotak has increased estimates by 2-4 percent on higher operating (EBITDA) margin estimates.

ICICI Bank: Kotak Securities sees the lender rising 22 percent in the next 1 year. It has a ‘buy’ call with a target of ₹1,070. ICICI Bank remains one of Kotak's top picks on the back of a solid 35 percent YoY earnings growth and 30 percent YoY operating profit growth. Its net interest margin also expanded 30 bps QoQ to 4.7 percent and asset quality metrics show no near-term signs of stress, it noted. So far, the bank has been able to demonstrate its strength, it added.

Infosys: The brokerage is bullish on the stock with a target price of ₹1,700, indicating an upside potential of 19 percent. According to Kotak, Infosys can drive both modernization and cost-efficiency focus for enterprises. The portfolio of services is well aligned with clients’ spending priorities in the tech upgrade cycle with lower legacy drag, it added. The firm's business is well-positioned in the current demand environment, stated the brokerage, adding that it expects earnings to grow by 15 percent in FY24E and 15.9 percent in FY25E.

M&M: The brokerage has a ‘buy’ call on the stock with a target price of ₹1,475, indicating an upside of 27 percent. While the near term may remain subdued amid concerns around El Nino's impact on tractor sales and growth moderation in the UV segment, the brokerage believes M&M’s fundamentals remain intact. It expects the company to continue to gain market share in the SUV segment and estimates M&M’s EBITDA margin to improve to 12.9 percent in FY25E from 12.2 percent in FY23E. It also forecasts earnings per share (EPS) to grow by 8.7 percent in FY24E and 12.9 percent in FY25E.

RIL: The brokerage is bullish on the stock with a target of ₹2,900, indicating an upside of 24 percent. At 30 lakh retailer partners currently, JioMart’s network is large enough for the company to speed up distribution of own brands, noted the brokerage. It further added that significant JioMart partners said its prices were lower than other distributors. JioMart has commenced sale of its private label to kiranas with competitive pricing and the survey of grocery retailers showcased that JioMart’s share within kirana wallet has stabilized.

Sun Pharma: Kotak has an ‘add’ call on the stock with a target price of ₹1,140, an upside of 16 percent. The brokerage noted that specialty continues to forge ahead with Deuruxolitinib as a promising addition. Domestic outperformance will continue despite minor Q3FY23 hiccup and continued execution in specialty provides upside risk to its margin estimates, said Kotak. Sun Pharma remains excited about growth opportunities in its current specialty portfolio, stated Kotak, adding that it believes the firm's existing specialty portfolio is close to breakeven. 

Tata Steel: The brokerage sees the steel major rising 24 percent to ₹130 in the next 1 year, and has a ‘buy’ call. As per the brokerage, domestic steel margins have bottomed out and should recover to mid-cycle levels. Also, multiple upcoming growth and margin accretion projects should further aid earnings, it added. Weakness in Europe is likely to continue in the near term but the worse is behind, further highlighted Kotak Securities. It expects Tata's standalone margins to recover to over 14,000/ton in FY24/25E. A potential closure or divestment of the UK business provides upside risks, it added.