Stocks to buy: Kotak Securities lists 7 top picks for May including HDFC Bank

Clean Science and Tech: The brokerage has an 'add' rating on the stock with a target price of ₹1,600, indicating an upside of around 11 percent. As per the brokerage, December quarter earnings of the stock topped estimates on sharply improved margins leading to a positive outlook for demand and growth. New products and capacity expansions are also expected to drive rapid growth in coming years, it added. Kotak expects EPS to grow 21.6% in FY24E and 35.3% in FY25E.

Dalmia Bharat: The brokerage has an ‘add’ rating on the stock with a target price of ₹2,160, indicating an upside of 8 percent. Kotak expects strong volume growth and lower energy prices to aid margins in FY24E. Strong growth visibility, discipline in capital allocation and a strong balance sheet are also some key positives, it added. It estimates the company's earnings to grow by 119.9% in FY24E and by 32.5% in FY25E.

Global Health: Kotak has an ‘add’ call on the stock with a target price of ₹550, implying a 6.5 percent upside. The brokerage noted that Medanta is a leading hospital company focused on tertiary and quaternary care. Its unique strategy is of having a presence in underserved major cities in North & East India, it further said, adding that the firm's execution uptick, and strategy pivot augurs well for strong medium-term growth. Kotak also expects the company's healthy Free Cash-Flow (FCF) generation to continue despite the ongoing expansion.

HCL Tech: The brokerage has a ‘buy’ call on the stock with a target of ₹1,225, implying an upside of 15%. Kotak noted that FY24E revenue growth guidance of 6-8% is ahead of its estimate. However, EBIT margin guidance of 18-19 percent for FY24 was lower than its estimate of 18-20%, it added. Kotak expects earnings (EPS) for the IT firm to grow by 8.5% in FY24E and 12.4% in FY25E.

HDFC Bank: The brokerage has a ‘buy’ call on the stock with a target price of ₹1,925, indicating an upside of 14 percent. As per the brokerage, key clarifications for the merger have come through from the RBI which is a positive. Further, PSL (priority sector lending) relaxation is helpful but it has shifted focus to deposit mobilization, added Kotak Securities. It values the bank at 2.7x book and ~17x 2025E EPS for RoEs at 16% levels and 15% CAGR - (adjusted for merger), respectively.

Hindustan Unilever: The brokerage is bullish on the stock with a target price of ₹2,750, indicating an upside of 12 percent. As per the brokerage, the company expects price growth to taper off and volume growth to gradually recover. However, currently, volume growth and margin recovery lag expectations, it noted. It estimates earnings to grow 15.5% in FY24E and 12.4% in FY25E.

Macrotech Developers: The brokerage has a ‘buy’ call on the stock with a target price of ₹1,330, implying a potential of 43 percent upside. Lodha delivered a strong all-round performance in Q4FY23 with healthy pre-sales performance aided by strong launch activity, said the brokerage. It further added that the firm achieved its target, setting itself for pre-sales of ₹14,500 cr (+20% yoy) in FY24. The firm is well-placed to gain further market share and targets a 20% CAGR in pre-sales in FY23-26E, it informed.