From Federal Bank to Sobha: Here are 15 top stocks picks by Angel One for June

Federal Bank: The brokerage has a target price of ₹120 for the stock indicating an upside of 32 percent. As per the brokerage, overall asset quality for the quarter improved in Q4FY22, which was in line with its expectations. It expects asset quality to improve further in FY23 given the normalization of the economy. It also sees Federal Bank posting an NII/PAT CAGR of 24.9%/42.7% between FY22-24 and remains positive on the lender.

HDFC Bank: The brokerage has a target price of RS 1,700 for the stock, indicating an upside of 23 percent. HDFC Bank is India's largest private sector bank with a loan book of ₹13.68 lakh crore in Q4FY22 and a deposit base of ₹15.6 lakh crore, said Axis. It added that Q4FY22 numbers were below expectations due to a change in portfolio mix towards corporate. Given best in class asset quality, and expected rebound in retail credit growth Angel is positive on the bank given reasonable valuations at a 2.3xFY24-adjusted book, which is at a discount to historical averages.

AU Small Finance Bank: The brokerage has a target price of ₹1,695 for the stock, indicating an upside of 34 percent. AU Small Finance Bank is one of the leading small finance banks with a total loan AUM of ₹47,831 crore at the end of Q4FY22, said Angel One. It has a well-diversified geographical presence across India, it added. AU continued to report very strong numbers in Q4FY22 as GNPA/NNPA reduced by 62/79 bps QoQ to 1.98% and 0.5% of advances. The brokerage expects AU SFB to post a robust NII/PAT CAGR of 35.2%/38.7% between FY22-24 on the back of an AUM CAGR of 34.8%. Reducing the cost of funds will also help NIM expansion going forward, it added. It believes that the worst is over for the bank and expects continued improvement in asset quality in FY23, which should lead to a rerating.

Ashok Leyland: The brokerage has a target price of ₹164 for the stock, indicating an upside of 19 percent. FY21 medium and heavy commercial vehicle industry production volumes have been at the lowest levels seen in 12 years and the brokerage believes that the company is ideally placed to capture the growth revival in the commercial vehicle (CV) segment. It believes that the firm will be the biggest beneficiary of the Government's voluntary scrappage policy and hence rate the stock a BUY.

Sona BLS Precision: The brokerage has a target price of ₹843 for the stock, indicating an upside of 46 percent. Sona BLW is one of India's leading automotive technology companies that derives 40% of its revenues from Battery Electric Vehicles (BEV) and Hybrid Vehicles, noted Angel. The company's combined motor and driveline capabilities have enabled them to gain market share across its products, especially for products related to EV/BEV, it added. Given the traction in the BEV/Hybrid Vehicle space, it believes that Sona will continue to command a higher multiple, which is justified by 49% earnings CAGR over FY21-24E.

Ramakrishna Forgings: The brokerage has a target price of ₹256 for the stock, implying an upside of 55 percent. Ramkrishna Forgings (RKFL), a leading forging player in India and among a select few having heavy press, stands to benefit from a favorable demand outlook for the Medium & Heavy Commercial Vehicle (M&HCV) industry in domestic and other key geographies in the near term, stated Angel. RKFL has been able to add new products which have higher value addition. Better mix along with operating leverage is expected to result in 550 YoY bps EBITDA margin improvement in FY22E, noted the brokerage.

Suprajit Engineering: The brokerage has a target price of ₹485 for the stock, indicating an upside of 49 percent. Suprajit Engineering (SEL), is the largest supplier of automotive cables to the domestic OEMs with a presence across both 2-Wheelers and passenger vehicles. SEL has grown profitably over the years and as a result, it boasts a strong balance sheet (net cash), said Angel. It believes SEL is a prime beneficiary of a ramp-up in production by OEMs across the globe and is well insulated from the threat of EV (is developing new products). Its premium valuations are justified in the brokerage's opinion owing to its strong outlook and top-grade quality of earnings.

PI Industries: The brokerage has a target of ₹3,440 per share for the stock, indicating an upside of 28 percent. PI Industries is a leading player in providing Custom synthesis and manufacturing solutions (CSM) to global agrochemical players. The company has been increasing its share of high-margin CSM business driven by strong relationships with global agrochemical players, noted the brokerage. It expects the firm to post a revenue/PAT CAGR of 17%/24% between FY22-FY24 driven by 20% growth in the CSM business over the next 2-3 years. Moreover, foray into new segments like electronic chemicals and APIs will also help drive growth over the next 3-4 years for the company, it added.

Jubilant Ingrevia: The brokerage has a target price of ₹700 for the stock, indicating an upside of 43 percent. The company derives 56% of its revenues from the life science chemicals division while the specialty chemicals and nutrition & health solution business account for 28% and 15% of revenues respectively, stated the brokerage. At current levels the stock is trading at a P/E multiple of 13.5xFY24 EPS which is at a significant discount to other chemical companies, it added. Therefore, it believes that there is value in the stock at current levels and hence rates it a BUY.

HCL Technologies: The brokerage has a target price of ₹1,348 for the stock, indicating an upside of 30 percent. HCL Tech is amongst the top four IT services companies based out of India. As per Angel One, strong deal wins will help drive growth in the services business, which should make up for the continued softness in the product business. At CMP the stock is trading at a significant discount to the other large-cap IT companies like Infosys and TCS and offers tremendous value at current levels given market leader status in Infrastructure management, it added.

Stove Kraft: The brokerage has a target price of ₹805 per share for the stock, indicating an upside of 49 percent. Stove Kraft is engaged in the business of manufacturing & selling Kitchen & Home appliances products under the brand name of 'Pigeon' and 'Gilma'. In the Pressure Cookers and Cookware segment, over the last two years, the company has outperformed Industry and its peers noted Angel One. Going forward, it expects the firm to report healthy top-line and bottom-line growth on the back of new product launches, strong brand name and wide distribution network.

Sobha: The brokerage has a target price of ₹750 for the stock, indicating an upside of 44 percent. Sobha operates in Residential & Commercial real estate along with the Contractual business. Ready to move inventory and under construction, inventory levels have moved down to their lowest levels due to which customers now prefer the branded players like Sobha Developers, noted Angel One. The firm expected new projects/phases spread over 13.53mn sqft across 7 cities. The majority of launches will be coming from existing land banks, it added.

Amber Enterprises: The brokerage has a target price of ₹3,850 per share for the stock, indicating an upside of 55 percent. Amber Enterprises is the market leader in the room air conditioners outsourced manufacturing space in India. Amber plans to increase revenues from components and exports, noted the brokerage. It added that going forward, it expects healthy profitability on the back of its foray into the Commercial AC segment, entry into export markets, and participation in the PLI scheme.

Oberoi Realty: The brokerage has a target price of ₹1,000 for the stock, indicating an upside of 31 percent. Oberoi Realty is a real-estate company, focusing on the MMR region. The company has reported a strong set of numbers in Q4FY22, the brokerage expects residential real-estate growth momentum to continue for the next couple of quarters. Angel added that it has seen good consolidation across India towards top-10 players. Top-10 players now hold 11.2 percent market share as compared to 5.4 percent in 2017, it added.

Devyani International: The brokerage has a target price of ₹219 per share for the stock, indicating an upside of 34 percent. The firm is Yum Brands’ largest franchisee in India, with more than 800 stores including KFC, Pizza Hut and Costa Coffee. Going ahead, Angel One expects the firm to add 200 stores per annum which would drive strong revenue growth. Lower capex and improving store-level economics also would boost the operating margin going ahead, it added. Going forward, it expects the firm to report strong top-line growth and improvement in operating on the back of aggressive store addition, improving store unit economics and strong brand.