scorecardresearchFrom Axis Bank to Minda Industries: A look at Kotak Securities' top picks for April

From Axis Bank to Minda Industries: A look at Kotak Securities' top picks for April

Updated: 05 Apr 2022, 12:57 PM IST
TL;DR.

The Nifty recorded an impressive 19 percent gain in FY22 despite challenges on multiple fronts. Going ahead, Kotak Securities believes markets are closely watching how fast the de-escalation of geo-political tensions happens, Fed action and falling commodity prices due to demand pressure. Additionally, strong earnings momentum and continued retail participation should keep the breadth of the market healthy, it added. Let's look at its top picks for April:

Apollo Hospitals: The brokerage has an 'add' rating on the stock with a target at  <span class='webrupee'>₹</span>5,275 per share, indicating an upside of 16.8 percent. As per the brokerage, it is the best-placed hospital network to benefit from evolving healthcare ecosystem. The firm continued its stellar recovery in hospitals in Q3 and its margins are on a roll, it added.

Apollo Hospitals: The brokerage has an 'add' rating on the stock with a target at 5,275 per share, indicating an upside of 16.8 percent. As per the brokerage, it is the best-placed hospital network to benefit from evolving healthcare ecosystem. The firm continued its stellar recovery in hospitals in Q3 and its margins are on a roll, it added.

Axis Bank: The brokerage has a 'buy' call on the stock with a target of  <span class='webrupee'>₹</span>960 per share, indicating an upside of 26 percent. The lender will acquire Citi’s credit card, deposits, wealth management and branches in a deal valued at $1.6 billion, which is value accretive, said the brokerage. It added that while integration challenges remain a key concern, overall it is positive. Kotak further noted that rerating will be driven by performance of core bank. Levers are quite healthy to deliver closer to its peers on operating metrics, it said.

Axis Bank: The brokerage has a 'buy' call on the stock with a target of 960 per share, indicating an upside of 26 percent. The lender will acquire Citi’s credit card, deposits, wealth management and branches in a deal valued at $1.6 billion, which is value accretive, said the brokerage. It added that while integration challenges remain a key concern, overall it is positive. Kotak further noted that rerating will be driven by performance of core bank. Levers are quite healthy to deliver closer to its peers on operating metrics, it said.

Blue Dart: The brokerage has a 'buy' call on the stock with a target at  <span class='webrupee'>₹</span>7,975 per share, indicating an upside of 16.5 percent. The firm reported strong set of numbers for Q3FY22 plus the economic recovery bodes well for Bluedart, stated Kotak. It expects earnings to grow by 20.3 percent in FY23E and grow by 19.0 percent in FY24E.

Blue Dart: The brokerage has a 'buy' call on the stock with a target at 7,975 per share, indicating an upside of 16.5 percent. The firm reported strong set of numbers for Q3FY22 plus the economic recovery bodes well for Bluedart, stated Kotak. It expects earnings to grow by 20.3 percent in FY23E and grow by 19.0 percent in FY24E.

Hindalco: The brokerage has a 'buy' call on the stock with a target at  <span class='webrupee'>₹</span>650 per share, indicating an upside of 14 percent. As per the brokerage, the firm announced US$600 crore new growth capex to be spent over five years. The new projects are return accretive and could potentially add US$130 crore EBITDA, noted Kotak. It added that the recent capital allocation lays more focus on growth over deleveraging.

Hindalco: The brokerage has a 'buy' call on the stock with a target at 650 per share, indicating an upside of 14 percent. As per the brokerage, the firm announced US$600 crore new growth capex to be spent over five years. The new projects are return accretive and could potentially add US$130 crore EBITDA, noted Kotak. It added that the recent capital allocation lays more focus on growth over deleveraging.

Infosys: The brokerage has a 'buy' call on the stock with a target at  <span class='webrupee'>₹</span>2,100 per share, indicating an upside of 10 percent. Demand environment is promising; tech spending remains strong, noted the brokerage, adding that cCloud, data, AI, automation and cyber security are key client priorities. Demand will remain strong post cloud migration phase as well, Kotak said. It expects earnings to grow by 15.6 percent in FY23E and 13.3 percent in FY24E.

Infosys: The brokerage has a 'buy' call on the stock with a target at 2,100 per share, indicating an upside of 10 percent. Demand environment is promising; tech spending remains strong, noted the brokerage, adding that cCloud, data, AI, automation and cyber security are key client priorities. Demand will remain strong post cloud migration phase as well, Kotak said. It expects earnings to grow by 15.6 percent in FY23E and 13.3 percent in FY24E.

Minda Industries: The brokerage has an 'add' call on the stock with a target at  <span class='webrupee'>₹</span>1,160 per share, indicating an upside of 24 percent. The brokerage noted that Q3FY22 EBITDA of the firm was 8 percent above estimates due to better-than-expected revenue print.• Strong order wins across segments and EV segment order book is also shaping up well, said Kotak. It expects Minda Industries to continue to outperform the industry growth and forecasts its earnings per share (EPS) to grow by 85.2 percent in FY23E and 32.6 percent in FY24E.

Minda Industries: The brokerage has an 'add' call on the stock with a target at 1,160 per share, indicating an upside of 24 percent. The brokerage noted that Q3FY22 EBITDA of the firm was 8 percent above estimates due to better-than-expected revenue print.• Strong order wins across segments and EV segment order book is also shaping up well, said Kotak. It expects Minda Industries to continue to outperform the industry growth and forecasts its earnings per share (EPS) to grow by 85.2 percent in FY23E and 32.6 percent in FY24E.

First Published: 05 Apr 2022, 12:57 PM IST