Stock brokerages including Nirmal Bang, JM Financial, Geojit Financial, and Motilal Oswal have come out with research reports on select stocks namely ITC, Zomato, CIE Automotive, and AU Small Finance Bank. Here's what brokerages said about these counters.
Brokerage firm Nirmal Bang has a ‘Buy’ rating on ITC stock with a target price of Rs 520 per share. According to the brokerage, ITC valuation is inexpensive and cigarette volume and cigarette EBIT growth have been robust. Other businesses have also started reporting strong profitability improvement in recent years, further aiding pace of earnings growth.
“ITC’s net profit growth does seem to have turned the corner after the struggles of the past. We view the value unlocking from the Hotel business demerger as a welcome move, especially if it is eventually followed by the demerger of the other FMCG and IT Services businesses as well. If the same fructifies, re-rating will be sharper going forward,” said Nirmal Bang in its report.
JM Financial Services has a ‘buy’ rating on Zomato stock with a target price of Rs 115 per share. Zomato's stock is likely to be volatile in the near term on account of market speculation around possible exits by some pre-IPO shareholders of the company as well as erstwhile shareholders of Blinkit who had received it under a share swap deal, the brokerage said.
According to analysts at JM Financial, a few cues from past actions of Zomato investors suggest that at least some of them would be eager to book profits post the recent run-up in the stock. So, a sizeable proportion of Zomato’s shares could be available for trade in the near term. "We strongly suggest that long-term investors use these liquidity events to build a sizable position in Zomato as it not only offers a strong play on India's online food services market but is also, post the Blinkit acquisition, shaping up into a formidable diversified play on online retail," they said.
Brokerage firm Geojit Financial Services has a ‘buy’ rating on CIE Automotive stock with a target price of Rs 576 per share. The brokerage believes that the current growth story in the domestic market and the focus on building the EV product portfolio and operation performance in the European business are likely to push the margin forward.
“We expect normal growth in the domestic car segment for the year due to a high base and fading pent-up demand. In addition, there is the possibility of a tightening in the international business in the near term. However, the long-term growth prospects are intact, and we expect a re-rating in valuation similar to listed MNCs in the automotive sector,” said Geojit Financial in its report.
Motilal Oswal has a ‘buy’ rating on AU Small Finance Bank stock with a target price of 825 per share. The brokerage noted that while near-term pressure margins will remain an overhang on the stock’s performance, earnings growth are estimated to accelerate.
“AU Small Finance Bank has evolved as a strong franchise not just in SFBs but in overall mid-cap banking space, and given strong investments in the business, improving geographical and product diversity and a track record of execution, we believe the stock will be a compounder in the long term,” said analysts at Motilal Oswal about the lender.
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