Stock brokerages have come out with research reports on select stocks namely CESC, Nippon India Life Asset Management (NAM India), and Equitas Small Finance Bank. All these stocks have seen a 'buy' rating from the respective brokerages amid some near-term headwinds. Here's what brokerages said about these counters
Nuvama Institutional Equities has retained its 'buy' rating on CEST with a target price of Rs 80, mainly on a high dividend yield with no near-term growth triggers while the tariff hike upside is now diluted.
"West Bengal's amended regulations mandate a RoE of 15.5% for fresh capex from April 2023, though the existing equity base of March 2023 continues to earn 16.5% RoE-limited PAT impact, along with a 9% T&D loss threshold, impacts incentive earnings by Rs 100 crore. Assuming unchanged tariffs, the under-recoveries may now offset the incentive loss, implying limited impact on PAT," Nuvama said.
Considering strong opportunities across segments, healthy earnings growth, and margin expansion, Reliance Securities has a 'buy' rating on the stock with a target price of Rs 2,100. "We expect its EBITDA margin at 6-7% over FY22-FY25E," it said.
Reliance Securities believes BEML is well-placed to capitalize on the imminent opportunities in mining, defence, and railway & metro segments. "Looking ahead, we expect the company is likely to witness 10% CAGR in order inflows over FY22-FY25E, which would translate into revenue, EBITDA and PAT CAGR of 12%, 16% and 27%, respectively," it added.
Axis Securities has a 'buy' rating on Equitas Small Finance Bank with a target price of Rs 76 as it expects the private lender to report a good set of numbers in Q4 and margins are likely to remain healthy.
Axis sees asset quality likely to improve and the potential to deliver 2% RoA along with superior NIIs. "Strong fee income growth and marginally moderating Opex ratios on a QoQ basis should drive PPOP growth moving forward. PAT growth should be healthy aided by near-normalized credit costs," Axis said.
Nippon Life India AMC (NAM) has maintained its industry ranking at fourth position during the quarter. Its AUM remained flat sequentially and grew by 3.5% YoY, said Keynote Capitals, which has a buy rating on the stock with a revised target price of Rs 299.
"At the current valuations, the market is expecting NAM to lose market share or grow at a slower pace than the industry. Based on the enhancement in market share in the last few quarters and a massive improvement in scheme performance, we think NAM is at a pivot point. Going ahead, we expect NAM to grow at least in line with the industry," Keynote said.
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