PICK OF THE WEEK (Sep 27)

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Recommendation by Centrum Broking

Liquidity crunch makes risk-reward unfavorable; Maintain Sell

PICK OF THE WEEK.SpiceJet was in urgent need of capital infusion even prior to Covid and the present crisis has only accentuated the liquidity crunch. SpiceJet continues to aggressively cut costs, re-negotiate contract terms, and defer payments. However, there are material uncertainties on its ability to continue deferring its obligations and unwind them in the absence of any external funding support or any relief from the government. This makes the risk-reward unfavorable. We maintain our Sell rating on the stock with a revised TP of Rs46 (based on 7x FY22E EBITDAR).

Britannia Industries – Buy
Recommendation by Emkay Global Financial Services

After a 10% correction, BRIT offers an attractive entry opportunity, given strong growth and earnings outlook vs. peers. Channel checks point to strong growth momentum – ahead of peers – driven by increased at-home consumption and share gains.

BRIT continues to be our preferred pick benefiting from tailwinds and strong execution. Valuations at 40x FY22E EPS appear attractive given 20% earnings CAGR over FY20-23E. Reiterate Buy with a TP of Rs4,500.

Cyient Limited-Accumulate
Recommendations by Geojit Financial Services

In Q1FY21, consolidated revenue reported a de-growth of 8.9% annualized, largely driven by weakness in the Aerospace and Defence vertical.

We expect growth in FY22E due to communication and transportation vertical and value Cyient at 12.5x FY22E EPS (Close to last 5-year average P/E) with a revised upward target price of Rs.460 and maintain
Accumulate rating.

Metropolis Healthcare-Buy
Recommendation by Angel Broking

We are positive on the company given expected long term growth rates of ~15% CAGR. Stable margins profile and moderating competitive intensity.

Cholamandalam Inv & Fin Comp-Buy
Recommendation by Angel Broking

The Cholaman.Inv.&Fn has a diversified product mix which helps them to capture growth in the tractor and 2 W segment. Adequate capital adequacy (20%+) and declined trend in Cost of the fund and strong parentage provide comfort.

Swaraj Engines-Buy
Recommendation by Angel Broking

Swaraj Engines is engaged in the business of manufacturing diesel engines and hi-tech engine components. Diesel Engines are specifically designed for tractor applications. Going forward, we expect a recovery in the tractor industry (due to robust Rabi crop production, hike in MSP & the forecast of a normal monsoon) will benefit players like Swaraj Engines.

IDFC First Bank-Buy
Recommendation by Angel Broking

We believe efforts to built a liability franchise, fresh capital infusion, and provision took on the wholesale books will help to tide over this difficult time. The IDFC First Bank is trading ( 0.7 x FY22ABV) at a significant discount to historical average valuations.

LIC Housing Finance (LICHF)-Buy
Recommendations by Geojit Financial Services

LIC Housing Finance (LICHF) is one of the largest housing finance companies in India. It provides long-term finance to individuals, professionals, and builders of residential flats and houses. The expectation of the economy to improve post lockdown, strong fundamentals and new products will boost performance in the near future. Hence, we reiterate our BUY rating on the stock with a revised target price of Rs. 353 based on 0.8x FY22E BVPS.

Hawkins Cooker-Accumulate
Recommendation by Angel Broking

Gaining market share with a peer, strong demand posts Covid-19, and an increase in penetration of cooking gas to drive higher growth.

VIP Industries-Buy
Recommendation by Angel Broking

Market leader (~50%+ share) with a strong brand and wide distribution network. Recent correction provides investment opportunity in high-quality stock from a long term perspective.

(Disclaimer: Views and recommendations given are those of brokerages and analysts and do not represent those of IANS. Users should check with certified experts before taking any investment decision. IANS has no financial liability whatsoever to any user on account of the use of information provided.)

–IANS

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