Fundamental picks: Motilal Oswal bullish on these 3 stocks

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Published: September 9, 2016 4:44:04 PM

Brokerage house Motilal Oswal Securities has a buy rating on UltraTech Cement, Zensar Technologies and Solar Industries post their Q1 results and new deals amid the current market scenario.

Fundamental picks: Motilal Oswal bullish on these 3 stocksBrokerage house Motilal Oswal Securities has a buy rating on UltraTech Cement, Zensar Technologies and Solar Industries post their Q1 results and new deals amid the current market scenario.

Brokerage house Motilal Oswal Securities has a buy rating on UltraTech Cement, Zensar Technologies and Solar Industries post their Q1 results and new deals amid the current market scenario. It believes all the three companies have strong future prospects in terms of revenue growth. We take a look at the reasons why the brokerage house is maintaining a ‘Buy’ rating for these stocks:

UltraTech Cement
Cement company of the Aditya Birla Group, UltraTech, posted a strong 29.17 per cent year-on-year increase in its net profit to Rs 780.11 crore for the three months ended June 2016 as compared to net profit of 603.72 crore in the year-ago period. Brokerage house Motilal Oswal Securities hosted company’s MD KK Maheshwari who sounded bullish on cement sector on expectations that government’s spending on infrastructure as well as an rural housing demand will increase. The brokerage house has maintained a ‘Buy’ rating on the stock with target price of Rs 4,675 as it feels that industry dynamics are turning in favour of the company with demand improvement, slowdown in capacity addition and high consolidation. All this along with strong utilisation levels may drive strong pricing improvement. The company is bullish on its expansion plan, which the brokerage house believes will see strong possibility for earnings upgrade led by higher-than-estimated pricing improvement, especially in north and west regions where it has significant presence. The share price of the company closed 3.40 per cent down at Rs 3971.70 on September 9.

Zensar Technologies
Share price of the software service company ended with gains of 3.71 per cent at Rs 1042.10 on Friday after the company bagged multi million digital transformation deal from Avis Fleet in South Africa. The brokerage house is bullish on the company as it feels execution has become fast-tracked post leadership change which helped the company see solution launches and focus on large-deals. It further added, “On account of ongoing restructuring, we expect revenue growth of 5 per cent in FY17. However, with the implementation of growth engines well in progress, we expect a revival in revenue growth to 12 per cent in FY18.” While maintaining a ‘Buy’ rating with a target price of Rs 1,300, the brokerage house predicts potential for growth acceleration and stock re-rating.

Solar Industries
Explosives manufacturing company posted 13.14 per cent increase in net profit for the June quarter at Rs 47.11 crore as compared to Rs 41.64 crore in the corresponding period last fiscal. The share price of the company on Friday ended 0.51 per cent down at Rs 640.90. Total income of the company stood at Rs 460.33 crore, registering a rise by 10.95 per cent in the quarter under review as compared to Rs 414.90 crore in the same period last fiscal. The brokerage house has a buy rating on the stock with target price of Rs 725 on the back of continued strong growth, ramp-up in mining / infrastructure activities in India, increasing penetration overseas and also an inflexion point in defence revenues.

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