Even as Indian share markets have not witnessed any major movement in the last one month on the back of a host of factors, BSE Sensex and Nifty 50 have recovered over 55 per cent each from March lows. With just two weeks to go for Diwali, many companies are anticipating strong sales. So far, most of the companies have reported decent earnings due to gradual economic recovery. Similarly, the Nifty Midcap index has surged 55 per cent since March and Nifty Smallcap has rallied 75 per cent from March lows.
Here are a few stocks on which analysts at Motilal Oswal Financial Services have given a ‘buy’ rating following strong earnings in the July-September quarter of the current fiscal.
1. Hero MotoCorp: The management is confident of a very good festive season, as Dhanteras and Diwali are stronger in the Hindi belt. Semi-urban/urban have also started to do well. The brokerage firm has pegged a target price of Rs 3,700 apiece, which is a 28 per cent upside from the previous close.
2. Maruti Suzuki: Based on good Navratri and Dussehra demand, Motilal Oswal Financial Services expects Diwali and Nov-Dec’20 period to be good. The automaker witnessed fast recovery on the back of pent-up demand, an increased preference for personal mobility, and its strength in entry- and mid-segment PV. The brokerage firm sees a 10 per cent upside in the stock price with a price target of Rs 7,850 apiece.
3. Larsen & Toubro Ltd: Despite the COVID-19 impact, L&T balance sheet improved due to Rs 14,000 crore proceeds from the electrical and automation (E&A) business. It will L&T shares to jump 19 per cent from the previous close to touch the price target of Rs 1,100 apiece. The brokerage firm expects L&T to emerge stronger in the post-COVID era and further consolidate its market share in the Indian Construction industry.
4. PI Industries: PI Industries reported a strong set of numbers in the July-September quarter, driven by 25 per cent on-year growth in Custom Synthesis and Manufacturing (CSM) and 33 per cent on-year growth in domestic business. Motilal Oswal has pegged a target price of Rs 2,611 apiece, a 21 per cent upside in the stock price. With the completion of Rs 2,000 QIP, the company is exploring inorganic acquisition opportunities in the Pharma space, which would drive long-term growth.
5. AU Small Finance Bank: A 22 per cent upside would be needed to take AU Small Finance Bank to Rs 950 apiece, predicted by Motilal Oswal Financial Services. The bank reported strong earnings, led by higher treasury gains (including Aavas stake sale) and steady NII growth as margins expanded 30bp to 5.1 per cent, sequentially.
(The stock recommendations in this story are by the respective research and brokerage firm. Financial Express Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)