Monthly Stock Recommendation – January 2023

will  *We are continuing with ITC, Maruti Suzuki, Piramal Pharma, SBI and Tata Steel from last month’s stock picks.

*Consider the prices as on 3^rd  January 2023 at 10 am.

Note: Full Report will be published on 03-01-2023 on our website https://elitewealth.in/

Bajaj Finserv Ltd.:

Bajaj Finserv Limited (BFL) is the holding company of the various financial services businesses under the Bajaj group. It is currently engaged in the lending and protection & savings through offering different financial products and services to millions of customers in India. The company offers life and general insurance and lending solutions through its subsidiaries namely Bajaj Allianz General Insurance Limited, Bajaj Allianz Life Insurance Limited, Bajaj Finserv Direct Limited, Bajaj Finserv Health Limited and Bajaj Finance Limited. Company’s total consolidated revenue increased by 16% in Q2FY23 to Rs.20,434 cr. compared to Rs.17,657 cr. in Q1FY23 and PAT increased hugely by 39% to Rs.1557 cr. from previous quarter Rs.1122 cr.  New business grew by 40% YoY and APE grew by 29% YoY in the same quarter. BFL remains stand out with strong balance sheet; all subsidiaries of the company are well placed to capture long-term growth opportunities.

DLF Ltd:

 

DLF Limited (DLF) is India’s largest real estate company in terms of revenues, earnings, market capitalisation and developable area. The operations of the company cover all aspects of real estate development, from the identification and acquisition of land, to planning, execution, construction and marketing of projects. Company has the track record of over 75 years and has developed more than 150 projects. The company has well diversified product mix across geographies and segments; low-rise development projects is leading to faster cash generation for the company. Its core residential business is showing strength, new sale bookings of the company grew significantly by 63% at Rs.4092 cr. in H1FY23 compare to the previous year Rs.2526 cr. DLF is going to launch Rs.3500 cr. worth of new properties in the H2FY23 mainly in Gurugram and Panchkula to cater the rising demand in the sector.

ICICI Lombard Ltd:

ICICI Lombard General Insurance Company Ltd. (ILGI) is 4^th largest general insurance companies in Asia and 14^th largest globally in 2021. The company is leading private sector non-life insurer in India with 8.1% market share as on 31^st March, 2022. It offers a well-diversified range of products which includes Motor, Health, Fire, Marine, Crop & other insurance products. The company’s key distribution channels are direct sales, individual sales, corporate agents, brokers and digital channel. ILGI’s gross direct premium increased by 18% YoY in Q2FY23 due to the growing commercial lines and group health. Company has shown strong sequential growth over the years and is further expanding its distribution network to increase the market share in tier-3 and tier-4 cities.

ITC Ltd:

ITC Ltd. is one of India’s foremost multi-business enterprise with diversified portfolio of businesses spanning in FMCG, Paperboards & Packaging, Agri Business, Hotels and Information Technology. It has been the top player in the cigarettes market and one of the leading FMCG brand in India. The company delivered robust performance across all segments in the September 2022 quarter. Revenue of the company increased 25% to Rs 16,930 crore in the Q2FY23 and Net profit also rose to 24.4% (YoY) to Rs 4,620 crore in the quarter ended September, 2022. The company’s cigarette business grew by 23.3% to Rs 6954 crore during the quarter, while FMCG-others business, which includes packaged food and personal care products, grew 21% to Rs 4,885 crore; the segment’s EBITDA Sustained at 9.5%. ITC reported a healthy performance across segments. The Cigarettes business is gaining market share and is going to maintain volumes because of stable tax policies. Also foreign portfolio investors have been increasing their positions in ITC for the last four consequent quarters.

Maruti Suzuki Ltd:

Maruti Suzuki India Ltd. is a subsidiary of Suzuki Motor Corporation, Japan. It is India’s top automobile manufacturer in the country with market share of 42% in the passenger car market. The principal activities of the Company are manufacturing, purchase and sale of motor vehicles, components and spare parts. The other activities of the Company comprise facilitation of pre-owned car sales, fleet management and car financing. The company delivered significant financial performance in the September quarter due to ease in semiconductor shortages and decline in commodity prices. Total revenue of the company rose to 28,546 crore up 48% YoY and Net profit also increase hugely by 334% to 2,113 crore for Q2FY23. In November 2022, total sales of the company increased by 14% yearly but exports declined by 7.7% YoY due to world economy slowdown. Maruti’s plan to launch more vehicles in the CNG variant and focus on the SUVs would further drive the growth in the coming period.

Piramal Pharma Ltd:

Piramal Pharma Ltd. (PPL) is a pharmaceuticals company of the well-known Piramal Group. The Company manufactures and develops a wide range of pharmaceutical solutions through end-to-end manufacturing capabilities across 15 global facilities and a global distribution network in over 100 countries. Business segments of the company includes Contract Development and Manufacturing Organization (CDMO), Complex hospitals generics, India Consumer healthcare and Ophthalmology. Some of the brands of the company in consumer healthcare includes Saridon, Lacto Calamine, Polycrol and Tetmosol. The company showed the Revenue of Rs.1720 Cr., up 9% in September quarter of FY23. Post covid the demand of their CDMO Services has gone up globally due to the China plus one strategy. In the complex hospitals generics segment, PPL gets advantage of less competitors from other Indian Pharma players. Management of the company remains positive for its future performance and expects 20% EBITDA margin in the next 3-5 years.

Reliance Industries Ltd.:

Reliance Industries Limited (RIL) is India’s largest private sector conglomerate with diversified businesses including energy, petrochemicals, natural gas, telecommunication and retail. The company has evolved from the textile and polyester company to an integrated player across energy, metals, petrochemical, retail, telecommunication and entertainment. It majorly operates through following segments: Oil to Chemicals (O2C), Oil & Gas, Retail, Digital Services, Financial Services, and Others. Reliance Jio business is sequentially growing its market share and is at 36.85% in October 22 Vs 36.66% in September. The rollout of 5G services would accelerate the ARPU for the telecommunication business. The retail segment is strengthening; acquisition of several FMCG players by the company will help to gain the market share. Recent windfall tax cut by the centre from Rs.4900 per tonne to Rs.1700 per tonne would help to maintain the bottom line; Oil & gas production would improve further as the company would commission new gas condensed field soon.

Schaeffler India Ltd:

Schaeffler India Limited is one of India’s leading ball and rolling bearing manufacturer for the automotive and industrial segments. It is engaged in the development, manufacturing and distribution of high-precision roller and ball bearings, engine systems and transmission components, chassis applications, clutch systems and related machine building manufacturing activities. The company is showing continuous strong performance despite a challenging market environment. The company has won significant orders in industrial and automotive segment. Capex of the company remains intact at 4.8% of sales in Q2FY22. Improving rural demand is giving positive support to the company’s growth.

State Bank of India Ltd:

State Bank of India Ltd. is India’s largest public sector bank operating from the last 40+ years with an extensive network of more than 21,000 branches, 55,000 ATMs in India and 232 international offices across 32 countries. It is a banking and financial services statutory body engaged in providing a wide range of products and services to individuals, commercial enterprises, large corporates, public bodies, and institutional customers. SBI has shown robust performance in the September quarter results. Consolidated revenue of the bank rose 15.7% YoY to Rs.84,463 Cr crore compared to 73,029 crore in the previous year same quarter while Net Profit of the bank increased hugely by 66% YoY at  Rs.14,752 Cr. Asset quality of the bank has improved in Q2FY23 with GNPA ratio of 3.52% down by 39 bps QoQ and Net NPA of 0.8% compared to 1% in June quarter. Healthy loan growth momentum of the bank is expected to sustain led by retail and corporate loan growth.

Tata Steel Ltd.:

Tata Steel Ltd. is one of the world’s largest steel companies with a global annual crude steel production capacity of 34 million tonnes per annum (MnTPA). The company has manufacturing units in 26 countries across globe and has presence in 50 countries. It has a strong portfolio of 11 retail brands. Tata Steel didn’t show good numbers in the September quarter due to moderate realization and high energy prices especially in Europe. However, recent decrease in coking coal prices and rise in infrastructure activity would continue to drive the demand in India. Company had recently announced the merger with 7 of its group companies which will benefit the company in increased operational efficiency, better facility utilization, working capital efficiency, better cash flow management, Scalability and Enhanced logistics over the long term.

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