Monthly Stock Recommendation – November , 2022

Company	Recommendation	Accu./Buy(Rs)	Target (Rs)	Upside (%)	Time Horizon
Dr. Reddy’s Laboratories	Buy	4556	4775	5%	1Month
ICICI Bank	Buy	903	1050	16%	1Month
Infosys	Buy	1550.70	1720	11%	1Month
ITC	Buy	352.50	383	9%	1Month
L&T Infotech	Buy	4860.70	5500	13%	1Month
Maruti Suzuki	Accumulate	9220-8900	9800	10%	1Month
Tata Chemicals	Buy	1135	1400	23%	1Month
TCS	Buy	3240	3800	17%	1Month
Reliance Industries	Buy	2545	2800	10%	1Month
Siemens	Buy	2906	3300	13.5%	1Month

Weightage of Investment (Rs.10 Lakh)
Company	Amount (Rs)	Weightage (%)
Dr. Reddy’s Laboratories	1,00,000	10%
ICICI Bank	1,00,000	10%
Infosys	80,000	8%
ITC	80,000	8%
L&T Infotech	80,000	8%
Maruti Suzuki	80,000	8%
Tata Chemicals	1,00,000	10%
TCS	1,00,000	10%
Reliance Industries	13,00,000	13%
Siemens	12,00,000	12%
Cash	30,000	3%
Total	10,00,000	100%

Dr. Reddy’s Laboraories Ltd.:

Dr. Reddy’s Laboratories Ltd. is engaged in Pharmaceutical Services and Active Ingredients, Global Generics and Proprietary Products. The company offers a portfolio of products and services, including Active Pharmaceutical Ingredients (“APIs”), Custom Pharmaceutical Services (“CPS”), generics, biosimilars and differentiated formulations. The company delivered better than street expected results for Q2FY23 because of 48% growth in US business and g-Revlimid drug launch. Total Revenue of the company increased 9.4% YoY to Rs 6,305.7 crore and Net profit grew by 12% YoY to Rs 1,114.2 crore in the September 2022 quarter. Operating profit margin for the Q2FY23 rose by 340 bps YoY to 31%. Company spent 7.7% out of total revenue on the Research and Development for the same quarter.

ICICI Bank Ltd:

ICICI Bank Ltd. is a publicly held banking company engaged in providing a wide range of banking and financial services including commercial banking and treasury operations. The bank delivered great performance in September quarter of FY23. On consolidated front, the bank has reported 31.4% YoY growth in the Net Profit to Rs 8,007 crore for the quarter ended September 2022, up from Rs 6,092 crore in the same quarter previous year. Net Interest Income increased 26.5% yearly to Rs 14,787 crore, while other income moved up 16.8% YoY to Rs 5,139 crore. The operating profit improved 23.6% to Rs 11,765 crore in the quarter ended September 2022. Net Interest Margin grew to 4.31% (QoQ) in Q2FY23 from 4.01% in Q1FY23. For the September quarter CASA ratio of the bank stood at 46.6% and Net NPA ratio declined to 0.61% from 0.70% at June 30, 2022.

Infosys Ltd:

Infosys Ltd. is engaged to provide consulting, technology, outsourcing and next-generation digital services, to enable clients to execute strategies for their digital transformation. Its key services include application development, product co-development and system implementation/system engineering. The company shown growth across verticals; Sequential currency growth stood at 4% and large deals remain strong at $2.7 billion in the September quarter, growth of 28% YoY. Net Profit of Infosys grew 12.3% QoQ and Ebit margin grew by 150 bps QoQ at 21.5% for the same quarter. The company has increased revenue guidance to 15-16% from 14-16% for FY23.              

ITC Ltd:

ITC Ltd. is one of India’s foremost multi-business enterprises. Its diversified portfolio of businesses is spanning in FMCG, Paperboards & Packaging, Agri Business, Hotels and Information Technology. It 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.

Larsen & Toubro Infotech Ltd:

Larsen & Toubro Infotech Ltd. offers extensive range of IT services like application development, maintenance and outsourcing, enterprise solutions, infrastructure management services, testing, digital solutions and platform-based solutions to the clients in diverse industries. It showed strong financial performance in September 2022 quarter. Total Revenue of the company increased 28.4% to Rs 4,837 crore in the September 2022 quarter, up from Rs 3,767 crore in the September 2021 quarter and Net profit also grew by 23.2% (YoY) to Rs 679.3 crore in the same quarter. EBIT Margin improved by 10bps in the September quarter; Total contract value for the period rose to US$ 80 million and company signed 4 new large deals.

Maruti Suzuki Ltd:

Maruti Suzuki India Ltd. is a subsidiary of Suzuki Motor Corporation, Japan. 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. New launch of Vitara and Brezza has received good response from the customers. Company’s plan to launch more vehicles in the CNG variant and focus on the SUVs would further drive the growth in the coming period.

Tata Chemicals Ltd:

 

Tata Chemicals Ltd. is one of the largest manufacturer of soda ash and sodium bicarbonate for diverse industries, such as glass, detergents, silicates, textiles, food, pharmaceuticals, animal feed, mining and chemical processing. The September quarter result of the company showed significant growth. It reported 40% increase in its consolidated net sales for the quarter ended September 2022 to Rs 4,239 crore compared to corresponding previous year period because of robust soda ash demand. Net profit of the company was up 184% to Rs 629 crore YoY; Specialty products sales grew 27% YoY for the same quarter.

Tata Consultancy Services Ltd.:

Tata Consultancy Services Ltd. is one of the leading IT Company in the world which provide IT services, consulting and business solutions and have been partnering with many of the world’s largest businesses in their transformation journeys. The Group offers a consulting-led, cognitive powered, integrated portfolio of IT, business and engineering services and solutions. The company delivered above estimates results in the September quarter. Revenue and Net profit of the company grew 18% and 8.4% yearly to Rs 55,309 crore and 10,431 crore respectively in the September quarter. EBIT margin increased by 94 basis points to 24%. It showed double digit growth in all segments, North-America business continues to be growth driver for the company. The Total Contract Value grew 6.6% YoY and stood at US$ 8.1 billion. TCS continue to make investments in research and innovation and remains with rich cash flow.

Reliance Industries Ltd:

Reliance Industries Ltd. is one of India’s largest multinational conglomerate company engaged in activities spanning across hydrocarbon exploration and production, Oil to chemicals, retail, digital services and financial services. It delivered strong financial performance across segments. Consolidated revenue of the company rose 37% YoY to Rs. 2,30,055 crore in the September 2022 quarter compared to 1,67,611 crore in the previous year same quarter. Retail segment continue to scale, segment revenue grew 43% YoY and total store count crossed 16,000 mark, Digital services revenue growth was at 21% YoY; showed strong data traffic growth. Oil to Chemicals business revenue increased by 33% YoY. Overall growth across segments looks promising.

Siemens Ltd.:

Siemens Ltd. is engaged to offer products, integrated solutions for industrial applications for manufacturing industries, drives for process industries, intelligent infrastructure and buildings, efficient and clean power generation from fossil fuels and oil & gas applications, transmission and distribution of electrical energy for passenger and freight transportation, including rail vehicles, rail automation and rail electrification. The company delivered strong performance despite challenging environment in Q1FY23. Total sales rose 50.5% to Rs 4,198 crore in the June 2022 quarter, up from Rs 2,789 crore in the June 2021 quarter. Its Net profit grew significantly by 112% YoY to Rs 300.7 crore in the quarter ended June, 2022. Siemens is aiming to target the SME segment, which will allow it to scale up, adopt new designs & components and stay competitive.

 

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