Stocks to buy: M&M, Cipla, Ambuja Cements, Tata Consumer Products, among 14 stock picks by SBI Securities

The Indian stock market is at a record high level with both the benchmark indices, Sensex and Nifty 50, scaling new peaks. The market sentiment has been bullish on the back of strong domestic macros and rising optimism over central banks easing monetary policies and begin cutting interest rates this year soon.

The Sensex set its new all-time high of 74,245.17, while the Nifty 50 hit its fresh record high of 22,525.65 in intraday trade on March 7.

The benchmark Nifty 50 is trading at 1 year forward rolling P/E multiple of 17.5x which is mildly higher than its long-term average band of 15-17x. 

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“The premium valuation however is well supported by robust earnings growth, stable government policies, recovery in capex cycle and huge thrust on infrastructure development,” analysts at SBI Securities said.

Despite premium valuation, the Indian market is trading at a cheaper valuation as compared to developed markets like the USA and Japan. Nifty 50 and Sensex PE are, however, trading at a premium of 60% to the MSCI EM valuation. 

“We believe, India will continue to trade at a premium valuation due to stable economic and political environment, strong earnings growth of corporate, marked improvement in asset quality and healthy return ratios,” the analysts said.

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SBI Securities have 14 stocks as their top picks based on Q3FY24 results, which it believes to have upside potential in the range of 15% - 26%. The brokerage firm suggests buying these stocks for an investment horizon of 12 months.

Here are SBI Securities’ top picks:

1] Mahindra & Mahindra | TP: ₹2,318.8

2] Ambuja Cements | TP: ₹716.6

3] Cipla | TP: ₹1,757.6

4] Tata Consumer Products | TP: ₹1,380.4

5] JSW Infrastructure | TP: ₹320

6] Blue Star | TP: ₹1,523.2

7] Shyam Metalics & Energy | TP: ₹816

8] Jammu and Kashmir Bank | TP: ₹171.9

9] Manappuram Finance | TP: ₹223.4

10] V-Guard Industries | TP: ₹392.5

11] Karur Vysya Bank | TP: ₹221.7

12] Privi Speciality Chemicals | TP: ₹1,410

13] Garware Hi-Tech Films | TP: ₹2,221.7

14] Windlas Biotech | TP: ₹692.9

SBI Securities’ stock selection philosophy remains focused on stocks having strong management backed by solid corporate governance, supportive industry outlook along with strong business growth visibility, attractive margins, return ratios and, healthy balance sheet and strong historical track record, it said.

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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.2