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Domestic brokerage and research firm HDFC Securities has recommended top two stock picks which are PSU lender Canara Bank and building material company Prince Pipes & Fittings Limited as ‘Buy’ ratings with the time frame of over the next two quarters. 

HDFC Securities' top stock picks -

Canara Bank: The earnings profile of Canara Bank was severely impacted over the last few years primarily because of high credit costs, though, the same has seen an improvement in since FY21, the brokerage said. For the overall industry, with the arrival of the festive season, the credit growth is likely to improve in coming months, driven by retail and agriculture while industry and services continue to be slow. It expects healthy recoveries and upgrades in next two years.

“We feel investors can buy Canara bank at LTP of 193.6 and add more at Rs.169 for the base case fair value of 216.5 and for the bull case fair value of 228.5 over the next two quarters," HDFC Securities note stated.

Prince Pipes and Fittings: Prince Pipes and Fittings (PPFL) is India's 6th largest plastic pipe manufacturer with a strong track record of industry leading volume growth, as per the brokerage.

It expects PPFL to benefit from consolidation in the plastic piping industry on back of it’s robust balance sheet, tighter working capital norms (receivable days has come down from 86 in FY16 to 40 in FY20 and 62 in FY21, vast pan India distribution and manufacturing network and diversified product portfolio.

“We feel investors can buy the stock in the band of 740-750 and further add on dips at Rs. 663 for a base case fair value of Rs. 825 and bull case fair value of 885 for a time horizon of 2 quarters," HDFC Securities added.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.


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