Chemical, financial stocks among HDFC Securities' top 4 picks over next 2-3 quarters
1 min read 13 Sep 2022, 02:20 PM ISTHDFC Securities top stock picks are Ramakrishna Forgings, Rico Auto, Repco Home Finance and Chemcon Specialty Chemicals
PremiumDomestic brokerage and research firm HDFC Securities has suggested four stocks that investors can look to buy with a time horizon of over the next 2-3 quarters, that are from auto ancillaries, NBFC, and chemical sectors. The top stock picks are Ramakrishna Forgings, Rico Auto, Repco Home Finance and Chemcon Specialty Chemicals.
Ramakrishna Forgings: With focus on derisking in times when the CV cycle is on the upswing and new capacity coming on stream, the brokerage thinks RKFL is well placed to rise the structural improvement in the domestic forgings segment.
“We believe investors can buy the stock in the band of ₹201-205 and add on dips to ₹178-182 band for a base case fair value of ₹230 and bull case fair value of ₹247 over the next 2-3 quarters."
Rico Auto: Going forward the visibility of revenues for Rico has improved and it is expected to benefit out of this along with margin expansion. Despite the recent increase in its stock price, the valuations remain undemanding, the note stated.
“We believe investors can buy the stock in ₹55.5-57.5 band and add on dips to ₹50-51 band for a base case fair value of ₹62.5 and bull case fair value of ₹68.5 over the next 2-3 quarters," the brokerage recommended.
Repco Home Finance: “With competition from Banks in mortgage reducing due to pick-up in corporate loans, NBFCs like RHFL are likely to benefit from lower competitive intensity. The low current valuation provides a buffer for investors. We believe that investors can buy between ₹228-233 and add more at ₹198 for the base case fair value of ₹257 and for the bull case fair value of ₹278 over the next 2-3 quarters," it said.
Chemcon Specialty Chemicals: HDFC Securities estimates strong double digit revenue growth along with robust operating margin at around 32-33.5% in the next 2 years on the back of capacity expansion and strong demand.
“We feel investors can buy the stock in the band of ₹412-418 and add more on declines to ₹361 for base case target of ₹465 and bull case target of ₹503 over the next two quarters."
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
