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Business News/ Photos / SBI, TCS, JSW Energy and more: SMC Global lists top 10 stock picks for 2024

SBI, TCS, JSW Energy and more: SMC Global lists top 10 stock picks for 2024

10 Photos . Updated: 27 Dec 2023, 03:31 PM IST Pranati Deva

The Indian market has had a splendid run in 2023 with the Nifty crossing the 21,000 level and the Sensex surpassing the 71,000 mark. Next year as well, experts see a double-digit return in the benchmark indices. Brokerage house SMC Global has come out with its top 10 picks for 2024.

TCS: The brokerage has a ‘buy’ call on the IT major with a target price of <span class='webrupee'>₹</span>4,308, implying a 14% upside. The company offers a comprehensive portfolio of generative AI services and solutions which indicates future growth visibility. The addition of new partners and robust order book and a good pipeline represent sustained business growth. In Q2FY2024, the margin of the company has improved due to cost efficiency, said the brokerage. (Bloomberg)

1/10TCS: The brokerage has a ‘buy’ call on the IT major with a target price of ₹4,308, implying a 14% upside. The company offers a comprehensive portfolio of generative AI services and solutions which indicates future growth visibility. The addition of new partners and robust order book and a good pipeline represent sustained business growth. In Q2FY2024, the margin of the company has improved due to cost efficiency, said the brokerage. (Bloomberg)

State Bank of India: The brokerage has a ‘buy’ call on India's largest lender with a target price of <span class='webrupee'>₹</span>791, implying a 23% upside. It noted that the bank has exhibited healthy performance on various parameters with some parameters way better than industry performance and some in line with the industry performance. The strong underwriting practices have led to significant improvement in the asset quality of the bank. The management of the bank plans to double its home loan portfolio in the next five years. To achieve its target of doubling the home loan book, the bank is strengthening its underwriting capability to improve delivery, stated SMC. (REUTERS)

2/10State Bank of India: The brokerage has a ‘buy’ call on India's largest lender with a target price of ₹791, implying a 23% upside. It noted that the bank has exhibited healthy performance on various parameters with some parameters way better than industry performance and some in line with the industry performance. The strong underwriting practices have led to significant improvement in the asset quality of the bank. The management of the bank plans to double its home loan portfolio in the next five years. To achieve its target of doubling the home loan book, the bank is strengthening its underwriting capability to improve delivery, stated SMC. (REUTERS)

HCL Technologies: The brokerage has a ‘buy’ call on the IT stock with a target price of <span class='webrupee'>₹</span>1,619, indicating a 14% upside. Based on the bookings and all the deals that it has signed, it expects very healthy growth in Q3 and Q4. For the entire year, it expects revenue to grow in the range of 4.5% to 5.5%. It expects operating margins for the full year to be around 18% to 19% on the back of some large deal wins and gaining shares on the cost optimisation-led deals, said the brokerage.

3/10HCL Technologies: The brokerage has a ‘buy’ call on the IT stock with a target price of ₹1,619, indicating a 14% upside. Based on the bookings and all the deals that it has signed, it expects very healthy growth in Q3 and Q4. For the entire year, it expects revenue to grow in the range of 4.5% to 5.5%. It expects operating margins for the full year to be around 18% to 19% on the back of some large deal wins and gaining shares on the cost optimisation-led deals, said the brokerage.

Maruti Suzuki: The brokerage has a ‘buy’ call on the auto major with a target price of <span class='webrupee'>₹</span>12,405, indicating an upside of 24%. The company is expected to maintain its leading market share in the PV industry in spite of fierce competition thanks to its strong brand appeal, robust product lineup, and capacity to release new models on a regular basis. Its revenue growth is also driven by the fact that it has the best distribution network and the highest penetration in rural areas within the PV market, explained the brokerage.

4/10Maruti Suzuki: The brokerage has a ‘buy’ call on the auto major with a target price of ₹12,405, indicating an upside of 24%. The company is expected to maintain its leading market share in the PV industry in spite of fierce competition thanks to its strong brand appeal, robust product lineup, and capacity to release new models on a regular basis. Its revenue growth is also driven by the fact that it has the best distribution network and the highest penetration in rural areas within the PV market, explained the brokerage.

Hindalco Industries: The brokerage has a ‘buy’ call on the metal major with a target price of <span class='webrupee'>₹</span>690, indicating an upside of 24%. According to the management of the company, it has maintained a strong balance sheet and robust cash flows with consolidated net debt to EBITDA ratio below 2 times. Moreover, domestic demand is strong, especially from pent-up demand from auto, aerospace and beverage cans. Stable macro conditions will support strong domestic demand. Demand from packaging both domestic as well as globally is immune to recessionary trends, it noted. 

5/10Hindalco Industries: The brokerage has a ‘buy’ call on the metal major with a target price of ₹690, indicating an upside of 24%. According to the management of the company, it has maintained a strong balance sheet and robust cash flows with consolidated net debt to EBITDA ratio below 2 times. Moreover, domestic demand is strong, especially from pent-up demand from auto, aerospace and beverage cans. Stable macro conditions will support strong domestic demand. Demand from packaging both domestic as well as globally is immune to recessionary trends, it noted. 

Havells India: The brokerage has a ‘buy’ call on the FMEG major with a target price of <span class='webrupee'>₹</span>1,668, indicating an upside of 24%. The company has a strong balance sheet and timely price hikes and a revival in Lloyd's margins would be key to earnings upside. Commodity price normalisation and product cost-led initiatives would drive further margin improvement. In the last few years, the company has expanded its presence in modern format retail, regional retailers and online which gives it a complete presence and helps in new product launches, it explained. 

6/10Havells India: The brokerage has a ‘buy’ call on the FMEG major with a target price of ₹1,668, indicating an upside of 24%. The company has a strong balance sheet and timely price hikes and a revival in Lloyd's margins would be key to earnings upside. Commodity price normalisation and product cost-led initiatives would drive further margin improvement. In the last few years, the company has expanded its presence in modern format retail, regional retailers and online which gives it a complete presence and helps in new product launches, it explained. 

JSW Energy: The brokerage has a ‘buy’ call on the power major with a target price of <span class='webrupee'>₹</span>473, indicating an upside of 13%. The management of the company has an ambitious target of reaching 20 GW of installed generation capacity and 40 GWh/5 GW of energy storage by 2030 along with 1 GW of solar module manufacturing by April 2025. This growth will result in balance sheet size to grow at 22% CAGR from FY 2023-30. These targets are in line with its mission to become carbon neutral by 2050. The company is well on track to achieve its capacity growth target of 10 GW much ahead of the stated timeline of FY 2025 and being future-ready with an increased share of renewables and new energy solutions, opined the brokerage.

7/10JSW Energy: The brokerage has a ‘buy’ call on the power major with a target price of ₹473, indicating an upside of 13%. The management of the company has an ambitious target of reaching 20 GW of installed generation capacity and 40 GWh/5 GW of energy storage by 2030 along with 1 GW of solar module manufacturing by April 2025. This growth will result in balance sheet size to grow at 22% CAGR from FY 2023-30. These targets are in line with its mission to become carbon neutral by 2050. The company is well on track to achieve its capacity growth target of 10 GW much ahead of the stated timeline of FY 2025 and being future-ready with an increased share of renewables and new energy solutions, opined the brokerage.

Indian Bank: The brokerage has a ‘buy’ call on the banking stock with a target price of <span class='webrupee'>₹</span>497, indicating an upside of 20%. The bank reported improvement in its asset qualities along with healthy growth in advances and deposits. Its focus on digital banking would continue to support the business growth going forward. It is strategically expanding the business and major thrust would be on retail, agriculture, and MSME sectors, targeting 10-12% credit growth in FY24, said the brokerage.

8/10Indian Bank: The brokerage has a ‘buy’ call on the banking stock with a target price of ₹497, indicating an upside of 20%. The bank reported improvement in its asset qualities along with healthy growth in advances and deposits. Its focus on digital banking would continue to support the business growth going forward. It is strategically expanding the business and major thrust would be on retail, agriculture, and MSME sectors, targeting 10-12% credit growth in FY24, said the brokerage.

Amara Raja Batteries: The brokerage has a ‘buy’ call on the auto ancillary stock with a target price of <span class='webrupee'>₹</span>904, indicating an upside of 19%. According to the management of the company, the demand signals are positive across all product segments and it will continue to focus on cost optimisation and work towards improving the operating margins. Moreover, it is expected to register healthy revenue growth, supported by steady growth in automotive and telecom segments, as well as strong traction witnessed in the new energy business with increasing demand for EV chargers and battery packs, explained SMC.

9/10Amara Raja Batteries: The brokerage has a ‘buy’ call on the auto ancillary stock with a target price of ₹904, indicating an upside of 19%. According to the management of the company, the demand signals are positive across all product segments and it will continue to focus on cost optimisation and work towards improving the operating margins. Moreover, it is expected to register healthy revenue growth, supported by steady growth in automotive and telecom segments, as well as strong traction witnessed in the new energy business with increasing demand for EV chargers and battery packs, explained SMC.

Kalpataru Power Projects: The brokerage has a ‘buy’ call on the power stock with a target price of <span class='webrupee'>₹</span>761, indicating an upside of 21%. According to the management of the company, the company continues to drive growth and create differentiation by strengthening capabilities organically and through strategic business development in newer areas like data centers, airports, heavy civil, design-build B&F projects, industrial projects, and manufacturing expansion. It has established a strong diversified order book, expanded global reach and robust execution capabilities, which makes it well poised to deliver profitable growth while maintaining a strong balance sheet, noted SMC. 

10/10Kalpataru Power Projects: The brokerage has a ‘buy’ call on the power stock with a target price of ₹761, indicating an upside of 21%. According to the management of the company, the company continues to drive growth and create differentiation by strengthening capabilities organically and through strategic business development in newer areas like data centers, airports, heavy civil, design-build B&F projects, industrial projects, and manufacturing expansion. It has established a strong diversified order book, expanded global reach and robust execution capabilities, which makes it well poised to deliver profitable growth while maintaining a strong balance sheet, noted SMC. 

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