Stocks to Buy – State Bank of India (SBI), Dabur, Life Insurance Corporation of India, HDFC Life, Bandhan Bank, Piramal Enterprises (PEL), HDFC Bank, SBI Cards are among 8 convincing picks of Centrum Broking
State Bank of India (SBI), Dabur, Life Insurance Corporation of India, HDFC Life, Bandhan Bank, Piramal Enterprises (PEL), HDFC Bank, SBI Card are some of the most convincing options of Centrum Broking.
State Bank of India – Centrum’s recommended target price for SBI is ₹750.
Reasons to invest – After years of low credit growth, increasing write-offs and NPA provisions, SBI has now come out of its shadow and is showing growth. In Q2 and recent quarters, SBI had good growth and low NPAs. SBI’s valuation remains attractive compared to its private sector peers. SBI remains a strong player in India’s growth and financial inclusion story. Dabur – Centrum’s recommended guide price is ₹650-700
Investment Rationale – Dabur has a very strong brand portfolio capable of delivering outstanding growth in the industry. Dabur’s focus on capacity building, rural penetration and brand focus could lead to exceptional long-term growth.
Life Insurance Corporation of India – Suggested target price is ₹900
Investment Rationale – LIC is trading at a discount to its pegged value, which provides significant comfort in terms of value. As the quarterly results show, LIC remains the dominant player and despite its huge size, its market share continues to grow. Regulatory changes for PAR and non-PAR businesses are likely to significantly increase LIC’s profits over the long term. HDFC Life – Recommended indicative price is ₹750
Investment base – HDFC Life is one of the leading private life insurance companies in India and operates in an industry with huge potential and rapid growth. Over the past four years, HDFC Life has shown consistent improvement in operating parameters such as persistence ratio.
Bandhan Bank – Suggested target price is ₹270
Investment Rationale for Bandhan Bank – Bandhan Bank trades at 1.2 times FY25 price to book value. It is relatively cheaper compared to its error size. The bank is reducing its portfolio of investments in high-risk microfinance institutions and increasing its retail account portfolio. HDFC is looking to sell its 5% stake, which could lead to setbacks. But this stock is good to buy/accumulate in case the price drops.
Piramal Enterprises Ltd. (PEL) – Final price is ₹1250
The logical investment base for Piramal Enterprises according to Centrum is Piramal Enterprise.
Additionally, PEL trades at a very attractive valuation of 0.7 times its 2025 book price with a dividend yield of 3%. This makes Piramal Enterprises’ long-term investment very attractive.
HDFC Bank – Suggested target price for HDFC Bank is ₹1900
The reason to invest in HDFC Bank is that HDFC Bank is trading at an attractive valuation of 2.2 times the order price in FY25. HDFC Bank has an ROE of 17% and ROA of 2.1%. HDFC Bank has the best asset quality among major banks in India. HDFC Bank has a GNPA of 1.1% and net NPA of 0.3%. HDFC Bank is a pioneer in retail lending in India. The suggested price target of ₹1,900 for HDFC Bank implies a 21% upside from current levels.
SBI Card and Payment Services – Recommended Indicative Price is ₹900
The reason for investing in SBI Cards is that SBI Cards is India’s second largest card issuer in the country, with a market share of 19% of cards in circulation and 17% of total card spending. SBI card spend growth remains stable, positive traction in new card additions, reversal in interest rate cycle and improvement in revolving credit mix are the key factors driving growth of future card leaders. SBI Card trades at 22 times FY25 earnings with an ROE of 25%.
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