Stocks to Buy: Macquarie Bets on Tata Motors Among Large Cap Themes
CMP: Rs 470
Target price: Rs 567
Macquarie is bullish on the automaker given the cyclical recovery in the utility and passenger vehicle segment, which is also seeing strong traction with new launches and improving demand. Tata Motors subsidiary JLR is seeing improved volumes and visibility of margins, Macquarie said.
CMP: Rs 3,241.70
Target price: Rs 3,900
Recent price hikes and moderation in input costs, Macquarie said, suggest that the pressure on margins is transient for Asian Paints. Competitive intensity is not a concern and the gain in market share is likely to be sustained, Macquarie said.
Hindustan Oil Company
CMP: Rs 287.45
Target price: Rs 515
At 6.2 times the price of FY22 relative to earnings, HPCL is cheap, but what makes the investment case compelling is the story of bottom-up growth, Macquarie said. It reports profit growth of over 70%, driven by refining expansion over the past four years, commissioning of petchem capacity at Bhatinda and product line improvement, among other factors .
CMP: Rs 666.20
Target price: Rs 860.80
Macquarie continues to prefer Bharti Airtel pure-play to Jio for exposure to the digitization of India. He sees Bharti’s EBIT (profit before interest and tax) margin increase to around 30% by FY 23, from around 15% in FY 21.
CMP: Rs 1,472.90
Target price: Rs 2,005
HDFC Bank has by far the most diverse distribution franchise, which has enabled the lender to deliver 2-3 times the system’s loan growth despite a tough time, Macquarie said. The technology problems are temporary and the quality of the assets is top-notch, the brokerage said. The removal of the RBI’s embargo on new digital banking initiatives will be a catalyst for the future, Macquarie said.