Stock Tips: Invest in these two stocks for bumper profits, government policies will increase profits amid accelerating digitization and coal crisis

Talking about individual stocks, investors have a chance to earn bumper profits in Infosys and Tata Power. (Image- Reuters)

Stock Tips: There is a great boom in the market. Today on October 18, Sensex has crossed 61700 and Nifty has crossed 18400 in intra-day. Talking about individual stocks, investors have a chance to earn bumper profits in Infosys and Tata Power. In the midst of increasing digitization near Infosys and the current coal crisis for Tata Power, there is a possibility of benefiting from the policies of the government. According to market experts, Infosys is seeing more growth potential than TCS, while Tata Power seems to be benefiting more due to the recent deal of Reliance.

Infosys

• Brokerage firm Motilal Oswal had estimated that the revenue of IT giant Infosys would grow by 5.7 per cent on a quarterly basis in July-September 2021, but its performance was much better than expected.
• Infosys’ revenue grew by 6.3 per cent in the September 2021 quarter on a quarterly basis. At the same time, it grew at the rate of 19.4 percent on an annual basis.
• Infosys’ EBIT and net profit (profit after deducting tax) grew 12-12 per cent year-on-year.
• Apart from big deals, the company’s management is confident that the company’s performance in medium and small deals will also remain excellent due to increasing demand.

Infosys Q2 Result: Infosys reports strong profit in the second quarter, up 12 per cent to Rs 5,421 crore

• The company’s growth is expected to be excellent in the next two quarters due to the focus on big deals and continued demand.
• The company will have a better performance in this half of the current financial year on the back of the deals won in the last financial year 2021 and its strong capacity.
• The brokerage firm believes that Infosys may get the benefit of digitization more than TCS.
• In the last financial year 2021 and the first half of the current financial year, Infosys overtook TCS.
• Brokerage firm Motilal Oswal has increased the EPS (earnings per share) estimates for this fiscal by 2 per cent, considering the company’s stellar performance in the second quarter. The stock is currently trading at 26x EPS estimated for FY2023. The brokerage firm has given it a buy rating and has fixed a target price of Rs 1960, assuming its valuation as 30x FY23e EPS.

Tata Power

• The central government has allowed power plants dependent on imported coal to sell electricity on exchanges for some time. According to brokerage firm Edelweiss, this is positive for Tata Power’s 4 GW Mundra power plant.
• Apart from this, the current deal of Reliance for Tata Power is also positive. Reliance has bought a 40 per cent stake in Sterling & Wilson (S&W) at 20-25x FY23e P/E, making the Tata Power business prospectus more promising and its valuations expected to rise by about 50 per cent.
  Due to rising coal prices, Tata Power’s cash profit from integrated operations could increase by 50 per cent to Rs 450 crore.
• Brokerage firm Edelweiss has fixed the target price of Tata Power at Rs 270 per share while retaining its buy rating.
  (The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)