The earnings season for the second quarter of FY 2021 has been mixed so far. However, it is clearly visible that many companies have been successful in recovering from the pressure of lockdown. During this time, many companies have expressed better hopes for their performance. After the performance of quarterly results, shares of some such companies have become the choice of brokerage houses, whose fundamentals are looking strong. If you are looking for some better stocks, then we have selected 4 stocks here, in which brokerage has advised investing. Among them are HDFC Life Insurance Company, Bajaj Auto, ACC and Federal Bank. These shares can give up to 26 per cent further.
HDFC Life Insurance Company
In HDFC Life Insurance Company, KR Chaukse, a brokerage house, has suggested investment with a target of Rs 704. Total gross retention premium (GWP) of the company has increased by 34.8 per cent on an annual basis and about 74 per cent on a quarterly basis. The company has benefited due to strong new business and healthy renewal.
Market share of HDFC Life Insurance
It has increased from 15 per cent to 18 per cent in the first half of FY 2021. The company’s market share is 27.4 percent in private players. The net worth of the company has increased by 23 percent on an annual basis to 7,790 crore. Embedded value has also increased by 16 per cent to 23,330 crore. In terms of current price of Rs 562, the stock can get about 26 percent return.
Brokerage house ICICI Direct has suggested an investment in auto maker company Bajaj Auto with a target of Rs 3570. In the second quarter, the company got 6 percent growth in the two wheeler segment on an annual basis. During this time, the company has sold 5,50,195 two wheelers in the domestic market. Operating margin has increased from 16.6 per cent to 17.7 per cent on an annual basis. The company had surplus cash till the end of the September quarter. Bajaj Auto has made a profit of 1138 crores in the second quarter. There has been a 7 percent decrease in revenue. After the lockdown, now business is slowly returning to normal. In terms of current price of Rs 309, it can get 16 percent return.
Brokerage house KR Chouksey has advised investing in ACC with a target of Rs 1815. The current price of the share is Rs 1629. In this context, the stock can get 11 percent return. ACC’s revenue grew 36 per cent sequentially to Rs 3,537 crore in the September quarter. There has been volume growth in both cement and RMX segments. EBITDA grew by 20.5 per cent year-on-year and 27.8 per cent quarter-on-quarter in the September quarter. EBITDA margin has improved by 19.4 per cent. Although other income has decreased.
Brokerage house Motilal Oswal and ICICI Securities have advised to invest in Federal Bank with a target of Rs 70. At the same time, SPA Securities has set a target of Rs 124. In the September quarter, there has been strong operating performance in Federal Bank due to healthy net interest income. There is a recovery in core fees, while there has also been an improvement in provisioning coverage. However, due to Covid 19, higher provisioning has affected the bank’s profitability. There is also an improvement in loan collection efficiency. If you look at the current price of Rs 56, you can get 25 percent return in it.
(Note: We have given the lacquer here based on the performance of the company and the report of the brokerage house. Seeing the risk of the market, consult the experts at your level before investing.)