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LIC Housing Finance to Equitas Holdings: Top shares to bet on
Edelweiss said while LIC Housing Finance (LICHF)’s performance has been volatile, strong parentage and comfortable liquidity lend it an edge over its peers.
The investors have witnessed a massive fluctuation in the share market in the last three trading sessions due to domestic and global factors. BSE Sensex fell from over 37500 level to below Rs 36,500 level in the last three trading sessions, wiping out crores of investors' wealth. Under such a situation, the investors should make informed decisions to minimise the loss. Here are the reports of brokerage Edelweiss on these three stocks:
LIC Housing Finance (BUY):
Edelweiss said while LIC Housing Finance (LICHF)’s performance has been volatile, strong parentage and comfortable liquidity lend it an edge over its peers. "We believe slackening competition and systemic risk aversion will benefit the company; however, asset quality risk and weak NIM in the current environment need to be monitored. We maintain ‘BUY/SP’."
Growth momentum was broadly in line with the estimate (AUM growth of 17%) with individual segment growth of 15 percent year-on-year (YoY). However, growth in developer's book remained higher at 4 percent quarter-on-quarter (QoQ) (despite stress). Lower NIM (down 19bps QoQ; impact of interest income reversal) trickled to revenue traction. While LICHF’s non-core home loan book continues to grow (23% plus), which is likely to support NIM, the current risk-on environment in real estate segment make us wary of this strategy.
Equitas Holdings (BUY):
Equitas has been reporting steady core performance (reflected in performance over past few quarters). The brokerage said it believed that the company's strategy and adequate capital will help rein in execution risks related to its operational ramp-up. That said, there are near-term uncertainties with respect to evolving business structure (listing of bank) and requisite regulatory approvals. We maintain ‘BUY/SO’.
eClerx Services (BUY)
While eClerx Services (eClerx)'s revenue growth remains a challenge, margin may have to find a new normal owing to structural changes in the revenue mix, the brokerage said. "The stock trades at historically low valuation and has INR166/share in cash, rendering risk–reward favourable. We maintain ‘BUY’ with revised TP of INR747 (INR1,259 earlier), 12x Q3FY21E EPS."
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