Shares to buy today: Here are the top stocks that you can think of buying, say experts
Indian equity experts have bet high on Intellect Design Arena, Shriram Transport Finance, City Union Bank, Persistent Systems share as fundamentals of these stocks are looking strong.
On account of volatility into the market in last two trading session at the Indian indices, market investors are in a limbo over their next plan. Experts are of the opinion that volatility to pick up on the back of F&O expiry and upcoming interim budget. However, they suggested that a stock fundamental should be one of the strong criteria while selecting your investment option.
Therefore, on the basis of expert opinion, here are the stoks that an investor can think of while deciding his investment option:
Shriram Transport Finance
After a stellar 2Q, SHTF’s 3Q was expectedly disappointing. AUM growth ground to a halt ( around 15 per cent YoY, flat QoQ) and disbursals plunged (down 29/31 per cent), as used vehicle disbursals dipped around 18/22 per cent. SHTF securitised/ assigned around Rs 54bn in 3Q. NIMs compressed to around 7.44 per cent as the rise in CoF (+11bps QoQ) outpaced the growth in yields (+6bps). Asset quality was stable as Gross Stage III was flat QoQ at around Rs 90.3bn.
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Speaking on the outlook of this stock Darpin Shah, Analyst at HDFC Securities told, "Our conservative estimates for AUM growth (15.5 per cent) and provisions (around 2.6 per cent) over FY19-21E provide upside risk to our estimates. At CMP, the stock trades below long term average at 1.58x FY20E ABV." He sugested to maintain buy with a target price of Rs 1,486 (2.0x Dec-20 ABV of Rs 741).
Intellect Design Arena
Intellect Design Arena (INDA) posted muted quarter both on the revenue and margin front. Revenue stood at USD 52.4mn (against our estimates of $53.7mn), down 3.4 per cent QoQ and 2.8 per cent CC. Revenue fall was led by lower licence revenue (-25 per cent QoQ, higher base effect). Order backlog remains healthy at Rs 13.88bn (+11 per cent QoQ), which provides growth visibility. Management has guided for around 25 per cent YoY growth for FY19E which implies strong 4Q exit (+13.5 per cent QoQ). EBITDA margin expanded 26bps QoQ to 10.3 per cent, stood lower than our est. of 11.7 per cent due to 130bps QoQ drop in GM.
On what should be the suggestion for investors regarding this stock, Amit Chandra, Analyst at HDFC Securities told, "We recommend investors to buy the stock for the target of Rs 300 per share." The share is hovering around Rs 194 levels.
City Union Bank
CUBK is well positioned to expand its credit book at a CAGR of 17 per cent over FY18-21E with above-industry average margin. On the capital front, CAR of 14.8 per cent goes in favor of the bank. With the slippages likely to drift lower, credit cost may subside. Hence, we believe the bank is well poised to post an average ROA of 1.67 per cent over FY18-21E vs an average of 1.53 per cent over FY15-18.
Speaking on the outlook of the stock Chintan Shah, Analyst at Elara Securities told, "We maintain our Buy with a new TP of Rs 257 from Rs 212 on 3.0x (from 2.7x) FY20E P/ABV, thereby implying 35 per cent upside from current levels."
Persistent (PSYS) posted in-line revenue and an operational beat in 3Q. While the revenue growth was muted (despite seasonality tailwind), operational improvement seems sustainable supported by (1) Higher offshoring (in large accounts), (2) Better mix (higher Salesforce, Appian channel contribution) and (3) Utilisation increase.
Speaking on the outlook of the stock in short-term perspective Apurva Prasad, Analyst at HDFC Securities told, "This IT stock looks strong in short-term perspective and we recommend investors to buy the stock for the target of Rs 815." The stock is oscillating around Rs 565 levels.
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