5 Quality Stocks To Purchase For Double-Digit Returns Within A Year



Stocks to Buy: Domestic brokerage and research business Angel One has shared its top five selections, advising investors to purchase or acquire these high-quality stocks over a year.


Five Stocks To Buy

Ashok Leyland

Accumulate Ashok Layland: CMP: Rs 143| Target: Rs 164


Multiple causes, such as revisions to axel requirements, price increases brought on by the implementation of BS 6 norms, and a steep decline in demand as a result of the ongoing Covid-19 crisis all hurt MHCV demand after it peaked. Despite obstacles, the CV segment has fared well this year, and improvements in business sentiment and infrastructure spending are projected to boost demand in the longer term. Due to an improvement in end-user activities, the bus segment is also anticipated to recover in the future. Production volumes in the MHCV sector in FY21 were at their lowest levels in 12 years. and we think the business is well-positioned to benefit from the CV segment's recent growth recovery.


"We expect that ALL will be the biggest benefactor of the Government's voluntary scrappage policy and so grade the company a BUY," the brokerage firm declared.


Federal Bank

Buy Federal Bank: CMP: Rs 98| Target: Rs 120


One of the biggest older-generation private sector banks in India is Federal Bank. The bank has deposits of Rs. 1.81 lakh crore and advances of Rs. 1.45 lakh crore at the end of Q4 FY2022. The bank's primarily secured lending book helped to limit difficulties with asset quality during the Covid 19 outbreak. As NII/advances rose by 7.4%/9.9% YoY in Q4FY22, Federal Bank reported a strong set of numbers. Provisioning

for the quarter was 10% lower year over year, which caused PAT to increase by 13.1%. The ratios of GNPA and NNPA increased to 2.80% and 0.960%, respectively, while restructuring was steady sequentially at 2.6% of advances. In line with our estimates, overall asset quality for the quarter improved in Q4FY22.


According to Angel One, given the economy's return to normalcy in FY2023, we anticipate asset quality to continuously improve. We remain optimistic about the Federal Bank and anticipate it to have an NII/PPOP/PAT CAGR of 24.9%/29.1%/42.7% between FY2022 and FY2024.

HDFC Bank

Buy HDFC Bank: CMP: Rs 1,392| Target: Rs 1,610

With a loan book of Rs. 13.68 lakh crore and a deposit base of Rs. 15.6 lakh crore in Q4FY2022, HDFC Bank is the largest private sector bank in India. The Bank's loan book is extremely evenly distributed, with retail making up 44% of the loan book and wholesale making up 57% of the asset book. Due to a shift in the portfolio mix toward corporate, which caused NIM to decrease by 10bps QoQ to 4%, Q4FY2022 results fell short of expectations. Additionally, increasing open impeded the expansion of PPOP. On the heels of loan growth of 20.8% YoY, the bank reported NII/PPOP growth of 10.2%/5.3% for the quarter. While operating results fell short of forecasts, the bank's asset quality improved as GNPA/NNPA decreased by 9/5bps QoQ to 1.17 percent and 0.32 percent of advances, respectively. At the end of the quarter, restructured advances made up 1.14 percent of total advances.


The statement read, "Given acceptable valuations at 2.3xFY24 adjusted book which is at a discount to historical averages we remain constructive on the bank given best-in-class asset quality and expected resurgence in retail loan growth."


Sobha Limited

Accumulate Sobha Limited: CMP: Rs 662|Target: Rs 750

The company engages in contracting work in addition to operating in residential and commercial real estate. Companies in Bangalore, one of India's IT centers, account for 64% of all residential pre-sales; as a result, we anticipate that additional hiring by the sector would boost demand for homes in South India. Inventory levels for items that are ready to transport and those that are still being built have dropped to their lowest points. Customers are now favoring branded competitors like Sobha Developers. The company anticipated new projects/phases distributed around 7.53 million square feet. Existing land banks will be the source of the majority of launches. The business owns a land bank with about 200 million square feet of saleable space.


Marico

Buy Marico: CMP: Rs 500| Target: Rs 600

One of the largest FMCG firms operating in the food, personal care, edible oil, and hair oil sectors is Marico. Major brands include Livon, Beardo, Saffola, Nihar, Hair & Care, and Parachute. In addition to having a wide distribution reach of more than 5 million outlets and a direct reach of 1 million outlets, Marico's products have a great brand recall.


According to the brokerage note, "We expect Marico to achieve a robust bottom-line CAGR of 11% over FY2022-24E due to higher volume growth on the back of a strong brand, large distribution network."


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