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You are here : IndiaNotes >> Research & Analysis >> Companies >> Arvind Ltd. >> Research

SMC's top picks with an upside potential of 14% to 28%

SMC | 24 Aug, 2017  | Follow Author | Add to my Favourites 
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Avind

Valuation

The company enjoys a global leadership positions in textiles as well as Carries an unmatched domestic portfolio of apparel brands and retail formats. Lower investments in brands and repositioning of Unlimited, management of the company expects the operating margin to improve in near term. Company’s capability in manufacturing garments, coupled with its positioning of the most preferred franchisee/distribution partner in India, it is poised to benefit from an increase in demand for apparels, thus it is expected that the stock will see a price target of Rs.464 in 8 to 10 months time frame on three year average P/E of 22.50x

and FY18 (E) earnings of Rs.20.62.


Axis Bank

Valuation

The bank, is well positioned for future growth, is focusing on cross-selling to existing customers. This is a key driver for growth. In FY18, the management expects the Bank's Advances portfolio to grow around 5% faster than system growth. As has been the case in recent quarters, the Retail advances business is likely to continue to remain the key engine of growth in FY18. Thus, it is expected that the stock will see a price target of Rs.631 in 8 to 10 months time frame on a target P/BV of 2.7x and FY18 (E) BVPS of Rs.233.83.


Larsen & Toubro

Valuation

The Company continues to focus on profitable execution of the large Order Book, selective order picking, on-time deliveries & operational excellence through digitalization. The management is also emphasizing on cost competitiveness, continuous optimization of working capital, restructuring of its business portfolio and value creation with an aim to enhance its Return on Equity. Implementation of GST is expected to have far reaching effects by bringing large parts of the informal economy into the formal system where compliance and accountability standards are of a higher order. Thus, it is expected that the stock will see a price target of Rs.1377 in 8 to 10 months time frame on a 2 year average P/Ex of 19.36x and FY18 EPS of Rs.71.11.


Bharat Electonics

Valuation

With the robust order backlog, along with a better execution environment provides healthy revenue visibility for the coming years. Government’s greater emphasis on ‘Make in India’ initiative in Defence sector provides a great opportunity for the Company to enhance its indigenisation efforts and to address the opportunities in Indian Defence sector. Thus, it is expected that the stock will see a price target of Rs.213 in 8 to 10 months time frame on a

target P/E of 29x and FY18 (E) EPS of Rs.7.36.


ICICI Prudential Life Insurane

Valuation

According to the management focusing on improving protection business, persistency and costs, the company would get good growth in coming years. The key strategy of the company has been to grow the Value of New Business through growing the protection business, while the company achieved its strategic goals for FY2017. The company is well capitalized for growth opportunities. The solvency ratio was at healthy level of 288.6% end June 2017, which is much above the regulatory requirement of 150%. Thus, it is expected that the stock will see a price target of Rs.481 in 8 to 10 months time frame on a one year average P/Bvx of 9.38x and FY18 BVPS of Rs.51.29.


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About SMC
SMC Research, founded in 1990, is India’s leading share and stock broker, provides a wide range of financial services and investment solutions. A blend of extensive experience, diverse talent and client focus has made us the 4th largest broking house in India(Source: Dun and Bradstreet, 2008). Over the years, SMC has expanded its operations domestically as well as internationally. Existing network includes regional offices at Mumbai, Kolkata, Chennai, Cochin, Ahmedabad, Jaipur, Hyderabad, Bangalore plus a growing network of 2100+ offices spread across 425 cities/towns in India.


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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.



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