Kotak Securities, in a bullish stance towards Samvat 2080, is favoring large-cap stocks for their attractive valuations. The firm’s optimism, reported on Monday, is rooted in the belief that Nifty valuations are well-balanced, considering moderate earnings growth and historical performance. In light of the recent market correction, the brokerage sees an opportunity to invest in quality stocks for the long term at attractive prices.
The carefully selected stocks that have caught Kotak Securities’ eye for the new Samvat include Reliance Industries, Canara Bank, Cipla, Cyient, Dalmia Bharat, GCPL, Macrotech Developers, and PCBL.
Reliance Industries is anticipated to undergo robust growth across key segments, driven by its focus on 5G modernization and an expected tariff hike, backed by a growing subscriber base. The company’s substantial reduction in net debt adds to its appeal.
Canara Bank is making significant strides with a healthy loan growth of 12%, accompanied by improvements in asset quality and a decrease in credit costs. These factors have contributed to an enhanced Return on Equity (RoE) and a competitive trading discount compared to other PSU banks.
Cipla impressed with a strong performance in Q3, and it is expected to maintain a robust 20% Earnings Per Share (EPS) Compound Annual Growth Rate (CAGR) from FY 2023 to 2026. Market attention is closely focused on a potential promoter stake sale, which is anticipated to boost EPS in financial year 2024-2026.
Cyient is looking forward to a continued demand surge in aerospace, sustainability, and the automotive sector, with a Year-on-Year (YoY) order intake growth of 40%. The firm also commits to distributing 50% of its net profit as dividends.
Dalmia Bharat is poised for strong growth, driven by both organic and inorganic expansions between FY 2023 and 2026, accompanied by substantial price hikes in key markets, leading to margin expansion.
GCPL’s strategic turnaround initiatives are beginning to bear fruit, with a high-teen Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) growth projection for the current fiscal year. Nevertheless, the company acknowledges the need for additional measures to ensure sustainable growth.
Macrotech Developers, with its diversified geographical footprint and promising land development activities at Palava, is well-positioned to capture further market share.
Lastly, PCBL achieved record-breaking volumes during the September quarter, attributed to increased demand for specialty black carbon, and secured two patents for Oxidized grade carbon black and surface-modified carbon black.
