The BSE Sensex traded down 259.29 points to 60,347.27 in early trading on Tuesday amid a sell-off in stocks. He opened 174 points at 60,786.07 but soon after pared his gains and fell into negative territory at 60,347.27 points. The NSE Nifty also fell about 57 notches to 17,995.95 points. Here are some of the stocks investors should watch out for, according to brokerage Angel One:
Ashok Leyland Ltd (ALL) is a leading player in the Indian CV industry with a 32% market share in the MHCV segment. The company is also very present in the fast-growing LCV segment. The company is well positioned to capture renewed growth in the CV segment and will be the biggest beneficiary of the government’s voluntary scrapping policy and will therefore price the stock as a buy.
The federal bank is one of India’s largest older generation private sector banks with total assets of Rs 1.9 lakh crore with deposits of Rs 1.56 lakh crore and a loan portfolio of Rs 1, 2 lakh crore in FY21. The PCR at the end of T3FY21 stood at around 67%, which is sufficient. The restructuring book is expected to be between Rs 1,500 and 1,600 crore, of which Rs 1,067 crore has already been restructured. This goes against earlier expectations of a total restructuring of Rs 3,000 to 3,500 crore.
Suprajit Engineering Ltd
It is the largest supplier of automotive cables to domestic OEMs, with a presence in both 2W and Passenger Vehicles (PV). SEL has outperformed India’s automotive industry in recent years (showing positive growth compared to low double-digit declines for the domestic 2W and PV industry in FY21). SEL is one of the main beneficiaries of the ramp-up of OEM production around the world and is well insulated from the threat of electric vehicles (develops new products). Its premium valuations are warranted, given its solid outlook and blue-chip earnings quality.
The Company is engaged in the manufacture and sale of home appliance and kitchen products such as pressure cookers, LPG cookers and non-stick cookware, etc., under the brand names of “Pigeon” and “Gilma”. In the pressure cooker and cookware segment, over the past two years, the company has outperformed Industry and its peers. Going forward, SKL is expected to experience healthy revenue and profit growth thanks to new product launches, a strong brand and an extensive distribution network.
UA Small Finance
It is one of the leading smaller financial banks with assets under management of around Rs 34,688 crore at the end of Q1FY22. AU SFB has a well diversified geographical presence in North, Central and West India. Given the stability of its asset quality, loan growth is expected to accelerate in Q2FY22, which should lead to a revaluation of the bank.
It is the largest private sector bank in India with an asset portfolio of Rs 11.3 lakh crore in FY21 and a deposit base of Rs 13.4 lakh crore. The bank has a well-distributed portfolio, with wholesale making up around 54% of the asset portfolio, while retail accounts for the remaining 46% of the loan portfolio. Given best-in-class asset quality and the expected rebound in growth from Q2FY22, it’s a good choice given reasonable valuations at 3.0xFY23 accounting adjusted, which is below historical averages. After the announcement of HDFC’s merger with HDFC Bank, its share increased by around 10%.
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