BSE Sensex and Nifty 50 have corrected over 4 per cent from the record highs hit in February this year, driven by Union Budget optimism and foreign portfolio flows. So far this fiscal, the 30-share Sensex and NSE’s Nifty have rallied nearly 80 per cent. Domestic research and brokerage firm ICICI direct Research has recommended to ‘buy’ at least three stocks for 12 months, and sees up to 35 per cent rally. These stocks are SBI Cards, CAMS, and Gateway Distriparks. The brokerage firm favours SBI Cards due to its strong business model with higher return ratios and favourable digital and consumption trends. While, it has recommended CAMS as it provides a comprehensive portfolio of technology-based services, such as execution, payment, settlement, commission computation and compliance-related services. However, it believes that the likely commissioning of Dedicated Freight Corridor (DFC) will position Gateway Distriparks’ CTO business in a sweet spot.
SBI Cards and Payment Services Ltd: ICICI direct Research has a ‘buy’ rating to the stock. It has predicted a rally of 16.21 per cent from the previous close with a target price of Rs 1,100 per share for one year. SBI Cards is a multi-year growth story and provides a unique opportunity to participate in high potential credit segments with strong profitability. The brokerage firm believes that it is a proxy to the fast-growing digital payments with a strong parentage. It believes SBI Cards would post a healthy PAT growth of 45% CAGR in FY21EFY23E and reach RoA, RoE of 5.9%, 25.6%, respectively, by FY23E.
Computer Age Management Services Ltd (CAMS): The stock was listed in the current fiscal. It will require a jump of nearly 20 per cent from the previous session’s close to touch the target price of Rs 2,100 per share. Great Terrain, an affiliate of Warburg Pincus, is the current promoter of CAMS with 31 per cent stake while other marquee shareholders include HDFC Bank (3.33% stake) and HDFC Ltd (5.99% stake). CAMS is a structural growth story with opportunity to participate in relatively under penetrated and high potential Indian asset management market. It is a proxy to the growing mutual fund industry with high RoE. Technological expertise, long-standing client relation and leadership in the duopoly RTA market with entry barriers remain key business strengths.
Gateway Distriparks: The brokerage firm expects the stock to jump 35.51 per cent from the current levels. It has pegged a target price of Rs 240 per share for 12 months. Post a rebound in port container volumes from October 2020 onwards, the container rail segment has witnessed normalisation in on-year performance (seeing double-digit growth in the Exim segment since November). GDL’s capex is expected to remain in a range bound territory (Rs 50-150 crore) and will be mainly spent in developing secondary feeder terminals, as DFC continues to build efficiency into rail transportation (same volume of cargo can be carried in lesser number of trains with higher turnaround times, increased speed and double stacking).
(The stock recommendations in this story are by the respective research and brokerage firm. Financial Express Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)