Bet on these four stocks for double-digit returnsJuly 20, 2019
Rudra Shares and Stock Brokers
Nifty 50 has gone through decent correction in the last two weeks. Probably, we could be in the last leg of the correction. The gap in the chart has been the major concern for the traders from past two months that was emerged ahead of Lok Sabha election result euphoria. The July 19 session registered the low of 11,399.3, and the gap has been filled, the scenario indicating that we can expect some stability in the market now onwards.
As per the Fibonacci retracement, we are trading near 50 percent retracement level of recent up-move and intraday charts are trading in oversold zone. The overall picture is reflecting that selling pressure is likely to mature and bounce back is not ruled out.
Though the midcaps are going through rough phase, but we believe that it is a time to look for good pedigree stocks that delivered phenomenal performance in Q1 and are expected to do so in the subsequent quarters.
Here is the list of four stocks which could give double digit return:
IndusInd Bank: Buy | CMP: Rs 1,420 | Target: Rs 1,730 | Return: 22 percent
As expected, the bank delivered good set of numbers, with consolidated PAT rising 38 percent for the quarter. Alongside the strong balance sheet growth, advances grew 28.4 percent. Expect 25 percent growth levels ahead. Both corporate and consumer finance loan-books grew handsomely at 20 percent. The management is in line with its stated planning cycle 4 (2017-2020). Giving guidance of 25-30 percent loan growth, it stood at 28 percent during Q1.
NIM’s stood at 4.05 percent higher by 13bps (QoQ) which is mainly attributable to high growth in retail lending business and expected to remain in the levels of 3.85-3.90 percent ahead. Though the increase in NNPA and GNPA at 1.23 percent and 2.15 percent translates to concerns of asset quality risk, most of them are already accounted for in books and are expected to stabilise soon.
As the merger with Bharat Financial has taken place, it has driven synergies across revenue opportunities and operating efficiencies, boosting return on asset and NIM. But, the higher piece of the pie is still left on the plate. Moreover, it would help increase penetration and strengthen balance sheet.
The focus of the management is to continue growth on the retail lending business side after this merger. It aims to add 7.5 million new savings accounts by end of FY20. This would support CASA, which will lower funding cost. Though the vehicle sale remained subdued all over, the bank delivered better growth amongst peers. Going forward, as the festive season unfolds; it could drive growth from Q3FY20.
Bandhan Bank: Buy | CMP: Rs 528 | Target: Rs 620 | Return: 19 percent
The bank has started the year with phenomenal Q1 performance. The net profit jumped 46 percent. Total deposits surged 42 percent, with the asset growth at 39.36 percent. Moreover, NII grew by 36 percent; NIM’s was higher at 10.45 percent. With the decline in provisions, the bank has…