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Reliance Securities Report
We expect strong economic rebound, normalised commodity prices, inflation within targeted range and better visibility in H2 FY23, which would transform Nifty valuation to close to historical average. We maintain our FY23-end target for Nifty at 19,000 on 20 times FY24E earnings per share, while we introduce our Samvat 2079 Nifty target of 20,000 on 21 times FY24E. Sectors like financials, engineering, capital goods, consumer would be in focus going forward. We expect mid-cap to outperform strongly over next one year.
Escorts Kubota Ltd. – In view of long term positive trend of tractor industry, likely synergy benefit from Kubota, healthy balance sheet, strong positive cash flow and healthy return ratios, we are positive on Escorts Kubota Ltd. We believe that benefit of softer commodity cost, rural revival, improving consumer affordability in rural India and economic recovery would play out gradually in H2 FY23E, which would support valuation going forward.
Voltas Ltd. – Voltas maintained its leadership position in room AC segment and increased the market to 24.1% in Q1 FY23 from 23.4% in Q4 FY22. We expect VoltBek’s market share to improve and the cash burn to reduce, going ahead, led by the launch of new products and in-house manufacturing.
Uno Minda Ltd. – We expect strong rebound in automobile production post semiconductor shortage easing out in H2 FY23, to act as a key driver for the company in FY23E. We also expect better scale, content addition and tech oriented new products in passenger vehicles to expand its margin territory over next two-five years. Moreover, higher content per vehicle, value addition on the back of premiumisation, capacity addition of high-margin segments would be the key triggers for Uno Minda’s revenue growth outperformance and healthy earnings growth going forward.
Click on the attachment for full list of Reliance Securities’ Muhurat, Samvat 2079 stock picks:
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