Stock market recommendations: According to Motilal Oswal Financial Services Ltd, the top stock picks for the week (starting January 20, 2025) are Shriram Finance and Bharat Electronics. Let’s take a look:
Stock Name
| Rating
| CMP (Rs)
| Target (Rs)
| Upside (%)
|
Shriram Finance
| Buy
| 527
| 700
| 33%
|
BEL
| Buy
| 282
| 360
| 28%
|
Shriram Finance's diversified product suite helped it mitigate the CV business cyclicality, strategically positioning the company for a balanced loan mix and a healthier asset quality then its peers. SHFL has sold its housing finance subsidiary to Warburg Pincus for ₹39b, expecting post-tax exceptional gain of ₹13b. This could enhance balance sheet strength & support a credit rating upgrade. We expect SHFL to deliver a PAT CAGR of ~19% and RoA/RoE of 3.3%/17% by FY27E by utilizing its under-tapped expanded distribution network and cross-selling to reach new customers, introduce products and build a foundation for sustainable growth.
Bharat Electronics:Bharat Electronics is well-positioned to benefit from defense indigenization with upcoming platform orders like QRSAM, MRSAM, & Tejas Mk1A, with DAC approvals boosting sector focus. A robust order book of ₹746 billion provides strong revenue visibility, supported by stable margins, controlled working capital, & ongoing efforts to increase export & non-defense contributions. We expect revenue to grow at a 17% CAGR over FY24-27, driven by market share gains, SBUs expansion, export focus, and strong defense execution, supported by a ₹110b cash surplus.
Disclaimer: The opinions, analyses and recommendations expressed herein are those of brokerage and do not reflect the views of The Times of India. Always consult with a qualified investment advisor or financial planner before making any investment decisions.
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