Stocks to buy: HDFC Bank, ITC, Maruti Suzuki, Reliance among top largecap high conviction stock picks by PL

Indian stock market benchmark indices, Sensex and Nifty 50, hit record high levels on Thursday led by positive domestic and global factors. Both the frontliners gained over half a percent each, while broader indices, Nifty Midcap 100 and the Nifty Smallcap 100, also touched record highs.

Nifty is currently trading at 19.2x 1-year forward EPS, which is at par with 15- year average of 19.2x. In its base case scenario, brokerage firm Prabhudas Lilladher values Nifty at 15-year average PE (19.2x) and has a 12-month target of 25,816. In its bull case scenario, it has a target for Nifty of 27,102.

The brokerage firm is overweight on Auto, Banks, Capital Goods, Consumer, Healthcare, Telecom and underweight on IT, Metals, Diversified financials and Oil & Gas sectors. 

Read here: Indian stock market ready for a dream run, target Nifty 50 at 25,816, says PL; bullish on Auto, Banks, Defence, FMCG 

In its High Conviction Picks, Prabhudas Lilladher’s top largecap stock picks include HDFC Bank, ICICI Bank, ITC, Larsen & Toubro, Max Healthcare Institute, Maruti Suzuki, Reliance Industries and Siemens.

Here are top largecap stock picks by Prabhudas Lilladher:

HDFC Bank | Buy | TP: ₹2,000

Prabhudas Lilladher believes replacement of HDFC’s liabilities over FY24-26E should lead to improving margins and better net profit CAGR. It has a ‘Buy’ rating on HDFC Bank shares with a target price of ₹2,000 apiece.

ICICI Bank | Buy | TP: ₹1,450

The brokerage firm has maintained a ‘Buy’ rating and increased ICICI Bank share price target to ₹1,450 from ₹1,300 earlier.

Also Read: Turnaround stocks to 2024: Top 5 shares that are potential multibaggers

ITC | Accumulate | TP: ₹491

ITC’s cigarette volumes rose 2.1% in Q4FY24 and the broking house expects returns to be driven by cigarette volume numbers and budget outcome in July while FMCG will continue to expand margins by 80 - 100 bps annually. It estimates 7.3% EPS CAGR over FY24-26.

It has an ‘Accumulate’ call on the stock and raised ITC share price target to ₹491 from ₹488 earlier.

Larsen & Toubro | Buy | TP: ₹4,047

Prabhudas Lilladher believes L&T is well-placed to benefit in the long-run owing to strong international prospects led by Middle East, healthy domestic pipeline on the back of public-driven capex and uptick in private capex, improving profitability in development projects, and penetration in newer areas such as green hydrogen, electrolyzers, semiconductors, data centers, etc.

It maintained a ‘Buy’ rating on L&T shares and cut the target price to ₹4,047 from ₹4,071 earlier.

Also Read: Stocks to buy: Anand Rathi’s emerging stock picks with up to 28% upside potential

Max Healthcare Institute | Buy | TP: ₹925

Max Healthcare Institute saw a healthy quarter aided by recovery in occupancy and higher ARPOB resulting from tariff revisions in Q3. Expansion plan is largely on track where +3,000 beds will be operational by the end of FY27E. Growth will be aided from expansion and ramping up of Lucknow, Nagpur units, said the brokerage firm.

It has maintained a ‘Buy’ call on Max Healthcare shares with a target price of ₹925 apiece.

Maruti Suzuki | Buy | TP: ₹14,432

Increased participation of Utility Vehicles (UV) in the portfolio, mix improvement in export, higher exposure to Hybrid and CNG models in the portfolio shall continue to drive revenue and ASP growth for Maruti Suzuki, Prabhudas Lilladher said.

The brokerage firm has maintained a ‘Buy’ call on auto major Maruti Suzuki shares and increased the target price to ₹14,432 apiece from ₹14,350 earlier.

Also Read: Stocks to buy: Here are weekly technical picks by Prabhudas Lilladher's Vaishali Parekh with upside of 14-20%

Reliance Industries | Hold | TP: ₹2,955

Reliance Industries’ O2C segment beat expectations on account of better refining margins and rise in PE and PP deltas. Retail EBITDA fell 7% QoQ with a margin of 8.3%. Jio EBITDA grew 4% QoQ with a 10.9 million QoQ addition in subscribers and flat ARPU at ₹181.7 per month.

Prabhudas Lilladher has a ‘Hold’ rating and raised Reliance share price target to ₹2,955 from ₹2,902 earlier.

Siemens | Accumulate | TP: ₹7,030

The brokerage maintained an ‘Accumulate’ rating on Siemens stock and raised the target price significantly by 52.3% to ₹7,030 per share from ₹4,617 earlier.

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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.