Fundamental picks by HDFC Securities: Lupin, Craftsman Automation and more

SUMMARY

HDFC Securities is bullish on Lupin, Fortis Healthcare, Craftsman Automation and Solar Industries on the back of strong fundamentals, healthy growth outlook and attractive valuations of these stocks.

By CNBCTV18.comJun 8, 2021 9:15:33 AM IST (Published)

Lupin | Buy at last traded price (LTP) and add more on dips to Rs 1,090 | TP: Rs 1,435 | HDFC Securities believes that in the next 2-3 years, there will be a strong growth trajectory for the company driven by a healthy growth outlook in the domestic market, regulatory resolutions, moderating price erosion and key product launches across generic and speciality categories. Currently, Lupin trades at ~23x FY23E earnings.

Fortis Healthcare | Buy at LTP and add more on dips to Rs 199-200 band | TP: Rs 271 | Fortis Healthcare is a good bet on the structural long-term growth story of the Indian healthcare & diagnostics industry, considering its established presence across healthcare verticals, quality testing capabilities and structural changes under the new management, HDFC Securities said. With reignited capex plans, cost control initiatives, focus on B2C and higher-end care, it believes there is a scope for re-rating of this stock.

Craftsman Automation | Buy at current market price and add on further dip on Rs 1,530 | TP: 2,045 | HDFC Securities initiated Buy on the stock which is available at an attractive valuation of 17x of FY2023E EPS. It is positive on the company on account of strong demand outlook in MHCVc and tractors industry, robust growth potential in auto aluminium and storage division, healthy financial performance despite challenging year and expansion in RoCE driven by lean capex and debt reduction.

Solar Industries | Buy at LTP and further add at Rs 1,412 | TP: 1,826 | Solar Industries has been one of the consistent compounders in the Indian explosives basket. Its revenue and PAT are likely to record a growth of 19.5 percent and 26 percent CAGR over FY21-23E along with consistent FCF generation and stable working capital, the brokerage firm said. Segment-wise, CIL/Institutional/Trade/Export & Overseas/ Defense revenue will likely grow at CAGRs 13/14/14/21/68% respectively over the same period.