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    Prabhudas Lilladher adds RIL, Emami in top picks, removes SBI Cards, Kansai Nerolac from portfolio

    Prabhudas Lilladher adds RIL, Emami in top picks, removes SBI Cards, Kansai Nerolac from portfolio

    Prabhudas Lilladher adds RIL, Emami in top picks, removes SBI Cards, Kansai Nerolac from portfolio
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    By CNBCTV18.com  IST (Published)

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    Brokerage house Prabhudas Lilladher has included Reliance Industries in its top picks of the model portfolio as it believes that the current pressure in the refining business and recent stock correction provides an opportunity to buy a strong franchise in telecom and retail.

    Brokerage house Prabhudas Lilladher has included Reliance Industries in its top picks of the model portfolio as it believes that the current pressure in the refining business and recent stock correction provides an opportunity to buy a strong franchise in telecom and retail.
    The brokerage has also included Emami in its top picks given the seasonal benefits due to the strong onset of winters after many years and low base for the next 3 quarters and benign input costs. Further reduction in promoter pledge and strong growth can re-rate the stock from current levels of 20xFY23 EPS, the brokerage said in a report.
    However, it has removed SBI Cards & Payments Services from top picks given near-term uncertainty due to the expected increase in NPA in Q3FY21. It also removed Kansai Nerolac as it expects limited upside in the near term for the stocks.
    In its model portfolio, Pabhudas Lilladher is 'Overweight' on pharma, consumer and IT sector and has made some portfolio changes post the sharp run-up in a few stocks/segments.
    Auto
    : The brokerage retains 'Overweight' on auto even as it removed Hero MotoCorp and included Ashok Leyland on expectations of an uptick in demand in coming months.
    “We increase weightage for Eicher given growing strength in Royal Enfield. We are increasing weight on M&M as strong rural demand and steps on improving capital allocation can lead to further re-rating of the stock,” it said.
    Banks: It retained 'Overweight' on banks and included IndusInd Bank in the model portfolio as it believes regulation on likely increase in promotor ownership up to 26 percent and 77 percent PCR can further re-rate the stock.
    Consumer: The brokerage retained 'Overweight' on the consumer sector, although it cut weight to 12.2 percent.
    “We are removing Jubilant Foods and Voltas from model portfolio post sharp run up recently. We cut the weight marginally in HUL, Asian paints and Britannia. We introduce Avenue Supermart in Model portfolio for the first time,” it said.
    Pharma: It is 'Overweight' on pharma significantly and increased weightage on Cipla. The brokerage also introduced Sun Pharma in the model portfolio as it believes that the resolution of the Halol facility can rerate the stock given massive underperformance in the past 2-3 years.
    Insurance: The brokerage house retained 'Overweight' on insurance even as it cut weight on HDFC Life Insurance post sharp run-up recently.
    “We turn underweight on Bajaj Finance post sharp run-up recently. We also increase weightage on HDFC given improving demand for housing in the country,” it said.
    IT: The brokerage retained 'Overweight' on IT on strong growth visibility and Reliance Industries on improving traction in telecom and retail business.
     
    (Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.)
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