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Kotak Securities lists top largecap picks to accumulate amid coronavirus crisis

Updated : 2020-03-25 13:45:18

The Indian market has witnessed a sharp selloff, in line with global markets led by the coronavirus scare. Kotak Securities, in a report, noted that the stocks are falling disproportionately due to lack of buying as FIIs have become aggressive sellers. The fear factor and panic selling have also increased the gap between stock prices and their fair valuation, it pointed out but added that the long-term fair value of most companies will not change materially based on lower earnings or cash flows of a few quarters. Post the recent sharp correction in frontline stocks, Kotak Securities has shortlisted 10 large-cap stocks for accumulation. It also noted that the earnings and price targets of many companies could get revised downwards in the coming quarters depending on the impact of COVID-19. Here's the list:

 ICICI Bank:  The brokerage has a 'buy' rating on the stock with a target at Rs 615 per share, implying an upside of 117 percent in the stock. It believes ICICI Bank's RoE is well-positioned for over 15 percent in the medium term.
ICICI Bank: The brokerage has a 'buy' rating on the stock with a target at Rs 615 per share, implying an upside of 117 percent in the stock. It believes ICICI Bank's RoE is well-positioned for over 15 percent in the medium term.
 Bajaj Finserv : The brokerage has an 'add' rating on the stock with a target at Rs 10,200, indicating a 121 percent upside. It also noted that with an increasing share of protection business and non-par savings, the value of new business margins will likely expand.
Bajaj Finserv: The brokerage has an 'add' rating on the stock with a target at Rs 10,200, indicating a 121 percent upside. It also noted that with an increasing share of protection business and non-par savings, the value of new business margins will likely expand.
 HDFC : The brokerage has a 'buy' call on the stock with a target at Rs 2,680, indicating a 76 percent upside. It expects HDFC to deliver 17 percent core earnings CAGR in FY20-22E on the back of 11 percent YoY growth in FY20E.
HDFC: The brokerage has a 'buy' call on the stock with a target at Rs 2,680, indicating a 76 percent upside. It expects HDFC to deliver 17 percent core earnings CAGR in FY20-22E on the back of 11 percent YoY growth in FY20E.
 HDFC Life : While maintaining an 'add' rating on the stock, the brokerage has indicated an upside of 72 percent for the stock with a target at Rs 590. As per Kotak, HDFC Life remains a highly profitable life insurance company with about 20-21 percent operating RoEV (return on embedded value).
HDFC Life: While maintaining an 'add' rating on the stock, the brokerage has indicated an upside of 72 percent for the stock with a target at Rs 590. As per Kotak, HDFC Life remains a highly profitable life insurance company with about 20-21 percent operating
RoEV (return on embedded value).
 Colgate:  The brokerage has an 'add' call on the stock with an upside of 46 percent. Target at Rs 1,600. It added that selective price hikes and favorable raw material environment cushioned the impact of continued aggression on promotions.
Colgate: The brokerage has an 'add' call on the stock with an upside of 46 percent. Target at Rs 1,600. It added that selective price hikes and favorable raw material environment cushioned the impact of continued aggression on promotions. "We keep the faith and retain ADD even as the street may now prefer waiting for evidence," it said.
 ITC : With a 'buy' rating, the brokerage expects an upside of 94 percent for the stock. Target at Rs 300. Valuations are cheap, especially on a relative basis, but unlikely to act as a trigger, Kotak pointed out. ITC needs to get back to meaningfully ahead-of-market growth rates in its FMCG business to excite the Street, it added.
ITC: With a 'buy' rating, the brokerage expects an upside of 94 percent for the stock. Target at Rs 300. Valuations are cheap, especially on a relative basis, but unlikely to act as a trigger, Kotak pointed out. ITC needs to get back to meaningfully ahead-of-market growth rates in its FMCG business to excite the Street, it added.
 Titan : Kotak expects an 85 percent upside in the stock with a target at Rs 1,475 per share. It maintains an 'add' call on the stock. Titan’s overall revenue and EBITDA prints for Q3FY20 were in line with Kotak's expectations. Post Q3FY20 results, the company had maintained its guidance of 11-13 percent revenue growth for Q4FY20, it added.
Titan: Kotak expects an 85 percent upside in the stock with a target at Rs 1,475 per share. It maintains an 'add' call on the stock. Titan’s overall revenue and EBITDA prints for Q3FY20 were in line with Kotak's expectations. Post Q3FY20 results, the company had maintained its guidance of 11-13 percent revenue growth for Q4FY20, it added.
 Cipla : Kotak is bullish on this stock, expecting an upside of 51 percent. It has a 'buy' rating on the stock with a target at Rs 570 per share. The brokerage believes the domestic business would grow in line or slightly higher than the market over the next few years.
Cipla: Kotak is bullish on this stock, expecting an upside of 51 percent. It has a 'buy' rating on the stock with a target at Rs 570 per share. The brokerage believes the domestic business would grow in line or slightly higher than the market over the next few years.
 Reliance Industries:  Expecting a 109 percent upside in this stock, the brokerage has given a target of Rs 1,850 for the stock. It has a 'buy' rating. Kotak said that the company may benefit meaningfully from plausible consolidation in telecom, the culmination of key transactions, and sustained growth in the retail segment. Higher crude discounts, weaker rupee and potential hike in ARPUs may mitigate lower downstream margins, it added.
Reliance Industries: Expecting a 109 percent upside in this stock, the brokerage has given a target of Rs 1,850 for the stock. It has a 'buy' rating. Kotak said that the company may benefit meaningfully from plausible consolidation in telecom, the culmination of key
transactions, and sustained growth in the retail segment. Higher crude discounts, weaker rupee and potential hike in ARPUs may mitigate lower downstream margins, it added.
 Bharti Airtel:  The brokerage has a 'buy' rating on the stock with a target at Rs 600, implying a 47 percent upside. Bharti remains a solid multi-year compounding play as long as the company and R-Jio resist the alpha-male tendencies in the forthcoming spectrum auctions, the brokerage noted.
Bharti Airtel: The brokerage has a 'buy' rating on the stock with a target at Rs 600, implying a 47 percent upside. Bharti remains a solid multi-year compounding play as long as the company and R-Jio resist the alpha-male tendencies in the forthcoming spectrum auctions, the brokerage noted.
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