Team findesh/November 10, 2023
The Indian stock market has become top performing across globe from last 10 years in term of 10.9% CAGR. Expecting, it will perform way more better than this for coming next 2 decades. Indian stock market has wide range of stocks with strong financial a market preposition. According to us, we have filtered 5 major stocks, they will be major contributor for this bull run of coming years. They all are described separately in the section below:
- ICICI Bank LTD: ICICI Bank is one of the leading private sector banks in India, with a diversified portfolio of retail, corporate, and international banking services. The bank has a strong presence in the digital and rural segments, as well as a robust capital adequacy ratio and asset quality. ICICI Bank has delivered consistent growth in its net profit, revenue, and loan book over the past few years, outperforming its peers and the industry average. ICICI Bank is expected to continue its growth momentum in the coming years, driven by its focus on innovation, customer acquisition, cross-selling, and cost efficiency. The bank’s stock price has risen by 66.5% in the past year and 28.6% year to date, as of November 10, 2023. Analysts have a positive outlook on the stock with an average target price of 1,030 implying a 10.1% upside from the current level. There are major 3 points also highlighted why do we should invest in ICICI Bank for next 10 years as below:
I. ICICI Bank has a strong growth potential in the Indian banking sector, as it has a diversified and digitalized business model, a large and loyal customer base, and a robust capital and asset position.
II. ICICI Bank has a competitive edge over its peers, as it has outperformed the industry average and the benchmark indices in terms of its financial performance, operational efficiency, and market valuation.
III. ICICI Bank has a positive outlook for the future, as it is expected to benefit from the recovery of the economy and the financial sector, the favourable regulatory and policy environment, and the growth opportunities in the rural and international markets.
- Hindustan Aeronautics LTD: Hindustan Aeronautics Ltd (HAL) is the largest defence public sector undertaking in India, engaged in the design, development, manufacture, and maintenance of aircraft, helicopters, engines, and related systems for the Indian armed forces and other customers. The company has a dominant position in the domestic market, with a market share of over 80% in the fixed-wing segment and over 90% in the rotary-wing segment along with RS 87000 crore order book which provides revenue visibility for the next 5 years. HAL has also diversified into the civil aviation and aerospace sectors and has established strategic partnerships with global players. HAL’s stock price surged by 105.8% in the past year, and 41.9% year to date, as of November 10, 2023. Analysts are bullish on the stock, with an average target price of RS. 2400, indicating 12.3% upside from the current level. There are major 3 points also highlighted why do we should invest in Hindustan Aeronautics Ltd for next 10 years as below:
I. HAL has a dominant position in the Indian defence and aerospace sector, as it has a monopoly in the domestic market, a strong order book, and a strategic partnership with global players.
II. HAL has a high profitability and cash flow generation, as it has improved its operational efficiency, margin expansion, and return on equity in the recent quarters, despite the challenges posed by the pandemic.
III. HAL has a bright prospect for the future, as it is expected to leverage its expertise and experience in the design and development of aircraft, helicopters, and engines, and to tap into the emerging opportunities in the civil aviation and aerospace sectors.
- Tata Elxsi LTD: Tata Elxsi is a leading provider of design and technology services for product engineering and solutions across industries such as automotive, broadcast, communications, healthcare, and transportation. The company has global presence, with over 60% of its revenue coming from overseas markets. Tata Elxsi has a diversified client base, with long-term relationships with marquee names such as Jaguar Land Rover, Panasonic, Renault, and Sony.
The company has also invested in emerging technologies such as artificial intelligence, cloud, the internet of things, and 5G, which offer significant growth opportunities in the future. Tata Elxsi has delivered a stellar performance in the past few quarters, with double-digit growth in its revenue, earnings, and margins. The company has also generated a healthy return on equity and free cash flow. Tata Elxsi’s stock price has soared by 116.4% in the past one year, and 16.3% year to date, as of November 10, 2023. Analysts have a favourable view on the stock, with an average target price of RS. 8500, implying a 3.7% upside from the current level. There are major 3 points also highlighted why do we should invest in Tata Elxsi for next 10 years as below:
I. Tata Elxsi has a leading position in the design and technology services industry, as it has a diversified and innovative product portfolio, a global and loyal customer base, and a strong brand value.
II. Tata Elxsi has a stellar performance in the past few quarters, as it has delivered a double-digit growth in its revenue, earnings, and margins, and has generated a healthy return on equity and free cash flow.
III. Tata Elxsi has a promising future ahead, as it is expected to capitalize on the growth opportunities in the automotive, broadcast, communications, healthcare, and transportation sectors, and to invest in the emerging technologies such as artificial intelligence, cloud, internet of things, and 5G.
- Dixon Technologies LTD: Dixon Technologies is a leading contract manufacturer of consumer electronics, lighting, and mobile phones in India. The company has a diversified product portfolio, with over 1000 SKUs across 14 product categories. Dixon Technologies has a strong customer base, comprising of leading domestic and international brands such as Samsung, Xiaomi, Philips, and Panasonic. The company has also benefited from the government’s production-linked incentive (PLI) scheme, which aims to boost the domestic manufacturing of electronic products. Dixon Technologies has shown robust growth in its revenue, earnings, and cash flow in recent quarters, despite the impact of the pandemic. The company has also maintained a high return on capital employed and operating margin. Dixon Technologies’ stock price has jumped by 108.4% in the past one year, and 0.4% year to date, as of November 10, 2023. Analysts are optimistic on the stock, with an average target price of RS 5600, suggesting a 4.6% upside from the current level. There are major 3 points also highlighted why do we should invest in Dixon Technologies for next 10 years as below:
I. Dixon Technologies has a diversified and scalable business model, as it has a wide range of products and services, a strong customer base, and a flexible and efficient manufacturing capacity.
II. Dixon Technologies has a robust growth in its revenue, earnings, and cash flow in the recent quarters, despite the impact of the pandemic. The company has also maintained a high return on capital employed and operating margin.
III. Dixon Technologies has a huge potential for the future, as it is expected to benefit from the government’s production-linked incentive scheme, which aims to boost the domestic manufacturing of electronic products, and to explore new segments and markets.
- Yes Bank LTD: Yes Bank is a private sector bank in India, offering a range of banking and financial services to retail, corporate, and institutional customers. The bank has undergone a major restructuring in the past two years, after facing a severe liquidity crisis and regulatory action in 2020.
The bank has also taken several measures to improve its governance, risk management, asset quality, and profitability. Yes Bank has reported a recovery in its business performance in the past few quarters, with a growth in its deposits, advances, and fee income. The bank has also reduced its non-performing assets, provisioning, and operating expenses. Yes Bank’s stock price has risen by 25% in the past one year, but has declined by 25.9% year to date, as of November 10, 2023. Analysts have mixed outlook for the short term on the stock, with an average target price 16, indicating a 12.6% downside from the current level. But, having strong recovery from the past 2 years makes this stock a strong investment tool for the next 10 years. There are some major points highlighted in the below:
I. Yes Bank has undergone a major restructuring in the past two years, after facing a severe liquidity crisis and regulatory action in 2020. The bank has received a capital infusion from a consortium of investors, led by the State Bank of India, and has implemented a resolution plan approved by the Reserve Bank of India.
II. Yes Bank has reported a recovery in its business performance in the past few quarters, with a growth in its deposits, advances, and fee income. The bank has also reduced its non-performing assets, provisioning, and operating expenses.
III. Yes Bank has a low valuation compared to its peers, as it has been trading at a discount to its book value and earnings. The bank has also a high dividend yield of 6.8%, as of November 10, 2023.
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