Fundamental picks: These stocks have an upside of 26% and 35% respectively

SMC | May 6, 2015, midnight


AXIS BANK LIMITED


Valuation: The bank, is well positioned for future growth, is focusing on cross- selling to existing customers. This is a key driver for growth. In FY18, the management expects the Bank's Advances portfolio to grow around 5%faster than system growth. As has been the case in recent quarters, the Retail advances business is likely to continue to remain the key engine of growth in FY18. Thus, it is expected that the stock will see a price target of ‘ 631 in 8 to 10 months time frame on a target P/ BV of 2. 7x and FY18 (E) BVPS of ‘ 233. 83.


S H KELKAR  AND COMPANY


Valuation: The company has strong balance sheet and consistently reporting steady performance on quarter on quarter due to healthy domestic sales. The performance of its Flavor division has been exceptional with the successful integration of the tuck-in acquisition and robust results reported in its existing markets. The management expects performance of flavor division and recent acquisition would enable the company to substantially increase its market share in the industry. On the back of strong balance sheet, strategic initiatives would drive further growth. Moreover it is witnessing an increased level of business activity in its domestic and international markets and expects these prospects to eventually translate into concrete business going forward. Thus, it is expected that the stock will see a price target of ‘ 420 in 8 to 10 months time frame on an expected P/ E of 44x and PY18 EPS of ‘ 9. 55.

 

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