Reliance Industries, Maruti Suzuki, Axis Bank, SBI Life & More - Top Stock Picks For January 2023 By KRChoksey
Investment period for stock picks is six months from the date of the recommendations provided.
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KRChoksey Research Report
Investment period: six months. Research idea: Fundamental
Reliance Industries Ltd. - RIL’s gross refining margin and refining earnings are likely to improve with bottom out in Singapore GRM in near term. Company has announced capex of Rs 750 billion in petrochemicals. The 5G launch for Jio is likely to reach pan India by December 2023. We expect average revenue per user, Ebitda of Jio to grow at 13.4 %, 15.5%, respectively, over FY22-24E. METRO acquisition will further strengthen Reliance Retail’s physical store footprint. Reliance Retail and Jio to be growth drivers in near to mid term.
Maruti Suzuki India Ltd. - In Q2 FY23, Maruti Suzuki saw an improvement in gross margins due to steep Japanese yen depreciation, cost reduction, and softening of commodity costs. Realisations improved due to a better mix, the full effect of the price hike taken in Q1 FY23, and the newly launched Alto having higher pricing than the previous Alto. A good proportion of bookings for Grand Vitara and Brezza are for the top-end models, which will aid margins. Steady commodity costs from Q2 FY23 levels, better demand for higher-end and newly launched models, cost efficiency, and higher operating leverage due to an increase in volumes are expected to be tailwinds for margins going forward.
Axis Bank Ltd. - On the business front, Axis Bank has been focusing on strengthening its balance sheet with a focus on granularity and retailisation as its main theme. Axis Bank has been strengthening its retail portfolio for the past few quarters, where the mix of the retail loan stands at ~58% as of September 2022, with a growth of 17% compound annual growth rate over FY19-H1 FY23. However, the bank has a well-balanced loan portfolio to manage the cyclical risks. On the deposits side, the bank is sharply focusing on granular deposits with an improving share of premium retail deposits.
SBI Life Insurance Company Ltd. - SBI Life's diverse product mix includes 51% savings, 12% protection, 15% annuity, and 17% group savings. The company is increasing its share of protection and annuity which will be the key engines of growth led by increasing awareness and importance of financial savings products and changing lifestyle. It has also been partnering with new bancas to promote its non-par segment. SBI Life is lowering its unit linked insurance plan share to reduce market volatility and improve margins. Its innovative product pipeline is expected to strengthen the margins at a sustainable level.
Click on the attachment to read the full list of KRChoksey's top stock picks for January 2023:
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