4 High Conviction Stocks To Buy From This Renowned Brokerage Firm

Markets have come-off a bit, with November seeing the indices dropping as much as 3.90%. The markets are likely to tread with caution following worries over the Omicron covid-19 variant. Here are some stocks to buy as recommended by Emkay Global.

Buy Eicher Motors Stock

Emkay Global has recommended buying the stock of Eicher Motors in its high conviction buy list. According to the brokerage firm, the order book is healthy at over 150,000 units, supported by Classic 350 and Meteor 350 models.

"Production levels are improving on a sequential basis, and Q3/Q4 volumes are likely to be higher than Q2 levels.  Several new models are in the pipeline, and one new model or major refresh will be launched every quarter. All new products will have customization options.

The store count stands at 2,105 units now, with 1,053 large stores and 1,052 studio stores," the brokerage has said.

According to Emkay Global, the Management expects to continue expansion with the addition of 300-400 stores annually to improve penetration. Export remains a focus area, with a presence in 149 exclusive outlets and 650+ multi-brand stores. Exclusive store count will be expanded to 175 by FY22-end. 

"We expect a robust earnings CAGR of 42% over FY22-24E, supported by the sales upcycle, market share gains and margin expansion. We have a Buy rating on Eicher with a Dec'22 target price of Rs 3,100, based on 23x P/E for the 2W business," the brokerage has said.

Buy ICICI Bank stock

Emkay Global is also bullish on the stock of ICICI Bank. "We expect the overall asset quality experience for ICICI Bank in the current cycle has been far better than market expectations, given its better quality retail portfolio built largely around captive customers, and as the lumpy corporate NPA cycle is largely behind.

Healthy demand resolution, lower restructuring pool and higher provisioning buffers are added positives," the brokerage has said.

"After long, ICICI Bank has credible and stable top management with unwavering focus on sustainable profitability vs. growth, which we believe deserves due recognition amid the spate of management rejigs in large peers. Valuations too look reasonable, thus we recommend strong Buy on ICICI Bank with a target price of Rs 950 (top pick in banking space)," the brokerage has said.

Buy Infosys stock, says Emkay Global

Emkay Global also has a buy call on the stock of Infosys. According to the firm, strong revenue momentum with stable margins, continued market share gains, strong deal intake, robust cash conversion and healthy payout (85% of FCF over a 5-year period) should support higher valuations.

"Revenue growth momentum and stable margins should drive 17.1% CAGR in earnings over FY21-24E. We expect ROE to improve from 27.1% in FY21 to 32.5% in FY24E. We have a Buy rating on Infosys with a Dec'22 target price of Rs 2,100 (30x Dec'23E EPS)," the brokerage has said.

Maruti Suzuki

Emkay Global also remains upbeat on India's largest passenger car makers, Maruti Suzuki. "The order book is healthy at over 200,000 units. Production levels are improving on a sequential basis, and Q3/Q4 volumes are likely to be higher than Q2 levels. Led by improving macros, pending order book and new products, we expect a 19% CAGR in volumes over FY22-24E.

In the next 2-3 years, major launches could include new Brezza, Jimny UV, above 4m UV and new MPV, among others.

"We remain positive on Maruti Suzuki due to expectations of cyclical upturn, which generally lasts for at least 3 years. We have a Buy rating with a Dec'22 target price of Rs 8,750, based on 27x core P/E on Dec'23E estimates, backed by DCF model and net cash of Rs1,445 per share," the brokerage has said.