Kotak Securities Initiates "Add" On Two Large & Mid Cap Stocks With Attractive Valuation

Kotak Securities initiates coverage on two leading stocks, Bandhan Bank & Bharti Airtel with an "Add" rating. The brokerage sees a high potential upside in the share price of the stocks. Both stocks are placed at attractive valuations by the brokerage. Below are the key takeaways from the stocks:

Bharti Airtel limited

Bharti Airtel is a leading global telecommunications company headquartered in New Delhi. It ranks amongst the top 3 mobile service providers globally in terms of subscribers. It is the 2nd largest Telecom sector company. It is a large-cap company having a market capitalisation of Rs 4,76,835 crore. 

Kotak Securities has placed an "Add" call on the stock with a target price of Rs 900 apiece. The brokerage sees an 11% potential upside from its current level in 12 months. 

The stock is currently trading at Rs 813.80 apiece on NSE, 0.96% up from its previous close. Its 52-week high is Rs 860.55 apiece and its 52-week low is Rs 628.75 apiece, respectively. 

The stock fell 2.89% in the past 1 month and gained 6.8% in the past 3 months, respectively. It has given 1958% positive return in the past 1 year. In 3 years it has given 78.69% maximum positive returns. In the last 5 years, it has given 53.04% positive returns. 

Bharti Airtel - brokerage's comments

The brokerage has said, "We believe Bharti is well-placed to compete with R-Jio on 5G rollouts driven by 1) India wireless market repair, 2) moratorium on government dues, and 3) pending call money from the rights issue. We ascribe an 8x EV/EBITDA multiple to Bharti's India wireless business, as we believe Bharti should continue to command a premium to global telcos, driven by its superior growth and margin profile. Our SoTP-based FV of Rs 900, includes the Rs 93 option value for the Indian wireless market's duopoly scenario (we assign 50% probability to duopoly in our base case)."

Bandhan Bank Limited

Bandhan Bank is a private-sector commercial bank in India. It has a PAN-India presence and offers a wide range of banking products & services and asset & liability products. It is a mid cap banking sector company having a market capitalisation of Rs 38,803.84 crore. 

The brokerage has assigned an "Add" on the stock for a potential upside of 18% with a target price of Rs 280 per share. The stock is currently trading at Rs 238.60 apiece on NSE, trading 1.88% up from its previous close. The stock hit the 52 week high at Rs 349.55 apiece and the 52 week low at Rs 209.55 apiece on NSE
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The stock made its debut on the stock exchange on 27 March 2018. It has fallen 49.67% since its inception. The stock surged 2.67% in the past 1 week, whereas, in the past 3 months, it fell 9.98%. Over the past 1 year, it fell by 5.03%. It has fallen 51.9% in the past 3 years. 

Bandhan Bank - brokerage's comments

The brokerage said, "We are a bit surprised that the bank has not re-rated despite these positive announcements in this month. Perhaps, investors are still concerned on the slippages in 2HFY23 as highlighted previously. We believe that the slippages are well past peak levels and the probability of fresh negative surprises appears to be low. Maintain ADD with FV unchanged at Rs 280. The cycle has turned for MFI players, and Bandhan, despite being slow, is likely to see similar outcome."

Disclaimer

The stocks have been picked from the brokerage report of Kotak Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.