Stocks to Buy in August: Key benchmark indices have had an upbeat start to the month of August rising more than 2 per cent in the 6 trading sessions on buying of FIIs and declining crude oil prices. The market closed near its four-month high on August 8, with the Nifty reclaiming 17,500. In the previous session, S&P BSE Sensex settled at 58,853 points while the NSE Nifty 50 index shut shop at 17,525. The benchmark indices have erased nearly all year-to-date losses with the help of a rally that started in the middle of June. Analysts at Yes Securities have picked 4 stocks that they believe are well placed for long term investors.
Bharti Airtel: BUY|Target price: Rs 901|Upside: 28 per cent
The telecom giant is not just a major force in India but with over 490 million customers it operates in 17 countries across South Asia and Africa. “We believe despite the 5G investment payouts, Bharti is witnessing a shift in its FCF generation capability that could translate into healthy deleveraging,” Yes Securities said. 4G mix improvement, coupled with market share gains from Vodafone Idea, and continued tariff hikes are seen as triggers for the stock. Analysts noted that the consolidation in the sector with only two major players in Reliance Jio and Bharti Airtel, while Vodafone Idea struggles, has led to multiple rounds of tariff hikes, translating into an increase in ARPU.
The Bharti Airtel stock has gained just around 2 per cent so far this year to now trade at 704 per share. This translates to an upside of nearly 28 per cent.
Axis Bank: BUY|Target price: Rs 918|Upside: 23 per cent
Yes Securities believes Axis bank is churning its book towards high-yielding segments now. “Axis Bank’s market share in net credit cards added has improved dramatically after a lean CY20. Axis bank’s thrust on high yielding segments has started playing out in FY22,” analysts noted. Additionally, the private sector lender is well capitalised with its CAR of 17.83 per cent and CET1 ratio of 15.16 per cent, including profit. Analysts also see the acquisition of Citibank India’s retail business as an opportunistic bet which may prove to be beneficial for Axis Bank. The stock is up 7 per cent so far in 2022 to trade at Rs 746 per share. This suggests 23 per cent upside for the bank stock.
PSP Projects: BUY|Target price: Rs 725|Upside: 13 per cent
Shares of PSP Projects have risen sharply this year, zooming 29 per cent so far this year to now trade at Rs 639 per share. Now, Yes Securities predicts another 13 per cent up-move in the stock. PSP Projects is an integrated EPC company across the construction value chain from Design, Construction, Mechanical, Electrical, Plumbing (MEP), Interior, O&M Services. “It had a total order inflow of Rs 1,802 crore in FY22 whereas for FY23 until now it has a total order inflow of Rs 1,097 crore. The company has guided for steady growth of 20-25 per cent in the order book every year,” analysts said. With a strong order book and reliable project execution, Yes Securities believes the company can grow its topline as well as the bottom line.
Ramco Cements: BUY|Target price: Rs 931|Upside: 23 per cent
Ramco Cements’ shares have been in the firm grip of bears this year, tanking 26 per cent to now trade at Rs 755 per share. Analysts at Yes Securities like the stock for its strong retail presence in the south, low-cost cement producer characteristic and steadily increasing capacity share. “We believe TRCL will generate healthy operating cash flows of Rs 26.8 billion and fund its ongoing capex and plans to deleverage its balance sheet over FY23-24E,” Yes Securities said. The target price suggests a 23 per cent upside for the cement stock.