The stock market has been on a rollercoaster ride this week. While some stocks managed to hold their ground, others came under pressure. Amidst this volatility, global brokerage firm Nomura has given a ‘Buy’ recommendation on select stocks.
Here’s a look at the top stocks the brokerage is betting on this week.
Nomura has Buy recommendation on these 4 stocks Nomura on Axis Bank: Sees 21% upside from current levels
The brokerage in its report noted that Axis Bank has seen a 13% decline in the past six months, underperforming the Bank Nifty, which dropped only 3% in the same period. According to the brokerage this underperformance is primarily due to slow loan and deposit growth and a marginal weakness in asset quality compared to its peers.
However, the brokerage remains bullish on the Axis Bank stock, reiterating a ‘Buy’ rating with a target price of Rs 1,230, implying a 21% upside from current levels.
The brokerage house believes that if liquidity conditions improve, Axis Bank could accelerate its loan growth.
At its current levels, Axis Bank is trading at 1.6 times its one-year forward book value, with a widening valuation gap compared to major private lenders like ICICI Bank, HDFC Bank, and Kotak Mahindra Bank. The brokerage projects of a healthy profitability ahead, expecting the bank to deliver a Return on Assets (RoA) of 1.7% and a Return on Equity (RoE) of 14-15% over FY26-27. “We expect loan/deposit growth to remain soft at 9%/7% in FY25, gradually rising to 11-12% over FY26-27.”
ALSO READMotilal Oswal has Buy on JSW Steel. 4 reasons why… Shriram Finance, Bajaj Finance are Nomura’s top NBFC picks
The brokerage firm has updated its outlook on non-banking financial companies (NBFCs), adding Shriram Finance (SHFL) and Bajaj Finance (BAF) to its list of top picks.
The brokerage firm sees strong potential in Shriram Finance, citing an expected 15-16% annual AUM growth and Return on Equity of 15 to 16%. The stock remains attractive, trading at just 9 times its projected FY27 earnings per share.
Bajaj Finance also remains on the brokerage ‘Buy’ list, backed by a 29% earnings CAGR and robust RoA/RoE of 4.1%/21% over FY26-27.
» Read More
