PICK OF THE WEEK (Dec 6)

Bank of Baroda -- BuyRecommendation by LKP Securities Factoring the healthy collection efficiency, we believe the Covid provision (30bps of the net advances) would be adequate to absorb imminent stress.The bank may raise Rs 135 billion in FY21 which is likely to boost the balance sheet further.

We believe the negatives are in the price and an inexpensive valuation (0.4x PBV) makes BOB an attractive BUY.Dabur India -- Buy Recommendation by Geojit Financial Services In Q2FY21, Revenue rose 13.7 per cent YoY driven by healthy growth in domestic and international market through launch of new products and increase in demand.EBITDA margin stood at 22.6 per cent (+50bps YoY) helped by cost reduction initiatives, i.e., Samriddhi project.New product launches, pickup in economy post lockdown, efficient supply chain, and cost reduction initiatives will boost financials in the medium to long term.

Hence, we upgrade our rating to BUY on the stock with a revised target price of Rs 584 based on 53x FY22E adj.EPS.Ashok Leyland -- Buy Recommendation by Emkay Global Financial Services ALL offers the best play on the fast-evolving CV recovery.First, ALLs market share in MHCVs will touch its cyclical high of 34 per cent as 25T trucks reclaim their share of the segment.

Second, plugging product gaps in the 3T plus LCV market offers immense scope for market share gains.Last, management has clearly articulated its capital allocation which caps investments in the ancillary businesses at about Rs 2.5 billion/year or 18 per cent of FY21-22E OCFs.We are raising our TP for ALL to Rs124 on the back of an increase in volume and margin assumptions.

Tech Mahindra -- Buy Recommendation by Emkay Global Financial Services TechM aspires to achieve 15 per cent EBITM in FY22 on the back of accelerating revenue growth, improved performance of acquired entities and automation-led operating efficiencies, partly negated by a salary hike and normalization of travel and other costs.The timeline of an uptick in 5G spending by telcos is uncertain, however, considering reasonable valuations and sound underlying business spending drivers for 5G, we assume coverage on TechM with Buy and a TP of Rs1,070 at 18x September 22E earnings.

Acceleration in revenue growth and stable margin performance would drive rerating, in our view.HCL Technologies -- Buy Recommendation by Anand Rathi Share and Stock Brokers With continuity of robust growth across Mode-2 and Mode-3 business (36.7 per cent of revenue combined), we expect the growth momentum to continue in the near term supported by strong deal pipeline and ramp up of large deals.Overall, the results are above our expectations.We maintain our BUY rating on the stock with a target price of Rs.931 per share.Hindustan Petroleum -- Overweight Recommendation by Morgan Stanley We believe the buyback should raise earnings by 5-7 per cent.It represents 7-9 per cent of outstanding capital and with major shareholder, ONGC (51.1 per cent ownership) not participating, it represents 14-17 per cent of free float.CESC -- Buy Recommendation by Antique Stock Broking With regulated Kolkata operations driving the show, we forecast moderate revenue/EBITDA/ net profit growth till FY23E.

The focus remains on WBERC regulatory order in hiking tariffs, which will improve cash collection.The other catalysts remain winning new distribution franchisees and sweating of renewable assets.

Using sum-of-the-parts, we initiate the company with a TP of INR815 and recommend a BUY.Risks: (1) Adverse or delay in WBERC regulatory order; (2) capital allocation to projects earning lower equity IRR.UltraTech Cement--Buy Recommendation by Nirmal Bang Equities Private Limited Historically, UTCEM has grown volume at higher-than industry growth rate and we expect that momentum to sustain in the medium term.Moreover, the recent inorganic acquisitions have occurred at relatively expensive valuations.

This brownfield capex will help it to balance capital costs and lead to higher return ratios.We maintain our positive stance on the company with a BUY rating and target price (TP) of Rs 5,640 (unchanged).

Mindtree-Accumulate Recommendation by Nirmal Bang Equities Private Limited From a near term perspective, MTCL believes that 3Q and 4Q could see growth similar to that seen in 2Q (QoQ basis) despite seasonal weakness.It indicated that its strategy to transform from a project-based business to an annuity-based one is still underway.

Post the analyst meet, we retain our Accumulate rating and a target price (TP) of Rs1,544 (20x September 2022 EPS).We continue to keep the discount to TCS target PE multiple constant at 20 per cent.

Voltamp Transformers -- Buy Recommendation by Prabhudas Lilladher Pvt.Ltd.We remain positive on the company due to its strong business model, debt free status and consistent free cash flow generation (current cash + Investments of Rs 6.5 billion).Going forward, the company expects sectors like infra, water, power, mining, oil and gas, ports, pharma, data centers, etc., to be major growth drivers.We expect revenue/PAT to grow at CAGR of 6 per cent /10 per cent over the next two years.At CMP, the stock is trading at a PE multiple of 11.4x/10.9x for FY21E/22E respectively.We maintain BUY rating on the stock with TP of Rs1,283 (same as earlier).

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