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3 hot stock picks from Geojit Financial Services

Federal Bank, UltraTech Cement and RBL Bank are on the radar of Geojit Financial Services

Geojit Financial Services recommends the following stocks:

Federal Bank Ltd                                 

Rating: BUY                              CMP: Rs115                                     TP: Rs134


Federal Bank Ltd (FB) is a mid-sized private commercial bank having a network of 1252 branches across India with a loan book size of ~Rs77,000cr.

FB maintained steady business growth in Q1FY18 with healthy 28 percent YoY & 18 percent YoY growth in Loan and deposits respectively. Loan growth outlook continues to remain robust supported by maturing retail network and strong traction in mid-size corporate and retail loans. Asset quality outlook has further improved due to reduction in large risk assets. Fresh slippages are expected to reduce in the coming quarters leading to lower provisions and we expect strong 32 percent CAGR in earnings over FY17-19E. FREE STOCK TIPS

Ultratech Cement Ltd

Rating: BUY                              CMP: Rs4,090                                  TP: Rs4,514


UltraTech Cement Ltd. (Ultratech), part of the Aditya Birla Group, is the largest producer of grey & white cement and ready-mix concrete in India.

Ultratech has completed the acquisition of Jaiprakash Associates’ assets in Q1FY18 and  overall capacity has increased by 21.2 MT to 93 MT. The focus now is to improve the operational efficiency and utilisation level of the acquired assets to 60 percent over the next one year and 70 percent by FY19. We expect the acquisition will be earnings dilutive in the short run, however the volumes are likely to grow at 19 percent CAGR over FY17-19E led by steady ramp up of Jaypee assets and pickup in demand from housing and infrastructure sectors.

RBL Bank Ltd

Rating: Accumulate                        CMP:Rs528                           TP:Rs591


RBL Bank Ltd. has emerged as one of the fastest growing private sector banks with a network of 215 branches and 374 ATMs.

RBL Bank continue to maintain high growth momentum with 40 percent YoY growth in advances and 45 percent YoY growth in earnings during Q1FY18. Higher earnings growth, steady asset quality, improving business mix and above industry average loan growth will help the bank to sustain premium valuations over new generation private sector banks.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol are their own and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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