Domestic brokerage and research firm HDFC Securities has recommended top two stock picks which are pharmaceuticals company Cadila Healthcare and IT Consulting & Software provider Oracle Financial Services Software Ltd (OFSS) as ‘Buy’ ratings with the time frame of over the next two quarters.
HDFC Securities’ top stock picks –
Cadila Healthcare: Cadila has corrected around 30% from its peak. This provides an attractive entry point with favourable risk reward. Healthy ANDA filing and launch momentum, injectables business, innovative pipeline, and in-licensing deals, strong domestic business outlook and vaccine business ramp up are some of the key positives, said the brokerage.
“Investors can buy the stock at LTP and add further on dips to ₹410 for base case fair value of ₹513 and bull case fair value of ₹551 over the next two quarters.”
Oracle: The company has a strong balance sheet with net cash at around 14% of market cap and, in the recent years, has been distributing most of its free cash flows as dividends. The stock’s current dividend yield is an attractive 5% at the current price and the company has given best dividend payments over the last five years, except for FY19 when it paid no dividend to conserve cash, said HDFC Securities in a note.
“We believe the base case fair value of the stock is ₹4.335 and the bull case fair value of the stock is ₹4,701 over the next two quarters. Investors can buy in the ₹3,942-3,982 band and add further on dips in the ₹3,570-3,610 band,” the brokerage house advised.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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