Here Are The Top Stock Picks For April 2024 By Axis Securities

Axis Securities Report

Here are our top picks for April 2024:

Coal India - Coal is here to stay

Current market price Rs 434 / target price- 510 / Potential Upside- 17%

Coal India Ltd. - We value the stock at 5.0 times one-year forward enterprise value/Ebitda multiple on FY26E Adjusted Ebitda.

We arrive at our target price of Rs 510/share, implying an upside of 17% from the current market price.

Key risks:

The key risk to our Buy rating is the fall in international coal prices from the current level leading to a collapse in e-auction premiums. The decline in E-Auction volumes versus our expectations could pose a downside risk to our target price and rating.

Federal Bank - Aspiring on RoA of 1.5% by FY25E despite NIM pressures

Current market price- 150 / Target price-180 / Potential Upside- 20%

Federal Bank Ltd.’s key strengths continue to be-

1. Sustained credit growth,

2. Strong liability franchise,

3. Improving fee income,

4. Gradually improving cost ratios and

5. Stable credit costs backed by healthy asset quality metrics.

The bank is working closely with the recruitment agency to identify the successor for the current CEO Mr. Shyam Srinivasan who is slated to retire in September 2024.

We maintain our Buy rating on the stock with a target price of Rs 180/share (1.3 times Sep-25E adjusted book value).

Key risks:

• loan growth moderation,

• Asset quality challenges in the higher-yielding segment.

JTL Industries – A structural growth story

Current market price- 183 / Target Price- 275 / Potential Upside- 50%

We have a Buy rating on the stock and value JTL Industries Ltd. at 23 times of our FY26 earnings per share to arrive at our March 2025 target price of Rs 275/share.

We revise our target multiple from 25 times earlier to 23 times led by broader correction across small-mid cap stocks which had 'Zenith Multi Trading DMCC' as shareholder/warrant holder.

JTL’s management has clarified on non-connection with Zenith apart from being a preference share holder, and reiterated continuity of its earlier capex plans.

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