Here Are The Top Stock Picks For December 2023 By Axis Securities

Axis Securities Report

Here are our top picks for December 2023:

ICICI Bank - Consistent Outperformer (current market price Rs 947 / target price Rs 1,250 / upside potential 32%)

The bank has been consistently outperforming its peers and has been firing on all cylinders. We continue to like ICICI Bank Ltd. for its-

1. Strong retail-focused liability franchise,

2. buoyant growth prospects,

3. stable asset quality along with healthy provision cover,

4. adequate capitalisation, and

5. potential to deliver robust return ratios.

We maintain our 'Buy' rating on the stock with a target price of Rs 1,250/share (SOTP basis core book at three times FY25E and Rs 157 Subsidiary value).

Key risks:

1. slowdown in credit growth momentum

Bank of Baroda - Steady Growth With Stable Asset Quality (current market price Rs 202 / target price Rs 255 / upside potential Rs 26%)

With strong advances growth, stable margins, healthy net interest income, asset quality under control and adequate capital, we believe the bank is well-positioned to deliver a sustainable return on asset of 1% going forward.

We believe current valuations of 0.9 times FY25E adjusted book value are attractive and believe BoB is ripe for re-rating, especially given its growth potential.

We value BoB at 1.1 times FY25E ABV to arrive at a target price of Rs 255/share.

Key risks:

1. slowdown in systemic credit growth

PNC Infratech - Robust Order Book, Diversification To Drive Growth (current market price Rs 334 / target price Rs 415 / upside potential 24%)

PNC Infratech Ltd. is currently trading at 12 times and 11 times FY24E/FY25E earnings per share which is attractive. We recommend a 'Buy' rating on the company and value the stock at 11 times FY25 EPS and hybrid annuity model portfolio at one time book value to arrive at a target price of Rs 415/share, implying an upside potential of % from current market price.

Key risks:

1. delay in getting appointed date for new HAM projects;

2. lower order inflow than expected,

3. delay in HAM asset monetisation.

JTL Industries - A Structural Growth Story (current market price Rs 217 / target price Rs 265 / upside potential 22%)

With the phase-wise volume expansion in progress, we model JTL Industries Ltd.'s revenue/Ebitda/profit after tax compound annual growth rate of 46%/45%/51% over FY23/25E.

We maintain our 'Buy' rating on the stock and value JTL at 23 times it's FY25 EPS to arrive at our one-year forward target price of Rs 265/share, implying an upside potential of 22% from the CMP.

Key risks:

1. delay in execution of expansion projects,

2. volatility in steel raw material prices.

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