Hot Stocks: Brokerages on HDFC Bank, Infosys post Q4 results and Bharti Airtel

We have collated a list of recommendations from top brokerage firms from ETNow and other sources:

ICICI Securities on Bharti Airtel: Buy | Target Rs 960
ICICI Securities maintained a buy rating on Bharti Airtel with a target price of Rs 960. “The biggest disappointment for Bharti we have heard from investors is the lack of free cash flow (FCF) generation in the past, which has capped shareholder value creation,” the brokerage said.

“The heavy lifting on most investments is behind except for 5G network rollout. Thus, we have come a long way, and are close to crossing the line from where Bharti can possibly generate the cashflow equivalent to 10% of its current market capitalisation, and this, we believe, is just two years away,” it added.

ICICI Securities on HDFC Bank: Buy | Target Rs 1990
ICICI Securities maintained a buy rating on HDFC Bank post March quarter results and raised the target price to Rs 1990 from Rs 1874 earlier.

HDFC Bank (HDFC) recorded Q4FY23 PAT at Rs12047 crore, up 19.8% year-on-year (YoY). “The bank utilised gains from higher NII to make investments for the future, which led to elevated opex,” said ICICI Securities.

“Profitability thereby was stable with FY23 RoE at 17.4% vs FY22 RoE at 16.9%. The merger with HDFC is likely to come into effect from July 2023, as per the management,” it added.

Phillip Capital on Infosys: Buy | Target Rs 1590
Phillip Capital maintained its buy rating on Infosys post Q4 results with a target price of Rs 1590. According to the brokerage, Infosys reported weak Q4 results with miss on revenue, margins and weak TCV.

Margin decline was restricted to -50bps where management did well to control costs in a quarter of sharp revenue miss. The management commentary was mixed with company seeing clients delaying decision making in near term; however, pipeline remains at healthy levels with cost optimization & consolidation deals and includes mega deals.

Phillip Capital said that post weak exit to FY23, the ask rate for FY24 is at +1.6% to +2.7% CQGR for next four quarters, implying pickup in growth from Q1.

“Given the uncertain environment in the near term, growth can be back-ended for Infosys, in our view. We believe the stock can remain under pressure in the near term until clarity emerges on growth,” said the report.

“Post initial reaction, we believe the risk-reward will become favorable given Infosys has underperformed Nifty IT by 7% in the last three months and valuations are below its five-year median 1 year forward PE (22x),” the report added.

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