HDFC Securities Identifies Two Smallcap Stocks as Fundamental Picks

HDFC Securities Identifies Two Smallcap Stocks as Fundamental Picks

VoM News Desk | January 30, 2024 | 12:30 PM IST | Breaking News | Follow on Google News

HDFC Securities Identifies Two Smallcap Stocks as Fundamental Picks

HDFC Securities Identifies Two Smallcap Stocks as Fundamental Picks

As the Indian stock market experiences varied performances across indices, HDFC Securities’ Retail Research highlights Satin Creditcare Network and ZF Steering Gear (India) as Fundamental Picks. These smallcap stocks present potential for decent returns within a 2-3 quarter time horizon.

Satin Creditcare Network:

• Successfully navigated challenges, focusing on growth prospects.
• Witnessed improvement in profitability metrics in H1FY24.
• Factors contributing to improvement include increased net interest margin (NIM) due to higher yields and lower credit costs.
• Attractive valuation at 0.8x FY26E P/ABV.
• Base case target: ₹279; Bull case target: ₹303.
• Buy in the range of ₹251-257, add on dips in ₹221-225.

ZF Steering Gear (India):

• Key supplier of steering systems to the Commercial Vehicle (CV) and tractor segments.
• Duopolistic market position with around 90% market share.
• Expected growth in Revenue, EBITDA, and PAT at 12%, 17%, and 32% CAGR over FY23-FY26E.
• Anticipates EBITDA margin expansion to 14.4% and RoE increase from 6% in FY23 to 11% by FY26E.
• Buy in the band of ₹920-940, add on dips in ₹825-845.
• Base case fair value: ₹1,022; Bull case fair value: ₹1,100.

HDFC Securities suggests investors consider these stocks for potential gains in the evolving market conditions.

VoM News Desk

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