The Indian benchmark equity indices managed to close the weekly F&O expiry day’s session in the green territory. The BSE Sensex rose 44.42 points or 0.07% to end at 61,319.51 while the NSE Nifty 50 advanced 20.00 points or 0.11% to close at 18,035.85 levels.
As the markets gain, here are 2 fundamentally strong stocks under Rs 500 recommended by analysts for an upside of up to 36%:
Indian Bank
The shares of the Indian Bank declined marginally on Thursday and ended at Rs 288 levels. In the past six months, the stock has scaled by 57 percent and on a yearly basis it has gained 90 percent.
The bank reported a Net Interest Income of Rs 5,499 crore in Q3FY23 which increased by 25 percent Year on Year from Rs 4,395 crore. Their net profit in the period was Rs 1,396 crore as against Rs 690 crore in the same quarter of the preceding financial year.
Their asset quality improved as gross NPAs (Non-Performing Assets) declined to 6.53 percent o as compared to 9.13 percent YoY. Net NPAs eased to 1 percent from 2.72 percent in the same quarter a year ago.
Emkay Global Financial is bullish on the stock and has recommended a ‘Buy’ rating with a target price of Rs 375 per share representing an upside of 30% from the current levels.
We expect Indian Bank to deliver a healthy RoA of 0.8-1% over FY23-25E and RoE of 13- 15%. This coupled with a strong capital/provision buffer and management’s stability makes Indian Bank one of the preferred Buys among PSBs, the brokerage highlighted.
Vedanta Limited
The shares of Vedanta inched up marginally on Thursday and ended at Rs 314 levels. In the past six months, the stock has gained more than 18 percent, however, on a yearly basis it shed 15 percent.
In Q3FY23, the company posted a consolidated revenue that stood at Rs 34,818 crore, a marginal increase Year on Year from Rs 34,674 crore. Their net profits in the period stood at Rs 2,464 crore which was a 40.8 percent drop from Rs 4,164 crore in the year-ago period.
The profitability of the company was impacted by the introduction of windfall tax in July 2022. In addition to that, the expenses of the company also increased that affected the margins.
Brokerage Edelweiss is bullish on the stock and has recommended a ‘Buy’ rating with a target price of Rs 428 per share representing an upside of 36% from the current levels.
“Besides firm zinc prices, aluminium prices too firmed up recently. The benefits of cost savings in aluminium via 3mtpa alumina expansion in FY24 and usage of captive coal would reduce CoP structurally. Besides, a 16% dividend yield makes the stock attractive,” the firm highlighted.
Written by Anoushka Roy
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