Large-cap stocks, valued at ₹ 48,900 crore or higher, belong to established companies boasting significant market presence and commendable track records. These stocks are characterised by low risk, moderate rewards, higher valuations, and high liquidity.
An analyst’s target price is a forecasted future value for a stock, reflecting the analyst’s perception of a fair market value. This projection considers the company’s past performance, as well as its future objectives and strategic plans. Conversely, a lower target price suggests the analyst’s belief that the stock is expected to decrease in value.
Here are two large-cap stocks recommended by brokerage firms as having potential with an upside of up to 36%.
Avenue Supermarts Ltd
On Friday, Avenue Supermarts Ltd shares closed at ₹4,290, up 3.06 percent from the previous close on the National Stock Exchange. The company has a market capitalization of ₹2,79,197 crore.
Avenue Supermarts, known as DMart, is primarily engaged in the business of organized retail and operates supermarkets under the brand name D-Mart.
DMart has a presence in 347 locations across Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana, Chhattisgarh, the NCR, Tamil Nadu, Punjab and Rajasthan.
Avenue Supermarts Ltd. revenues increased by 17 percent year on year from ₹11,569 crores in Q3FY23 to ₹13,572 crores in Q3FY24, while net profit increased by 17 percent from ₹590 crores to ₹690 crore.
Company shares have gained 12 percent in the last six months and 24 percent in the last 12 months.
CLSA gave a ‘buy’ rating on Avenue Supermarts Ltd. with a target price of ₹5,107 per share, representing an upside potential of up to 19% from Friday’s close price of ₹4,290 per share.
CLSA anticipates D-Mart’s store count to triple by fiscal year 2034, reaching a total of 341 outlets, propelled by the chain’s expansion into new and existing states. D-Mart’s competitive pricing is attributed to its streamlined operational model. Driven by the company’s strategy to extend its reach across both current and untapped regions.
The brokerage highlighted an addressable market opportunity exceeding $500 billion, with only a fraction—less than 5%—being organized. Additionally, it underscored D-Mart’s ability to maintain the lowest consumer prices due to its minimal operating expenses. CLSA also foresees Avenue Supermart’s stock benefiting from the future growth driven by private labels.
Bajaj Finance Ltd
On Friday, Bajaj Finance shares closed at ₹6,757,up 0.62 percent from the previous close on the National Stock Exchange. The company has a market capitalization of ₹4,18,281 crore.
Bajaj Finance revenues increased by 31 percent year on year from ₹10,787 crores in Q3FY23 to ₹14,161 crores in Q3FY24, while net profit increased by 22 percent from ₹2,973 crores to ₹3,639 crore.
Bajaj Finance Ltd. shares have declined by 10 percent in the last six months and 17 percent in the last 12 months.
Bajaj Finance Limited is engaged in the business of lending for retail, SME, and commercial customers, with a significant presence in urban and rural India.
Bajaj Finance has a significant market share of 45% in the NBFC segment in commercial/personal loans, and the company has achieved a 23% CAGR, which no other Indian bank, NBFC has witnessed in the last couple of decades.
Bofa Securities gave a ‘buy’ rating on Bajaj Finance Ltd with a target price of ₹9,175 per share, representing an upside potential of up to 36% from Friday’s close price of ₹6,757 per share.
Bofa stated that a 24% de-rating of the stock over a period of 5 months is considered remarkably high. Despite this, with improving liquidity, the growth outlook remains robust, and the trends in asset quality are positive.
Written by Omkar Chitnis
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