The current equity markets in India are significantly down due to significant outflows of foreign investors. FPI outflows in May totaled Rs. 6400, representing a significant drop in the stock markets.
The recent interest rate hikes by the US Federal Reserve and the Bank of England have triggered this significant FPI outflow. In addition, the RBI raised its key lending rate, the repo rate. These are increasing the profitability of government bonds.
So, with the stock market and the Sensex falling, now is a good time for investors to buy stocks. ICICI Direct recently recommended these three stocks to invest in for long-term growth.
Siemens Ltd
ICICI Direct has a buy call on Siemens with a target price of Rs 2856. The current market price of Siemens Ltd. is Rs 2493.85. The period given by the analyst is one year when Siemens Ltd.’s price can reach the defined target.
Siemens Ltd., incorporated in the year 1957, is a Large Cap company (having a market cap of Rs 89241.96 Crore) operating in the Engineering sector.
Siemens Ltd.’s key Products/Revenue Segments include Engineering Goods, Income from Project Development, Sale of services, Other Operating Revenue, Rental Income, Export Incentives, and Commission for the year ending 30-Sep-2021.
Granules India
ICICI Direct is bullish on Granules India and has recommended a buy rating on the stock with a target price of Rs 360.
About the Granules stock, ICICI commented, “Granules India is a vertically integrated company that manufactures API, intermediates, and finished dosages with a vision to play on its strength of economies of scale and expansion into more complex products/forms.
Granules is a large-scale vertically integrated company that manufactures API, intermediates, and finished dosages and has seven manufacturing facilities along with B2B & B2C marketing & distribution.
Revenue mix FY21: Formulations – 52%, API (API+PFI) – 48% Top five products (Paracetamol, Ibuprofen, Metformin, Methocarbamol, Guaifenesin) contributed 84% to FY21 revenues.
Upgrade from HOLD to BUY on 1) focus on backward integration, expected normalization in RM/freight inflation, 2) initiatives like passing on price hikes to customers, 3) compelling risk-reward matrix based on FY24E earnings Valued at Rs 360 i.e. 14x P/E on FY24E EPS of Rs 25.8.
