3 Stocks To Buy In July & Hold Till Next Year

Manappuram Finance

Manappuram Finance

One of the reasons to recommend the stock of Manappuram Finance is the sharp fall from levels of Rs 240 to the current levels of Rs 85. This has resulted in the p/e multiples contracting substantially and dividend yields increasing. The shares of the company following the sharp fall in the share price are now available at a p/e of just 5 times one-year trailing p/e. Apart from this the stock is also available at a reasonable dividend yield of 3.5%. Now, there is no denying that loan growth business has slowed down. However, with the economy recovering, we believe that there is potential for earnings growth and better numbers in 2022-23. The company is also expanding its retail reach, which should also help. At the current market price of Rs 85, the downside risks we believe are pretty low, which is why we are recommending buying the stock of Manappuram Finance. The shares of the company were last seen trading at Rs 75.10 on the NSE.

ICICI Securities

ICICI Securities

This is another stock that has fallen dramatically, though there has been no change in the fundamentals of the company. The shares of the company have fallen from Rs 894 to Rs 434, which means the share price has halved. The trailing p/e is now just 10 times and we do not see growth falling off the roof in the coming year. In fact, with the investors fraternity constantly increasing. We believe it leaves immense potential for the brokerage business. We also believe there is an immense opportunity for investors to buy the stock at these levels, as valuations have become very attractive. The company provides a host of services including retail broking, institutional broking, portfolio management services etc. ICICI Securities has also a strong presence in the nvestment banking business, which consists of equity capital market services and financial advisory services that cater to corporate clients, government, and financial sponsors. We believe the shares are attractive to buy at the current levels of Rs 434, which is a price to earnings of just 10 times. The shares of the company are available with an equity dividend of Rs 12.75 per share as well.

HDFC Bank

HDFC Bank

This stock is a must buy at the current levels, as the bank would continue grow at 15 to 20%. The fall in the stock price from Rs 1700 to Rs 1340 has certainly made the shares attractive. There is a huge scope for the bank following the merger with parent company, Housing Development Finance Corporation. While some believe that the merger could be EPS accretive from day 1, others believe that meeting compliance requirements set by the RBI could pose a challenge. Given the strong pedigree and the solid fundamentals in place, we do not foresee a major problem for HDFC Bank. One of the reasons for the stock falling is the huge holdings by Foreign Portfolio Investors in the shares. Now, FPIs are liquidating their positions in the Indian markets and chasing high yielding bonds, as interest rates across the globe rise. This is one of the reasons the stock has taken a knock from 52-week levels. However, from a long-term perspective of say about 5-years from now, the stock could easily double, which is still a very good annualized growth rate of 20%. Buy the shares, if you are a long-term investor. In fact, buying the stock through a systematic SIP is not a bad idea.


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