2 Stocks To Buy Post Quarterly Numbers As Recommended By Prabhudas Lilladher

Post its quarterly numbers, broking firm Prabhudas Lilladher has recommended buying the stocks of Dmart and HDFC Bank. Here are some reasons the brokerage is upbeat on these stocks. According to Prabhudas Lilladher, HDFC Bank saw a good quarter with core PAT of Rs 118bn beating PLe by 6% led by stronger NII and other income (excl. treasury) while provisions were lower.NIM was higher by 11bps at 4.84% due to superior yields driven by faster asset repricing, while cost of funds was a tad lesser. Retail wholesale mix improved QoQ from 43:57 to 45:55 led by stronger retail accretion (due to healthy consumption spends) and de-growth in corporate (owing to pricing pressure and widening bond spreads), the brokerage has said.Advertisement Prabhudas Lilladher has said in its report that the retail deposit accretion was strong at 5% QoQ and its share is now 84% (80% in Mar22). Bank added 684 branches in Q3FY23 while it intends to add 600 more branches in Q4FY23 which would keep opex elevated. We upgrade FY23 earnings by 3% led by higher NII and lower provisions. Valuation is at 2.6x Sep24 core ABV. Maintaining multiple at 3.0x, we raise target price to Rs 1,850 from Rs 1,800. Retain BUY, the brokerage has said. Prabhudas Lilladher has cut EPS estimates of DMart by 4.2/4.3/4.0% for FY23/24/25 and target price to Rs4675 (Rs4854 earlier) following disappointing margin performance in 3Q23 (106 bps YoY EBIDTA margin decline to 8.3%). Mix deterioration due to tepid growth in Apparel and general merchandise impacted margins. Cost of retail also moved up by 50bps YoY as operating leverage failed to benefit in a festival quarter. We believe high inflation has impacted the discretionary spends in 3Q which surprisingly impacted even a deep value retailer like DMart. While grocery centric DMart Ready ramp up and competition could be other reasons, but we remain confident of the business moat of DMart, both in offline and DMart ready model, the brokerage has said. Greynium Information Technologies and the author are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.