Canara Bank, IndusInd Bank, KNR Constructions: What analysts said on these 3 stocks

Two brokerages BP Equities and Ashika Stock Broking have suggested three stock ideas based on both technical and fundamental research, Canara Bank, IndusInd Bank and Constructions. The brokerages see up to 18 per cent rally on the two counters in over the next few weeks.

IndusInd Bank
Brokerage: BP Equities
Target Price: Rs 1,425
Upside Potential: 18%
Due to robust credit growth in the Indian economy, IndusInd Bank is banking upon the momentum and the management expects high teen growth in FY23 and more than 20 per cent growth in FY24. The bank expects its liquidity position to be comfortable as it is highly nimble to increase deposit rates compared to other large banks, BP Equities said.

IndusInd Bank is continuously focusing to invest in physical and digital resources and has added 55 branches this year along with 2,700 employees in banking and 3,650 employees in vehicles and microfinance and distribution. On the valuation front, BP Equities has assigned a P/BV multiple of 1.8 times of FY24E book value and arrive at a target price of Rs 1,425.

KNR Constructions
Brokerage: Ashika Stock Broking
Target Price: Rs 280
Upside Potential: 10%
The Centre’s capex would continue to remain strong in the rest of the financial year, Ashika Stock Broking said. For highway construction, the government plans to award projects of 12,000 km in FY23, which is similar to the record levels witnessed in FY22.

Irrigation projects, a key infrastructure spending area of state governments, are also expected to pick up. Ashika said KNR has a robust order book worth Rs 8,807 crore, as of September 2022, which is about 2.5 times its FY22 revenues.

The stock, since forming an elevated base at Rs 210 level, had been on a rising spree and is now at the verge of providing a legitimate breakout of the previous swing high.

Buying demand has recently emerged as volume accumulation is seen in recent periods. On the oscillators front the daily 14 periods RSI remain in up trend, thus, validating positive bias. Ashika said one can expect the stock to head higher initially to its previous swing high of Rs 280.

Canara Bank
Brokerage: Ashika Stock Broking
Target Price: Rs 368
Upside Potential: 11%
Canara Bank reported strong core pre provision operating profit in the September quarter, driven by controlled opex and strong NII growth. Asset quality metrics continue to improve with gross NPL and net NPL at 6.4 per cent and 2.2 per cent. Loan growth was robust at 20 per cent YoY and 5.2 per cent QoQ led by strong growth in the wholesale segment. Deposit growth was moderate with CASA ratio at 32 per cent.

The stock has generated a breakout above a falling multi year since 2010 onward signaling end of corrective phase and resumption of the up move thus offers fresh entry opportunity. The breakout is supported by strong volume highlighting larger participation at the breakout area. One can expect the stock to maintain positive bias and head towards Rs 368 level in the coming weeks. Among the oscillators the daily MACD has generated buy signal thus validates positive bias.

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