Top 2 stocks by Ashika Research which can give up to 11% return

Prestige Estates Projects and LIC are the top two stocks which can give up to 11 percent return.

World equity markets added to their best month since the COVID vaccine breakthroughs of late 2020 amid minutes from the US Federal Reserve’s recent meeting revealed that policy officials maintained that monetary policy had to be restrictive and had little appetite for rate cuts. 

Domestic equity benchmarks ended with minor gains last week and came under selling pressure at the higher levels as the market is likely waiting for a breakout trigger from state election results ahead of the 2024 general elections. 

Meanwhile, the decline in US 10-year bond yields and tapering FII sales bode well for the market. Global financial sector powerhouse Goldman Sachs upgraded India to ‘overweight’ category would also have a positive impact in the market. 

Further, a rally in the global markets, fall in US 10-year bond Yield and dollar index to 3-month low boosted the sentiments.

Here are the 2 stocks which can return up to 11%:

Prestige Estates Projects | CMP: Rs 915 | Target: Rs 1010 | Upside: 10.4%

Prestige Estates has grown its pre-sales to Rs 12,900 crore in FY23 from Rs 5,500 crore in FY21. This growth can be attributed to the successful expansion into the Mumbai market and the consolidation of its leadership position in Bengaluru, where the company achieved bookings of around Rs 8,000 crore. 

With the upcoming large launches in Hyderabad, Chennai, and MMR, the management now expects to clock bookings of Rs 20,000 crore in FY24 against its initial guidance of Rs 16,000 crore.

The company has forayed into the Mumbai market in FY22 with the launch of Prestige City at Mulund and has gradually strengthened its presence in the city by acquiring six projects across various micro markets. The GDV of these projects stands at Rs 22,000 crore. 

Mumbai’s contribution to overall sales has improved to 21 percent in FY23 from 7 percent in FY22 and it is now almost at par with a few large developers in the city despite being a new entrant. The share of Mumbai is set to improve further as the company plans to launch Prestige Nautilus and Ocean Tower in H2 FY24.

Life Insurance Corporation Of India (LIC) | CMP: Rs 678 | Target: Rs 755 | Upside: 11.4%

LIC’s H1 FY24 numbers came line with the consensus estimates on the back of strong boost in embedded value led by equity-market performance, and part provision on account of increased family pension liabilities. 

On the value of new business (VNB) front, margins for H1 FY24 at 14.6 percent were flat YoY and came slightly better than consensus estimates driven by a YoY improvement in Group VNB margin, led by the changed profile of the group product mix. Persistency ratios were largely stable.

The company reiterated a focus on selling more profitable products, such as non-par plans, specifically protection and annuity plans. To this end, the company introduced three non-par products during H1 FY24. 

The share of non-par business in individual annualized premium equivalent (APE) has improved from 9 percent in H1 FY23 to 10.8 percent in H1FY24. The management is looking to increase it further. LIC’s moat is its strong agency network (1.35mn) which commands 49 percent market share and contributed 96 percent of the company’s individual NBP at end-H1 FY24. 

The company has a robust distribution capability with 81 bancassurance partnerships, 1.35 million agents, 153 corporate agents, 296 brokers, 19,000+ micro insurance agents and 3,600+ branches.

_{Disclaimer: The information provided in this blog post is for informational purposes only and should not be construed as investment or trading advice. The author is not a financial advisor and does not have any professional qualifications in this area. The author does not guarantee the accuracy or completeness of the information provided. Any action you take based on the information in this blog post is done at your own risk. Please consult with a financial advisor before making any investment decisions.}