RECOMMENDED BY SAMCO

1) Hindalco (CMP: 136.65; Target Price: 160)

Prices of aluminium and other base metals are at a decade low. Too much pessimism often leads to reversals. The company has been reporting subdued numbers, which the market has already discounted. Hindalco is a classic contra bet. It is a large diversified player with efficient operations. The moment aluminium prices pick up, the stock will deliver phenomenal returns.

2) Bajaj Finserve (CMP: 2,826.20; Target Price: 2,900)

Bajaj Finserve is the holding company for Bajaj Finance engaged in financing diversified consumer products. It primarily caters to the urban elite and middle class. While the Bajaj Finance stock has been rerated a number of times, the holding company, Bajaj Finserve, in spite of having life and general insurance businesses too, has been languishing, which has created a big margin of safety.

3) M&M Fin (CMP: 340.60; Target Price: 380)

Two years of drought had hit the purchasing power of people in rural India. In the intervening period, M&M Finance took a big hit on profitability. The stock oscillated between Rs 350 and Rs 200 for over two years, making it the cheapest in the category in terms of the price-to-book value in the past five years. Since this year’s monsoon is expected to be normal, the fortunes of company will turn around.

CMP is current market price; CMP and Target Price in Rs