HDFC Securities Unlisted Shares

HDFC Securities prefers economy-facing and value sectors after Q1 earnings; a look at top changes in its model portfolio

mintgenie

2 min read

HDFC Securities prefers economy-facing & value stocks after Q1 FY 24 earnings.

HDFC securities said

In The HSIE coverage universe, projected earnings growth for FY24 and FY25 stands at 23.4% and 12.0% respectively, factoring in sustained margin recovery and demand momentum, but excluding the energy sector which is subdued due to petrol freeze & tax implications.

Justification

Highlights of HDFC Securities earnings view report for Q1 FY24

98% incremental Y-o-Y earnings growth attributed to only three sectors namely auto, energy & lending financials.
Key changes in its model portfolio, which are as follows -
- Inclusion/weight increase - BSE, Star Health, CDSL, Hindalco, etc.
- Exclusion/weight reduction - ICICI Securities, DLF, Torrent pharma, etc.
Large-cap stocks experienced significant earnings growth of 55% Y-o-Y, whereas midcap grew by 24% Y-o-Y basis.
Out of the company’s coverage sectors such as auto, cement, pharma, financial lending saw significant Y-o-Y revenue growth followed by low growth in sectors such as staples, real estate & metals.
On an average, the companies' profits in the coverage universe were 6.6% higher than the estimates led by the auto, energy, and metals sectors, but IT, home improvement & energy missed the target.
Earnings estimates that were deeply concentrated to certain sectors include
- Upward revisions by sectors such as Auto, Lending financials & energy by 18%, 46% & 13% respectively.
- Downward revision by sectors such as IT, Chemicals & Metals by 46%,19% & 24% respectively.

Takeaways

The company by making changes in its model portfolio to focus on economy facing & growth stocks has adopted the concept of dynamic nature.
This growth trend of the company poses an opportunity for potential shareholders to increase their returns by investing through HDFC securities, taking advantage of the growth sectors such as auto, lending financials & energy.

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