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Hottest stocks: L&T Finance & Astra Microwave – expert favorites

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TLDR: Stocks to buy: L&T Finance and Astra Microwave Products – two top picks by analysts

The Indian stock market continues to witness stock-specific reactions amid the ongoing corporate earnings seasons for the December quarter of FY24. Investors will now watch for key triggers, including the Reserve Bank of India’s (RBI) monetary policy this week. Analysts have recommended two stocks to buy, L&T Finance Holdings and Astra Microwave Products, that they believe can give decent returns in a 6-12 month period.

Key points:

  • Sensex and Nifty 50 traded higher on Tuesday.
  • Analysts recommend buying L&T Finance Holdings and Astra Microwave Products.
  • L&T Finance’s focus on retail business and declining wholesale lending business is driving higher net interest margins and return ratios.
  • Astra Microwave Products is well-positioned to capture a larger share of the growing Indian defense sector.

L&T Finance Holdings

L&T Finance Holdings is focusing on growing its retail business and reducing its wholesale lending business. The increase in retail loans is driving higher net interest margins (NIMs) and improving return ratios. The company has a healthy capital position and a low proportion of unsecured loans, so it will likely be minimally impacted by the RBI’s revised norms. The stock is available at reasonable valuations and investors are advised to buy it within a specified price range, with a target price of ₹190 in 6-12 months.

Astra Microwave Products

Astra Microwave Products has deep domain expertise and a high focus on research and development. It has moved up the value chain from manufacturing components to developing and producing high-end microwave and radio frequency application-based equipment. The company has a strong order book position, healthy orders pipeline, and execution of high-margin domestic orders, which will drive earnings in the coming period. The stock is recommended as a buy with a target price of ₹740 per share in 6-12 months.

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