Are Bandhan Bank and M&M stocks next ITC of their segments — explained

Like ITC shares, M&M share price too remained sideways from February 2021 to February 2022. But, the auto stock is now giving sharp upside movement. In fact in YTD time, M&M share price has surged to the tune of 60 per cent. Like M&M in auto segment, Bandhan Bank shares in banking segment are also giving same picture in the banking segment. Bandhan Bank share price is a contrast to Bank Nifty index as the banking index hit its life-time high in the week gone by whereas Bandhan Bank shares hit 52-week low on Friday session. However, if we look at the views expressed by analysts, banking segment is expected to outperform other segment in short to medium term and Bandhan Bank share is a rare banking stocks that is available at a discounted price. so, the question is whether M&M and Bandhan Bank shares are next ITC of auto and banking sector?

Speaking on M&M share price outlook, Mansi Lall, Research Associate at Prabhudas Lilladher said, “Mahindra And Mahindra share price has witnessed a 50 per cent run-up over the last six months. This is largely attributed to the turnaround in its automotive business and its well-played-out capital allocation strategy. Consecutive successful launches in the SUV space have provided a robust boost to its volumes. This is supported by the shift in consumer preferences towards premium cars. Going ahead, servicing its healthy order book in the SUV space along with new model launches and revival in the tractor industry can benefit the profitability. Also, its proactiveness to leverage the EV trend can lead to value unlocking.”

On Bandhan Bank share price, Jitendra Upadhyay, Senior Research Analyst at Bonanza Portfolio said, “Bandhan Bank’s focus has been shifted towards the non-EEB portfolio with growth opportunities across all mix in the non-EEB segment Bandhan will look to grow its book more than 20% in FY23E primarily led by the non-EEB book. We expect the non-EEB segment to grow faster than EEB segment and grow at more of than 30% CAGR over FY22-25E, while overall advances growth is expected at 20% CAGR over the same period.

“Despite Covid, Bandhan Bank has managed its GNPA/NNPA asset quality ratio below the 6.6%/3.4% mark over FY21& 22. Bandhan Bank is well placed to deliver ROA/ROE in excess of 2.1%/13.5% on a sustained basis as compared to MFI industry peers. The company offers a price-adjusted book (P/adj bv) multiple of 2.5, Thus, considering all the parameters Bandhan Bank valuation are at a discount compared to its peers,” said Bonanza Portfolio expert.

On technical outlook of M&M and Bandhan Bank shares, Sumeet Bagadia, Executive Director at Choice Broking said, “M&M shares can be bought at current market price for the near term target of ₹1400 to ₹1450 maintaining stop loss at ₹1280. On breaching ₹1450 resistance, M&M shares may climb up to ₹1600 apiece levels in short term.”

Sumeet Bagadia of Choice Broking said that Bandhan Bank share price may give sharp upside once it gives breakout above ₹250 apiece levels. He said that the stock has immediate support placed at ₹220 whereas it has strong support placed at ₹200 per share levels. He advised long term investors to buy above ₹250 levels and wait for breakout expected at ₹250 levels in Bandhan Bank shares.

M&M vs Bandhan Bank: Which stock to buy

Batting in favour of M&M shares, Ravi Singhal, CEO at GCL Securities said, “If someone is interest in reaping benefits like ITC shares, one should go for M&M shares in current markets. M&M share price is in uptrend. The company has raised prices of its various segment vehicles and metal prices have tumbled to the tune of 20 per cent in recent quarters. So, the company is expected to improve its margins and its launches have a long wait to the tune of even one year and its competitors are unable to latch on this long term wait. This means, M&M new launches are expected to remain in demand as well. So, outlook for M&M is expected to remain strong provided the company continues to attract customers through new launches in coming quarters as well.”

“I recommend positional investors to buy M&M at current levels for one year target of ₹1950 to ₹200 whereas in next two years from now, one can expect M&M share price to hit ₹2700 levels,” said Ravi Singhal of GCL Securities.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.