Stocks to buy: Federal Bank, Neogen Chemicals among top four stock picks by Kotak Equities for June

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Also Read: Stock market today: Sensex, Nifty 50 hit record high after PM Narendra Modi takes oath as PMThe brokerage firm expects earnings of the Nifty-50 Index to grow 10% in FY25E and 14% in FY26E (FY24 growth was 20%). OMCs alone contributed 29% of the incremental profits of FY24. In FY25E, it expects banks, diversified financials, IT services and metals & mining to provide bulk of the incremental profits for the Nifty-50 Index.

It expects Nifty 50 index EPS of ₹1,092 in FY25E and ₹1,248 in FY26E. In its top investment ideas for June 2024, Kotak Equities recommends four stocks to buy in June. These stocks are Federal Bank, Gravita India, India Shelter Finance Corporation and Neogen Chemicals.

The brokerage firm has a ‘Buy’ call on these four stocks.Also Read: Stocks to buy: 9 stocks may rise 6-15% in the next 3-4 weeks, say analystsFederal Bank reported flat earnings, led by higher provisions for staff costs. The lender continues to do well on asset quality, despite a steady increase in higher-yielding loan products. The bank has indicated that it has made substantial progress on its succession planning, Kotak Equities noted.The brokerage firm maintains Federal Bank as a preferred pick among mid-tier banks.

It has a ‘Buy’ rating on Federal Bank shares and raised the target price to ₹190 per share from ₹185 earlier.Gravita India reported a healthy 9% YoY growth in net profit in the quarter ended March 2024. Volume growth of 14.3% YoY was impressive amid the ongoing logistics disruption in the Red Sea. The brokerage firm forecasts 22% CAGR in PAT over FY24-FY27E and expects earnings per share (EPS) to grow by 26.8% in FY25E and 22.9% in FY26E.