SBI, Airtel To Cholamandalam - Here Are The Top Stock Picks For January 2025 By Axis Securities

Axis Securities Report

SBI - Current market price - 795 / Target Price: 1,040 / Upside 31%

State Bank of India remains well poised to deliver a strong earnings growth of 12% compound annual growth rate over FY24-27E alongside maintaining return on asset of 1-1.1% driven by-

1. Strong growth while maintaining a comfortable LDR,

2. Focused efforts to improve fee income profile,

3. Contained opex ratios and

4. Steady credit costs and strong asset quality.

Key risks:

• Significant slowdown in credit growth

Cholamandalam - Current market price: 1,186 / Target Price: 1,675 / Upside 41%

Cholamandalam Investment and Finance Company Ltd. continues to eye pre-tax RoTA of 3.5% over the medium term, while FY25 RoTA could range between ~3.2- 3.3%.

We expect Cholamandalam to deliver RoA/RoE of 2.3-2.5%/20-23% over FY25-27E.

Key risks:

• Moderation in growth momentum,

• Inability to scale up new products and

• Asset quality concerns cropping out.

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