Stock market recommendations: According to Motilal Oswal Financial Services Ltd, the top stock picks for the week (starting March 3, 2025) are HDFC Bank and Max Healthcare. Let’s take a look:
HDFC Bank
HDFC Bank stands to benefit from the RBI’s decision to lower risk weights on bank loans to NBFCs and MFIs, easing capital constraints and improving credit flow. This will enhance loan growth (10-13% CAGR over FY26-27) while optimizing capital allocation. The bank’s strategic focus on high-yielding retail and commercial loans, coupled with improved deposit mobilization and reduced reliance on high-cost borrowings, will aid NIM stability (~3.4%). With strong asset quality (GNPA at 1.4%) and RoA/RoE estimated at 1.8%/14.2% by FY27, HDFC Bank remains well-positioned for sustainable expansion.
Max Healthcare
Max Healthcare delivered a strong 3QFY25 performance, with network revenue growing 34.9% YoY to INR22.7b, driven by 7% ARPOB (Avg. rev. per occupied bed) and 9% In-Patient volume growth. EBITDA rose 32.7% YoY to INR6.2b, supported by operational efficiency and scale-up of newer units. Max Dwarka achieved EBITDA breakeven within six months, while Lucknow and Nagpur hospitals showed robust growth. MAXH plans to commission a 500-bed Thane hospital by CY28, enhancing long-term growth. We reiterate BUY valuing at 35x 12M forward EV/EBITDA, reflecting its strong execution and expansion potential.
Disclaimer: The opinions, analyses and recommendations expressed herein are those of brokerage and do not reflect the views of The Times of India. Always consult with a qualified investment advisor or financial planner before making any investment decisions.
