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Monthly stock picks by Motilal Oswal Financial Services: HDFC Bank, UTI AMC

Stocks to buy: LargeCap HDFC BANK – Target: ₹2,200 HDFC Bank continues to demonstrate resilience in Q4FY25, with net profit at ₹176.2b {+7 per cent year-on-year (Y-o-Y)}, supported by 10.3 per cent net interest income (NII) growth and stable margins at 3.46 per cent. Strong asset quality gross non-performing asset/ net non-performing asset (GNPA/NNPA at 1.33 per cent/0.43 per cent) and healthy deposit growth (14 per cent Y-o-Y) led to a moderation in the C/D ratio to 96.5 per cent. Loan growth remained steady at 5.4 per cent Y-o-Y, led by retail and agri segments. We expect loan growth of 10 per cent/13 per cent over FY26/FY27. The ₹12,500 crore IPO of HDB Financial will unlock value and strengthen HDFC Bank's capital position, enhancing long-term growth visibility. Trent – Target: ₹6,900 Trent aspires to grow 25 per cent annually over the long term, aligned with our FY25–27E revenue compound annual growth rate (CAGR) through its differentiated proposition to drive repeat purchases from a critical mass of consumers while staying relevant to the evolving consumer needs. India's retail market is set to hit $2.2t by 2034, led by a young, urbanised, and digitally connected population. Fashion and lifestyle segment is expected to grow at 10–12 per cent CAGR to ₹18 trillion by 2028. Despite 6.5x revenue growth over FY19-25, Trent's share remains in low-single digits, which augurs well for the company. We remain positive on Trent for its robust footprint additions, strong double-digit growth, long runway for growth in Star (presence in just 10 cities) and emerging categories like beauty and lab-grown diamonds. We expect FY25–27E CAGR of 25–26 per cent in standalone revenue, Earnings before interest, tax, depreciation and amortisation (Ebitda), and profit after tax (PAT), driven by the continuation of robust area additions in Zudio. MidCap Kaynes Tech – Target: ₹7,300 Kaynes Technologies is expanding across electronics manufacturing services (EMS), High-Density Interconnect (HDI) PCB manufacturing, and Outsourced Semiconductor Assembly and Test (Osat), targeting high-tech, high-margin segments. It aims to achieve $1 billion revenue by FY28, supported by strong orders in automotive, aerospace, industrial, and medical sectors, along with strategic North American acquisitions. HDI PCB and OSAT units are expected to commercialise by Q4FY26, targeting ₹2,500 crore revenue in FY27 and ₹5,000 crore by FY28, with robust margins (30 per cent/20 per cent). FY25 revenue rose 51 per cent Y-o-Y to ₹2,700 crore, slightly below guidance due to railway order delays. We estimate revenue/Ebitda/PAT CAGR of 57 per cent/61 per cent/70 per cent over FY25–27, driven by scale and margin gains. Federal Bank - Target: ₹230 Federal Bank has demonstrated strong business growth, rebalancing its portfolio toward medium- and high-yielding segments like loan against property (LAP), used CVs, gold loans and credit cards to drive profitability. We estimate loan growth to sustain at 17 per cent CAGR over FY25-28E, with asset quality remaining robust. Deposit growth is expected to accelerate at 15 per cent CAGR over FY25–28, driven by a CA-led CASA push, a stronger NR franchise, and branch realignment. CASA ratio is expected to rise to 34–35 per cent by FY28E. Asset quality remains strong with GNPA/NNPA at 1.84 per cent/0.44 per cent and provisions coverage ratio above 75 per cent. Under new CEO Mr. KVS Manian, Federal Bank is addressing its gaps and pivoting toward sustainable, return-driven growth across businesses and geographies. We estimate return on asset/ return on equity (RoA/RoE) at 1.4 per cent/15.6 per cent by FY28E, driven by better margins, asset mix shift, and improved cost efficiency. Federal Bank is one of our preferred 'Buy' rated ideas among mid-size private banks. SmallCap Time Techno - Target: ₹578 TIME is the world's largest maker of large-size plastic drums with a 50–60 per cent market share in India and a strong presence in 10 countries. It ranks 3rd globally in intermediate bulk containers (IBC), and is the 2nd largest Type-IV composite LPG/CNG cylinder manufacturer. We remain optimistic on growth led by its value-added composite products segment, backed by stable industrial packaging and strong financial discipline. With annual free cash flow of ₹400 crore, robust OCF/Ebitda (~60 per cent) and free cash flow/ profit after tax (FCF/PAT) (80 per cent), Time targets a net cash position by FY27E. We estimate a CAR of 15 per cent/16 per cent/23 per cent over FY25–28E, supported by asset monetisation, restructuring, and cost optimisation. UTI AMC - Target: ₹1,550 UTI AMC expanded its product suite with launches of a Quant Fund (Q4) and Multi-Cap Fund (Apr'25), along with smart beta & thematic index offerings. Q4 quarterly average asset under management (QAAUM) rose 17 per cent Y-o-Y, led by strong passive inflows and rising systematic investment plan (SIP) traction. It continues to deepen penetration in B30 cities, with 22 per cent of monthly average asset under management (AUM) in Mar '25 from these regions, against industry average of 18 per cent. It also added 68 new Tier-2/3 branches in FY25, aiding 0.9 million net folio additions. We project AUM/Revenue/Core PAT CAGR of 17 per cent/13 per cent/20 per cent over FY25–27. Growth will be supported by product innovation, strong Employees' Provident Fund Organisation (EPFO) mandates, digital distribution, and increasing demand for low-cost passive and hybrid investment strategies.