3 Stocks To Buy And Power Your Portfolio In November

Gujarat Gas

Motilal Oswal sees a near 25% upside in the stock of Gujarat Gas and has recommended buying the same for an upside target of Rs 775.

“In our conference last month, the company had reiterated its intent to sustain margins at Rs 4.5-5.5/scm for the full year FY22/23. To combat the current high spot LNG prices, Gujarat Gas took a price hike of Rs 9.5/scm in PNG-industrial, taking its realisation to Rs 47/scm (highest ever). This hike was in addition to the Rs 4.5/scm hike taken in the last week of Aug’21,” the brokerage has said.

According to the brokerage the addition of 60+ new industrial units at Morbi, expansion of current units, and emergence of a ceramic cluster at Aniyari (potential of 0.5mmscmd) will continue to drive the company’s volume growth.

“We maintain Buy and value the stock at 26x Dec’23E EPS to arrive at our target price of Rs 775. Any underperformance by Gujarat Gas on the EBITDA/scm or volume growth front v/s our projections poses a key risk for the stock,” the brokerage has said.

Dalmia Bharat

Motilal Oswal also has a buy call on the stock of Dalmia Bharat with a price target of Rs 2,500, as against the current market price of Rs 20212.

Dalmia Bharat has commenced commercial production at its 2.25mt grinding unit (Line 2) in Cuttack, Odisha and has also begun trial-runs at the acquired plants of Murli Industries (3mt grinding capacity in Maharashtra).

“We estimate Dalmia Bharat to achieve a sales volume CAGR of 10.8% over FY21-24E, driven by its capacity expansions. The company’s capital allocation policy aims to improve shareholder return and should be taken positively if executed properly. We maintain our estimates and Buy rating on the stock,” the brokerage has said.

AU Small Finance Bank

AU Small Finance Bank reported a net profit of Rs 2.8 billion (up 42% YoY – adjusted for the AAVAS sale in 2QFY22; MOSLe: INR2.2b), driven by lower provisions, which stood negligible at Rs 36 million due to sharp recoveries and upgrades, resulting in a release of provisions. These provisions were utilized to increase contingent provisions, which now stand at Rs 3 billion (0.84% of loans).

AU Small Finance Bank reported a strong 2QFY22, led by robust core operating performance, while negligible provisions drove the sharp earnings beat. Asset quality improved significantly, supported by healthy recoveries/upgrades, while collection efficiency improved to 109%.

“On the business front, Retail deposit mix continues to improve, while AUM growth remains strong. We will review our estimate and target price after the earnings concall on 29th Oct’21,” the brokerage has said.

Disclaimer

The above stocks are picked from the brokerage report of Motilal Oswal. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.