4 Stocks To Buy Now In August From Angel Broking For Potential Upside Of Up To 42%

1. Dalmia Bharat:

Angel Broking is bullish on the country’s leading cement company for gains of 42% as it has set the target price of Rs. 2650. As per the brokerage, the company is a play on the ramp up in volumes owing to its new additional capacities in East and West. The company is in the process of augmenting its capacity by approximately ~8MTPA (~5.4MTPA in FY22E and ~2.6MTPA in FY23E, mostly in East & Murli) which would drive volume growth going forward.

Well defined capital allocation policy, robust demand environment will aid future price performance

“Moreover, the company has laid out a clear capital allocation policy and has plans to grow its capacity by 15% CAGR and reach 110-130MTPA by FY30”, said the brokerage report. The brokerage is of the view that the demand environment is likely to remain strong given the impetus on infrastructure spend. “We expect cement volume CAGR of around 12% over FY21- 23E on the back of strong demand and capacity absorption”, added the report.

2. Safari Industries:

Brokerage firm gives a ‘Buy’ rating on the leading luggage company, Safari Industries. The company commands a leadership position in the mass segment and the transition from unorganized sectors to organized space would be advantageous for the luggage maker.

Wide distribution network, focused product strategy and diversified product mix to aid growth:

The company’s distribution reach is commendable and to complement it, Safari has a focused product strategy and diversified product mix that will facilitate and strengthen growth going forward. Angel Broking believes “Safari will report strong top-line as well as bottom-line growth on the back of strong growth in the organized sector, wide distribution network, strong brand & promoter initiatives”, said the brokerage in its report.

3. Galaxy Surfactants:

The brokerage firm Angel Broking bets on Oleo-chemical-based surfactants market leader, Galaxy Surfactants and recommend a ‘BUY’ with a target price of Rs. 3594, implying an upside of over 18% from the last traded price as on august 17, 2021.

Focus on Increasing its share of high margin specialty care products, strong association with MNCs to drive growth

The company has been gearing up to increase the share of its high margin specialty care products that now accounts for around 40% of the company’s revenues while the remaining is contributed by the performance surfactant business. Further it caters to global MNCs not only in India but also supplies raw material to them in the US, EU and MENA region. “We expect revenues to register a strong growth from FY22 onwards given the company’s exposure to the personal and home care segment and recovery in the specialty segment”, noted the broking major.

4. Jindal Steel & Power:

Angel Broking recommends a ‘Buy’ on the stock of the country’s largest iron and steel company, Jindal Steel & Power. The global steel cycle like other commodities has seen a turnaround owing to demand normalization in developed countries as economies there have opened up after the Covid threat. Now with the huge demand surge, prices of steel in the international markets have scaled to record highs.

Deleveraging by Jindal Steel makes the company a ‘Re-rating’ candidate

The company posted good set of numbers for the June ended quarter of FY22 owing to firm steel prices in the local markets. This is even when the company has exhausted all-low cost iron ore from Sarda mines. The company’s debt is expected to significantly come to around Rs. 8000 crore by FY2022 which should lead to a rerating in the stock. “At current levels the stock is trading at EV/EBIDTA of 4.0xFY2022 EBIDTA and offers value given the upturn in global steel cycle”, said the brokerage report.

Disclaimer:

The stocks listed in the article are taken from the brokerage report of Angel Broking and need not be construed as investment advice. The company and the author will not be held responsible for any losses on any investment call taken based on this report.

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