SAMVAT 2078
Axis Securities recommend the following themes for SAMVAT 2078, taking into account all of these economic and market developments:
Small and mid-cap stocks are gaining traction, and balance sheet leveraging is expected to pay off in 2022, with increased return ratios and profitability.
Because of their improved outlook and present low interest rate regime, housing and banking will be significant subjects to watch in 2022.
The infrastructural sector is becoming a more prominent theme as the government increases its spending in this area.
Long-term structural topics such as digital and cloud will continue to be important.
The demand for home improvement has increased and is expected to remain strong in 2022.
Travel & Tourism appears to be a more promising theme, which has gained traction following a boost in vaccination rates.
ACC Limited – Capacity Expansion And Premiumization To Drive Growth
The brokerage firm recommends ACC buy with a target price of Rs. 2570. The stock was last trading at Rs. 2236, representing a gain of 15 percent.
“With its unwavering focus on cost optimization measures through project PARVAT, robust product demand, and improved pricing, we expect the company to register Revenue/EBITDA/APAT CAGR of 9%/13%/14% over CY21-CY23E driven by volume CAGR of 7% over the same period. The stock is currently trading 9x and 8x CY22E and CY23E EV/EBITDA which is attractive compared to other larger peers in the sector. We, therefore, recommend a BUY on the stock with a target price of Rs 2,570/share which implies an upside of 15% from the CMP,” the brokerage has said.
KNR Constructions Limited – Well-positioned To Capitalize On The Industry Tailwinds
The brokerage firm recommends KNR Constructions a buy with a target price of Rs. 325. The stock was last trading at Rs. 282, representing a gain of 15 percent.
“We expect the company to report Revenue/EBIDTA/APAT growth of 18%/17%/30% CAGR respectively overFY21-24E. The stock is currently trading at 17x and 15x FY23E and FY24E earnings. We recommend a BUY in the stock with the target price of Rs 325/ share, implying an upside potential of 15% from CMP,” the brokerage has said.
Cyient – Resilient Business Structure and Long-term Contracts to accelerate Growth
The brokerage firm recommends this stock a buy with a target price of Rs. 1300. The stock was last trading at Rs. 1094, representing a gain of 19 percent.
“We believe Cyient has a strong business structure from a long-term perspective and possesses multiple long-term contracts with the world’s leading brands. Furthermore, with depreciation in INR, lower travel cost, and lower on-site expenses, the company’s EBITDA margins are likely to expand in the near term. Against this backdrop, we recommend a BUY and assign a 22x P/E multiple to its FY24E earnings of Rs 59.2/share to arrive at a TP of Rs 1,300/share, implying an upside of 19% from CMP,” the brokerage has said.
Mindtree – Encouraging Growth, Superior Visibility
With a target price of Rs. 5100, the brokerage company recommends a buy. The stock was last trading at Rs. 4,555, a 12 percent increase.
“We believe Mindtree enjoys a resilient business structure and has a proven track record of strong and efficient execution capabilities. With INR depreciation, lower travel cost, and lower on-site expenses, EBITDA Margins are likely to expand in the near term. We recommend a BUY on the stock and assign 39x P/E multiple to its FY24E earnings of Rs 129.3/share to arrive at a TP of Rs 5,100/share, implying an upside potential of 12% from CMP,” the brokerage said in its Diwali report.
ICICI Securities – More Than Just a Broker!
With a target price of Rs. 940, the brokerage company recommends a buy on ICICI Securities. The stock was last trading at Rs. 763, a 23 percent increase.
“The re-engineered business model will help ISEC remain a formidable player in an intensely competitive landscape and will also enable gains in market share. We continue to like ISEC for its superior ROE profile, better brand recall, and innovative product proposition offered across customer segments, making it an eligible candidate to trade at premium valuations vis-a-vis its peers. We recommend a BUY on the stock, valuing ISEC at 20x Sept’23E EPS and arrive at a target price of Rs 940/share,” Axis Direct said in its research report.
Can Fin Homes- Well-positioned for the next leg of growth
With a target price of Rs. 800, the brokerage company recommends a buy. The stock was last trading at Rs. 656 a 22 percent increase.
“The management is now focusing more on the growth front. The affordable housing space is still relatively ‘a specialist housing finance arena’ and companies catering to this segment have traded at P/B valuations upwards of 3x. We believe CANF has notable scope for expansion in its valuations and hence we maintain a BUY rating on the stock with a target price of Rs 800 (3x FY23E ABV),” the brokerage has said.
Cholamandalam Investment – Revival On The Cards
With a target price of Rs. 690, the brokerage company recommends a buy. The stock was last trading at Rs. 604, a 14 percent increase.
“We continue to retain our positive long-term outlook on the company backed by the marquee management and its ability to resiliently sail the business through tough periods. We keenly eye management’s plan to roll out new strategies in the near term and the possibility of a banking license. We recommend a BUY with a target price of 690 (4.5x FY23 P/ABV),” the brokerage has said.
SBI Life Insurance – Huge Potential For Growth
With a target price of Rs. 1350, the brokerage company recommends a buy. The stock was last trading at Rs. 1172, a 15 percent increase.
“SBIL, among private life insurers, possesses by far the largest bancassurance network, which plays the most critical role in providing scalability. Furthermore, SBIL has low-cost ratios which protect margins during downturns. With the gradual shift toward a profitable product mix and relatively comfortable valuations, SBIL remains well-placed in the life insurance space. We remain positive on the stock and maintain a BUY with a Target Price of Rs 1,350/share (2.6x FY24EV),” the brokerage has said.
APL Apollo Tubes – Robust Performance Backed by Strong Fundamentals
With a target price of Rs. 960, the brokerage company recommends a buy on APL. The stock was last trading at Rs. 807, a 19 percent increase.
“The current volume expansion plan with a consistent focus on growing market share, improving contribution from value-added products and leaner balance sheet bode well from the medium to long-term growth perspective. We recommend a BUY on the stock with the TP of Rs 960 (adjusted for 1:1 bonus) valuing it at 30x P/E of FY24E EPS,” the brokerage has said.
Safari Industries – Set to Pack and Roll as Normalcy Kicks In
With a target price of Rs. 930, the brokerage company recommends a buy. The stock was last trading at Rs. 840, an 11 percent increase.
“We remain believers in the promising Indian Luggage Industry growth story given multiple growth levers such as 1) accelerated shift from unorganized labels to brands, 2) rising preference for leisure travel, 3) increased focus on strengthening the Safari brand, and 4) de-risking of sourcing from China to alternate sources in Bangladesh and India. We recommend a BUY on the stock with the TP Rs 930/share valuing the stock at 45x P/E on its FY24E EPS as we expect Safari to report strong 40% Revenue CAGR over FY21-24E,” the brokerage said in its Diwali report.
Disclaimer
The above stocks are picked from the Diwali brokerage report of Axis Securities. 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.
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