For Upto 30% Returns, Buy These 3 Stocks Says Broking Firm Motilal Oswal

Jubilant Pharmova

The company is an integrated global pharmaceuticals company having three business segments Pharmaceuticals, Contract Research and Development Services and Proprietary Novel Drugs.

Motilal Oswal Institutional Equities sees a solid upside of almost 30% on the stock of Jubilant Pharmova and has recommended a “buy” on the stock with a price target of Rs 920, against the current market price of Rs 713.

It maybe recalled that the USFDA recently issued an Import Alert at Jubilant Pharmova Roorkee facility, escalating the regulatory concerns at the site. However, Motilal Oswal believes that the company would have minimal impact given that the USFDA has granted exemption to certain products from the Import Alert list, subject to Jubilant Pharmova meeting some conditions.

“We have tweaked our estimates for FY22/FY23E to reflect the impact of the import alert at the Roorkee plant. We expect an 11% CAGR in Radiopharma sales and 8% CAGR in CDMO (adjusted for one-time sales of COVID products in FY21) over FY21-23. Thus, we expect a 10% earnings CAGR over FY21-23. We maintain BUY on the stock, with a target price of Rs 920 (valued at 9x 12M forward EV/EBITDA),” the brokerage has said.

Shares of Jubilant Pharmova last closed at Rs 713.30 on the NSE.

Coromandel International

Broking firm, Motilal Oswal also has a buy call on the stock of Coromandel International with a 19% upside on the stock for a target of Rs 1040, against the current market price of Rs 864. The company is India’s second largest Phosphatic fertilizer player, is in the business segments of Fertilisers, Specialty Nutrients etc.

Coromandel International’s key markets are Maharashtra, Telangana, Karnataka, West Bengal, and Odisha and Andhra Pradesh. According to the brokerage the structural story of the company remains intact with regard to increasing awareness among farmers about having balanced nutrients in crops. According to the firm focus to reduce cost of raw materials, launch of 3-4 molecules in the Crop Protection segment, inorganic growth, and focus on profitable growth in the Retail business by reorganizing stores depending on consumption pattern are some of the reasons to buy the stock of Coromandel International.

“We expect a revenue/EBITDA/PAT CAGR of 9%/9%/12% over FY21-23E. We value Coromandel International at 18x FY23E EPS to arrive at our target price of Rs 1,040. We maintain our Buy rating on the stock of Coromandel International,” the brokerage has said.

Cyient

Motilal Oswal has set a 15% upside target on the stock of Cyient as the brokerage sees increasing spends in the ER&D industry and Cyient’s strategy to digest these spends as a supporting factor in the near-to-medium term.

Cyient is engaged with customers across their value chain helping to design, build, operate, and maintain the products and services that make them leaders and respected brands in their industries and markets.

Cyient 1QFY22 revenue de-grew 4% QoQ in USD terms (in line with our estimate). This was led by 20% QoQ decline in the DLM business.

“We raise our estimates on better potential margin performance as the management increases its intake of freshers as well as benefits from operating leverage. We maintain our Buy rating on attractive valuations. Our target multiple of 20x FY23E EPS takes our target price of Rs 1,090/share, implying an upside of 15%,” the brokerage has said.