Stocks To Buy In July From Angel Broking For UpTo 37% Gains

1. Jindal Steel:

Jindal Steel & Power Ltd. (JSPL) is one of India’s largest Iron & steel companies with an installed capacity of 8.6mn Tonne at the end of FY2021. Global steel cycle has turned around due to normalization of demand in developed economies due to reopening of the economies. This has led to significant increase in demand for steel which in turn has led to record high international steel prices. Moreover, China’s focus on limiting domestic production and removing export rebates for various categories of steel has also led to fall in Chinese exports which has led to lower domestic prices in China but has led to firming of international steel prices, said the report.

Substantial de-leveraging a major plus

For the q4FY21 period, JSPL has posted a very strong set of numbers due to firm domestic prices and availability of low cost iron ore from Sarda mines. The company has also been deleveraging its balance sheet with net debt expected to comedown to approximately Rs. 12,600 cr 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.

The stock has been given a ‘Buy’ with a target price of Rs. 550, this implies gains of 37% from the last traded price as on July 7 as of Rs. 400 per share.

Y/E	Sales	OPM	PAT	EPS	ROE	P/E	P/BV	EV/Sales
March	(` cr)	(%)	(` cr)	(`)	(%)	(x)	(x)	(x)
FY2022E	47159	31.1	6658	69	18	5.7	1.1	4
FY2023E	46857	28.5	6178	64	17.2	6.2	1.02	4

2. Quess Corp:

This is one of India’s leading human resource companies offering a range of solutions to employers for fulfilling their hiring requirement. The company is in the fast growing field of providing staffing solutions to companies and has registered a revenue CAGR of 52.6% between FY16 to FY21.

Hiring pick up is an advantage to this workforce stock

The company’s revenue got impacted in the H1FY21 but now as the demand for staffing solution increased, there was seen a good recovery. Now even as the second wave could impact q1FY22 results, for the rest of the financial year, the company’s performance is likely to improve on account of outsourcing of the non-core positions post the pandemic.

“Moreover, Quess Corp is trading at a P/E multiple of 20.0xFY23 EPS which is at a significant discount to Team Lease despite having similar return ratios.

Given similar growth profile and return ratios we feel that Quess Corp offers value at current levels and rate it a BUY”, added the brokerage report.

The target suggested for the scrip is Rs. 1060, implying a possible upside of 31% from the price of Rs. 808 when the scrip was recommended. Note the price for upside reference is the closing price of the scrip as of July 7, 2021.

Y/E	Sales	OPM	PAT	EPS	ROE	P/E	P/BV	EV/Sales
March	(` cr)	(%)	(` cr)	(`)	(%)	(x)	(x)	(x)
FY2022E	13037	5.4	442	29.9	16.4	27	3.4	0.9
FY2023E	15905	5.5	627	42.4	17.5	19.1	2.8	0.8

3. Stove Kraft:

Stove Kraft Ltd (SKL) is engaged in the business of manufacturing & selling kitchen and

Home appliances products like pressure cookers, LPG stoves, nonstick cookware etc. under the brand name of ‘Pigeon’ and ‘Gilma’. In the Pressure Cookers and Cookware segment, over the last two years, the company has outperformed Industry and its peers.

Competitive advantage to organised players will help the company

Post Covid, organize players are gaining market share from unorganized players which wouldbenefit the player like SKL.”Going forward, we expect SKL to report healthy top-line & bottom-line growth on the back of new product launches, strong brand name and widedistribution network”, added the company.

The company sees the scrip of SKL to hit a price of Rs. 950, an upside of 28% from the price of Rs. 740 (at the time when the stock was recommended).

Y/E	Sales	OPM	PAT	EPS	ROE	P/E	P/BV	EV/Sales
March	(` cr)	(%)	(` cr)	(`)	(%)	(x)	(x)	(x)
FY2022E	970.6	0.132	79.7	24.5	21	30.2	5	4.7
FY2023E	1125.9	0.133	97.6	30	20.5	24.7	3.9	3.5

Disclaimer:

All of the above stocks are picked from brokerage report of Angel Broking. Investing in stocks is risky and investors should do their own research. The author, the brokerage firm or Greynium Information Technologies Pvt Ltd is not responsible for any losses incurred due to a decision based on the above article. Investors should hence exercise due caution as markets have run-up significantly.