12 stocks: On Sharekhan's Radar for up to 37% Upside
The market was roped off by the bears which pulled the Nifty below 13,950 and the Sensex by 1,000 points intraday on January 27. Below is a list of 12 stocks that are on Sharekhan's radar for up to 37 percent upside:
- Century Plyboards:Rating: BuyLTP: Rs 265.75Target: Rs 295Upside: 11 percentA strong traction seen in the residential segment pan-India is expected to benefit Century Plyboards in FY2022. In terms of the government’s plans of enhancing domestic manufacturing and making it globally competitive, the company has key positive triggers lying ahead.
- Titan Company: Rating: BuyLTP: Rs 1,440.70Target: Rs 1,710Upside: 18 percentThe festive demand momentum continued to fetch benefits for Titan’s jewellery business. The brokerage expects a double-digit growth trajectory in the jewellery business while in the eyewear business, the focus is on improving the profitability and in watches the focus is more on achieving sustainable revenue growth.
- Arvind: Rating: BuyLTP: Rs 49.65Target: Rs 68Upside: 37 percentThe government's revamped focus on improving the textile industry and a higher demand for textile products in international markets will benefit Arvind's business in FY2022.
- SRF:Rating: BuyLTP: Rs 5,361.70Target: Rs 6,760Upside: 26 percentSRF’s capex intensity focuses on the specialty chemical business would increase over the next few years. Robust earnings growth outlook (expect 23% PAT CAGR over FY2021E-FY202E), strong return ratio (RoE/RoCE of 20%/21%), and robust cash flows (to support the growth plan) keep us constructive on medium to long-term growth prospects of SRF.
- Vinati Organics: Rating: BuyLTP: Rs 1,187.95Target: Rs 1,550Upside: 30 percentA pipeline of 12 new products in R&D phase and massive export opportunities in the specialty chemical sector (amid China plus one strategy by global customers) would drive sustained long-term high double-digit earnings growth in Vinati Organics. Moreover, a strong global economic recovery has led to a sharp rise in oil price.
- Repco Home Finance: Rating: BuyLTP: Rs 247.45Target: Rs 330Upside: 33 percentRepco has focused on niche, small-ticket, non- salaried home loans, resulting in higher spreads for the company. We expect EPS growth to clock a ~10% CAGR over FY20-23E, with stable asset quality.
- GNA Axles: Rating: BuyLTP: Rs 377Target: Rs 410Upside: 8 percentWitnessing strong traction from domestic and global OEMs, driven by the recovery in US and Europe’s CV market and India’s tractor markets. Operating profit margin (OPM) would expand due to operating leverage and cost-control measures.
- Tata Elxsi: Rating: BuyLTP: Rs 2,658.55Target: Rs 2,850Upside: 7 percentWe expect the company’s revenue growth to pick up faster than expected over the next few years, with a stable margin profile with faster-than-expected demand recovery in the auto segment, strong traction in other verticals, and recent deal wins in the ERD space. We expect TEL’s revenue and earnings to post a CAGR of 20% and 27%, respectively, over FY2021-FY2023E.
- HCL Technologies: Rating: BuyLTP: Rs 955.50Target: Rs 1,250Upside: 30 percentThe brokerage believes that HCL Tech’s capabilities in infrastructure and application will support its growth in a strong cloud adoption environment. We have raised earnings estimates for FY2021E/FY2022E/FY2023E, to factor in strong all-round Q3 results, strong deal wins, robust deal pipeline and improving spends on digital transformation.
- HPCL: Rating: BuyLTP: Rs 216.65Target: Rs 275Upside: 27 percentThe brokerage expects a healthy dividend yield of 7% on account of strong earnings growth and completion of the capex cycle (refinery expansion at Mumbai, Vizag, and new refinery in Rajasthan) to improve FCF generation from FY2023.
- Mastek:Rating: BuyLTP: Rs 1,123.50Target: Rs 1,300Upside: 15 percentThough the abrupt exit of John Owen might have some impact on UK business in the medium term because of his incomplete work, the company would manage growth momentum, given its multi-layer relationships with the UK public accounts and deep relationship with the government. Further, Evosys is well-poised to deliver strong growth in the next two-three years led by strong traction for Cloud-related technologies.
- Tata Consumer Products: Rating: BuyLTP: Rs 572.65Target: Rs 685Upside: 19 percentThe management focuses on smooth integration of Tata Chemical’s consumer business and building a large consumer business in the domestic market. The company is well-poised to achieve double-digit revenue and PAT growth of 11% and 23% respectively over FY2020-23 with a gradual improvement in OPM.