Navratnas for your portfolio: 9 midcaps to buy

Navratnas for your portfolio: 9 midcaps to buy
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Navratnas for your portfolio: 9 midcaps to buy
  • 
	Indian market is going through a volatile phase just at the fag end of the March quarter earnings. Experts say that it is best to invest in midcaps stock as they have been less volatile in the past 10 years, offered better returns and less riskier.

	So, beat the volatility with these 9 midcap stock that Angel Broking suggests you to buy.

    Indian market is going through a volatile phase just at the fag end of the March quarter earnings. Experts say that it is best to invest in midcaps stock as they have been less volatile in the past 10 years, offered better returns and less riskier. So, beat the volatility with these 9 midcap stock that Angel Broking suggests you to buy.

  • 
	Bajaj Electricals

	Target Price: Rs 237

	Rationale: Consumer appliances and new product launches will fuel growth going ahead and drive the top-line at a 14.9% CAGR over FY2013-15E to Rs 4,472 crore. The EBITDA is expected to grow at 70.9% CAGR, owing to lower base. The company’s EBITDA margin to rise from 3.3% in FY2013E to 7.2% in FY2015E on the back of revival in E&P segment. A strong topline growth coupled with operating performance will aid the PAT to register a CAGR of 96.7% to Rs 197 crore over FY2013-15E.

    Bajaj Electricals Target Price: Rs 237 Rationale: Consumer appliances and new product launches will fuel growth going ahead and drive the top-line at a 14.9% CAGR over FY2013-15E to Rs 4,472 crore. The EBITDA is expected to grow at 70.9% CAGR, owing to lower base. The company’s EBITDA margin to rise from 3.3% in FY2013E to 7.2% in FY2015E on the back of revival in E&P segment. A strong topline growth coupled with operating performance will aid the PAT to register a CAGR of 96.7% to Rs 197 crore over FY2013-15E.

  • 
	DB Corp

	Target Price: Rs 290

	Rationale: The stock is currently trading at 14.8x FY2015E consolidated EPS of Rs 16.8(at 2% premium to Sensex target multiple). However, considering the structural positives of print business (high brand loyalty and significant entry barriers) and DBCL's multistate leadership, in our view, the stock deserves a higher premium to Sensex.

    DB Corp Target Price: Rs 290 Rationale: The stock is currently trading at 14.8x FY2015E consolidated EPS of Rs 16.8(at 2% premium to Sensex target multiple). However, considering the structural positives of print business (high brand loyalty and significant entry barriers) and DBCL's multistate leadership, in our view, the stock deserves a higher premium to Sensex.

  • 
	Finolex Cables

	Target Price: Rs 68

	Rationale: Positive on the company's prospects going ahead, given the strong growth in user industry, additions in product portfolio, and strategic alliance which are all expected to aid the company in posting a CAGR of 13% in the top-line over FY2013-15E to Rs 2,899 crore  in FY2015E. EBITDA is expected to post a CAGR of 11.2% to Rs 285 cr while margins are to stabilise at 9.8% in FY2014E and FY2015E.

    Finolex Cables Target Price: Rs 68 Rationale: Positive on the company's prospects going ahead, given the strong growth in user industry, additions in product portfolio, and strategic alliance which are all expected to aid the company in posting a CAGR of 13% in the top-line over FY2013-15E to Rs 2,899 crore  in FY2015E. EBITDA is expected to post a CAGR of 11.2% to Rs 285 cr while margins are to stabilise at 9.8% in FY2014E and FY2015E.

  • 
	Goodyear India

	Target Price: Rs 345

	Rationale: We expect GIL to post a marginal 2.0% CAGR in topline to Rs 1,542 crore over CY2012E-14E on account of sluggishness in auto industry. However, lower raw material prices would result in expansion of EBITDA margin by 283bp over CY2012-14E to 9% in CY2014E. Consequently, the net profit is expected to witness a 23.2% CAGR to Rs 85cr in CY2014.

    Goodyear India Target Price: Rs 345 Rationale: We expect GIL to post a marginal 2.0% CAGR in topline to Rs 1,542 crore over CY2012E-14E on account of sluggishness in auto industry. However, lower raw material prices would result in expansion of EBITDA margin by 283bp over CY2012-14E to 9% in CY2014E. Consequently, the net profit is expected to witness a 23.2% CAGR to Rs 85cr in CY2014.

  • 
	Indoco Remedies

	Target Price: Rs 89

	Rationale: With the growth drivers in place, the company's growth is likely to accelerate. The top line is expected to register a CAGR of 18.1% during FY2012-15E, mainly driven by the exports. This will aid a robust net profit growth for the company 21.2% CAGR in the net profit during the period, inspite of accounting for just a 100bps expansion in the OPM.

    Indoco Remedies Target Price: Rs 89 Rationale: With the growth drivers in place, the company's growth is likely to accelerate. The top line is expected to register a CAGR of 18.1% during FY2012-15E, mainly driven by the exports. This will aid a robust net profit growth for the company 21.2% CAGR in the net profit during the period, inspite of accounting for just a 100bps expansion in the OPM.

  • 
	ITNL

	Target Price: Rs 230

	Rationale: ITNL's outstanding order book currently stands at Rs 14,662cr (2.2x trailing revenues), which lends decent revenue visibility over the next few years. The stock trades at FY2015 PE and PB of 5.4x and 0.7x respectively. On the back healthy order book, we estimate the company to report earnings CAGR of 9.4% over FY2013-15 and a RoE of 14.2% in FY2015.

    ITNL Target Price: Rs 230 Rationale: ITNL's outstanding order book currently stands at Rs 14,662cr (2.2x trailing revenues), which lends decent revenue visibility over the next few years. The stock trades at FY2015 PE and PB of 5.4x and 0.7x respectively. On the back healthy order book, we estimate the company to report earnings CAGR of 9.4% over FY2013-15 and a RoE of 14.2% in FY2015.

  • 
	Mahindra Lifespaces

	Target Price: Rs 476

	Rationale: Positive on given it diversified geographic exposure in terms of ongoing and forthcoming real estate projects. We expect strong sales numbers over the coming quarters, following new project launches in Pune, Chennai and Mumbai, along with robust execution.

    Mahindra Lifespaces Target Price: Rs 476 Rationale: Positive on given it diversified geographic exposure in terms of ongoing and forthcoming real estate projects. We expect strong sales numbers over the coming quarters, following new project launches in Pune, Chennai and Mumbai, along with robust execution.

  • 
	Relaxo Footwear

	Target Price: Rs 791

	Rationale: The PAT is expected to grow at a CAGR of 27.7% to Rs 73cr for the same period. With the growth triggers in place, which includes - 1) capacity expansion plan, 2) store expansion, 3) improved sales mix, 4) brand revamping and 5) continuous product development.

    Relaxo Footwear Target Price: Rs 791 Rationale: The PAT is expected to grow at a CAGR of 27.7% to Rs 73cr for the same period. With the growth triggers in place, which includes - 1) capacity expansion plan, 2) store expansion, 3) improved sales mix, 4) brand revamping and 5) continuous product development.

  • 
	United Phosphorus

	Target Price: Rs 232

	Rationale: Over FY2013-15E, we expect UPL to post 12% and 14.2% CAGR in sales and PAT, respectively. For FY2014, the Management has given its guidance of a revenue growth of 12-15% and of OPM (incl. other income) expanding by 100bp. On the capital efficiency front, the company's RoCE is expected to improve from 14.9% in FY2013 to 15.8% in FY2015E, respectively.

    United Phosphorus Target Price: Rs 232 Rationale: Over FY2013-15E, we expect UPL to post 12% and 14.2% CAGR in sales and PAT, respectively. For FY2014, the Management has given its guidance of a revenue growth of 12-15% and of OPM (incl. other income) expanding by 100bp. On the capital efficiency front, the company's RoCE is expected to improve from 14.9% in FY2013 to 15.8% in FY2015E, respectively.

  • 
	Indian market is going through a volatile phase just at the fag end of the March quarter earnings. Experts say that it is best to invest in midcaps stock as they have been less volatile in the past 10 years, offered better returns and less riskier.

	So, beat the volatility with these 9 midcap stock that Angel Broking suggests you to buy.
  • 
	Bajaj Electricals

	Target Price: Rs 237

	Rationale: Consumer appliances and new product launches will fuel growth going ahead and drive the top-line at a 14.9% CAGR over FY2013-15E to Rs 4,472 crore. The EBITDA is expected to grow at 70.9% CAGR, owing to lower base. The company’s EBITDA margin to rise from 3.3% in FY2013E to 7.2% in FY2015E on the back of revival in E&P segment. A strong topline growth coupled with operating performance will aid the PAT to register a CAGR of 96.7% to Rs 197 crore over FY2013-15E.
  • 
	DB Corp

	Target Price: Rs 290

	Rationale: The stock is currently trading at 14.8x FY2015E consolidated EPS of Rs 16.8(at 2% premium to Sensex target multiple). However, considering the structural positives of print business (high brand loyalty and significant entry barriers) and DBCL's multistate leadership, in our view, the stock deserves a higher premium to Sensex.
  • 
	Finolex Cables

	Target Price: Rs 68

	Rationale: Positive on the company's prospects going ahead, given the strong growth in user industry, additions in product portfolio, and strategic alliance which are all expected to aid the company in posting a CAGR of 13% in the top-line over FY2013-15E to Rs 2,899 crore  in FY2015E. EBITDA is expected to post a CAGR of 11.2% to Rs 285 cr while margins are to stabilise at 9.8% in FY2014E and FY2015E.
  • 
	Goodyear India

	Target Price: Rs 345

	Rationale: We expect GIL to post a marginal 2.0% CAGR in topline to Rs 1,542 crore over CY2012E-14E on account of sluggishness in auto industry. However, lower raw material prices would result in expansion of EBITDA margin by 283bp over CY2012-14E to 9% in CY2014E. Consequently, the net profit is expected to witness a 23.2% CAGR to Rs 85cr in CY2014.
  • 
	Indoco Remedies

	Target Price: Rs 89

	Rationale: With the growth drivers in place, the company's growth is likely to accelerate. The top line is expected to register a CAGR of 18.1% during FY2012-15E, mainly driven by the exports. This will aid a robust net profit growth for the company 21.2% CAGR in the net profit during the period, inspite of accounting for just a 100bps expansion in the OPM.
  • 
	ITNL

	Target Price: Rs 230

	Rationale: ITNL's outstanding order book currently stands at Rs 14,662cr (2.2x trailing revenues), which lends decent revenue visibility over the next few years. The stock trades at FY2015 PE and PB of 5.4x and 0.7x respectively. On the back healthy order book, we estimate the company to report earnings CAGR of 9.4% over FY2013-15 and a RoE of 14.2% in FY2015.
  • 
	Mahindra Lifespaces

	Target Price: Rs 476

	Rationale: Positive on given it diversified geographic exposure in terms of ongoing and forthcoming real estate projects. We expect strong sales numbers over the coming quarters, following new project launches in Pune, Chennai and Mumbai, along with robust execution.
  • 
	Relaxo Footwear

	Target Price: Rs 791

	Rationale: The PAT is expected to grow at a CAGR of 27.7% to Rs 73cr for the same period. With the growth triggers in place, which includes - 1) capacity expansion plan, 2) store expansion, 3) improved sales mix, 4) brand revamping and 5) continuous product development.
  • 
	United Phosphorus

	Target Price: Rs 232

	Rationale: Over FY2013-15E, we expect UPL to post 12% and 14.2% CAGR in sales and PAT, respectively. For FY2014, the Management has given its guidance of a revenue growth of 12-15% and of OPM (incl. other income) expanding by 100bp. On the capital efficiency front, the company's RoCE is expected to improve from 14.9% in FY2013 to 15.8% in FY2015E, respectively.

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