11 sizzling stocks that can double your wealth in 3 years: DAM Capital

11 stocks that can potentially double your wealth in 3 years

The Indian equity markets have been resilient so far this year, with benchmark indices - the S&P BSE Sensex and Nifty50 rising as much as 8 percent.

Broader markets, too, have remained on a strong footing as the BSE Midcap and BSE Smallcap indices surged up to 28 percent during the same period.

Against this backdrop, analysts at DAM Capital listed down 11 stocks that they peg can potentially double from current levels over the span of 3 years (selected on basis of their Ebitda). Here’s a compilation:

KEC International | Current market price (CMP): Rs 664 per share

Rationale: The transmission and distribution (T&D) business will gain traction over the next few years on strong domestic tender pipeline and international enquiries from Middle East and SAARC. That apart, receding competition in railways and sustained momentum in civil, the traction is likely to drive earnings, which is 39 percent compounded annual growth rate (CAGR) over FY23-25E.

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Trent (India) | CMP: Rs 2,084 per share

Rationale: The company is India’s leading retailer with powerful brands like Westside, Zudio, Star, and joint venture with global brand Zara in its portfolio. The current store count for Westside stands at 221, while 338 exclusive brand outlets for Zudio. Analysts expect Westside store count to expand to around 310 stores by FY26, with growth at 12 percent CAGR over FY24-26E. For Zudio, they expect stores to grow around 900 by FY26, with 32 percent of CAGR.

Escorts Kubota | CMP: Rs 3,186 per share

Rationale: The synergy benefit from Kubota in terms of operations, markets, cost management, product development is likely to take Escorts to a new landscape in the next decade, said analysts. Moreover, they believe that the Kubota's synergy would bring market shares to the tune of 150-200 basis points (bps) over the next 4-5 years.

Bharat Forge | CMP: Rs 1,092 per share

Rationale: Analysts believe that the healthy order book of Rs 3,000 crore in exports and focus on non-auto will drive export revenues. The government’s indigenisation initiatives and focus on launches defence products, too, is likely to provide ample defence opportunity for the company over the next decade.

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Astral Pipes | CMP: Rs 1,915 per share

Rationale: The company’s valuations of 71x/51x FY24/25E, proven mettle of ground-level execution, and clean corporate governance makes the company a must-have for all long term portfolios. Analysts expect free cash-flow (FCF) generation of Rs 1,400 crore over FY24-25E for the company.

TVS Motor | CMP: Rs 1,525 per share

Rationale: Analysts forecast that a healthy double-digit growth in exports would be a key structural story for the company in the next decade and would also act as a single biggest catalyst for earnings upgrade and a further re-rating.

IDFC First Bank | CMP: Rs 95 per share

Rationale: The private sector bank is seeing cost metrics improving, with return of equity (RoE) at 12 percent in Q1FY24. This, analysts believe, would further improve to 13.5 percent by FY25E on the back of strong CAGR growth in retail loans, granular liability franchise, and tailwinds from favourable asset quality cycle.

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IndiaMART IndiaMesh | CMP: Rs 2,877 per share

Rationale: The strong fundamental growth in operations will be driven by high growth in digitisation among SMEs, strong network effect, and ability to increase average revenue per user (ARPU) on account of low price sensitivity. The company’s continued focus on buybacks and dividends has also given a consistency to capital allocation, unlike other platform companies.

Havells India | CMP: Rs 1,388 per share

Rationale: The macro trends and innovation is likely to drive gains in fans, appliances and lighting, while real estate up-cycle and increase in capex and exports are key growth drivers for cables and switchgears for the next few years. With strong balance sheet (~Rs 2,700 crore cash on books as on Q1FY24), Havells is well positioned to absorb input cost volatility and SCM disruptions.

Uno Minda | CMP: Rs 601 per share

Rationale: The company’s focus on EV-specific products and revenue target of Rs 1,500 from EVs over the next 2-3 years are expected to strongly boost overall growth. Analysts expect strong industry outperformance and higher earnings CAGR would expand valuation over the next 3-5 years.

M&M Financial Services | CMP: Rs 301 per share

Rationale: With expected uptick in return ratios from ~2 percent in FY24E to ~2.3 percent in FY25E and~2.5 percent in FY26E, analysts ruled out case of PE derating in our base case. The RoEs should converge to ~18-20 percent by FY26-FY27.

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