Market is trading in range but falling crude oil prices and appreciating rupee are helping the market to trade on the positive side
After ending the rangebound truncated week (November 19 to 22) in the negative, the market witnessed a recovery on November 26 with Sensex gaining 370 points, while Nifty50 closing well above 10,600.
Falling crude oil prices and appreciating rupee are the two major factors that are helping the market to trade on the positive side. While the ongoing elections in five states are adding to the volatility in the market.
Crude oil prices have erased all its gains for this year. Also, rupee has recovered from an all-time low of 74.48.
Here is a list of seven picks from the brokerage houses which could give 7-75 percent return in next 6-18 months:
Aarti Drugs | Brokerage: Anand Rathi | Rating: Buy | Target: Rs 745 | Return: 36 percent
Anand Rathi retained buy rating on the stock with a target of Rs 745 per share. It feels that the product launches, expanded capacity and market-share gains in its products, company's revenue and PAT would clock 14 percent and 21 percent CAGRs over FY18-21.
During H1FY19, disruptions to the supply of a few key raw materials and a change in processes led to production shortages in the API division.
Jamna Auto Industries | Brokerage: Stewart & Mackertich | Rating: Buy | Target: Rs 128 | Return: 75 percent
Research house believes company's focus on bringing technologically advanced products and solutions through its in-house R&D and technical collaboration with global leaders should help the company to increase its market share in the OEM space and to make inroads in the Passenger Vehicle segment.
It expects the EPS of the company to grow at a CAGR of 19 percent from FY18 to Rs 6.40 by FY21E and accordingly it assigns a PE of 20 to FY21E EPS, to arrive at a target price of Rs 128.
Astral Poly Technik | Brokerage: East India Securities | Rating: Accumulate | Target: Rs 1,184 | Return: 12.5 percent
The acquisition and integration of RPL will further add value along with strengthening polymer product portfolio with single/double corrugated pipes. The company has a strong product pipeline in both segments which will further aid revenue growth in coming years.
The company has undertaken a price hike of 3-4 percent in CPVC pipes in September 2018.
The company management has guided 15 percent overall growth in the business for FY20 while the adhesive business is expected to grow at a higher rate of 20 percent for FY19.
Marico | Brokerage: ICICIDirect | Rating: Buy | Target: Rs 410 | Return: 16 percent
ICICIDirect believes that company is a major beneficiary of GST implementation with the highly unorganised edible oil market providing the company huge opportunity to grow.
It expects Marico to report healthy revenue and PAT CAGR of 16.6 percent and 22.5 percent, receptively, in FY18-20E and estimate 9 percent volume CAGR for both hair oil and edible oil categories.
Himadri Speciality | Brokerage: ICICIDirect | Rating: Buy | Target: Rs 160 | Return: 16 percent
ICICIDirect has maintained a buy rating on the stock with a target of Rs 160 per share. Going forward, robust topline growth is expected to lead to 23.4 percent CAGR in PAT in FY18-20E.
It expects the company to report PAT of Rs 292.4 crore in FY19E versus Rs 242.6 in FY18 and net sales of Rs 2,903 crore in FY20E versus Rs 1,971 crore expected in FY18.
Simplex Infrastructure | Brokerage: ICICIDirect | Rating: Hold | Target: Rs 230 | Return: 7 percent
Brokerage house maintained a hold rating on the stock with a target price of Rs 230 per share.
Its topline grew 18.7 percent YoY to Rs 1,479.1 crore possibly on account of good execution in Q2FY19, while PAT fell 12 percent YoY to Rs 24.4 crore mainly on lower-than-expected other income.
Despite order inflows being subdued in H1FY19, the management is confident of achieving order inflows worth Rs 7,000-8,000 crore in FY19E.
Shaily Engineering Plastics | Brokerage: ICICIDirect | Rating: Buy | Target: Rs 1,120 | Return: 25 percent
The company expects to achieve 2.3x turnover with incremental capex of Rs 90 crore (FY19E-20E) supported by an increase in utilisation of pharma packaging (led by CRC products) and furniture segment.
ICICIDirect believes rising plant utilisation level would provide high operating leverage to the company thereby maintain EBITDA margin at elevated levels.Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.