Moneycontrol
Get App
Last Updated : May 11, 2020 03:16 PM IST | Source: Moneycontrol.com

Slideshow | Angel Broking picks 17 stocks that can return up to 32%

Here are the 17 portfolio stock ideas from Angel Broking that can return 12-32 percent upside.

Representative Image
1/18

Here are the 17 portfolio stock ideas from Angel Broking that can return 12-32 percent upside.

DMart
2/18

Avenue Supermarts | Company is focused on value retailing. The company has 196 D-MART stores and it expects to open 30 stores every year through its cluster approach. Operating margin is higher compared to its peers due to the company’s low cost structure. The broking firm expects D-MART to report consolidated revenue/PAT CAGR of 18/26 percent, respectively over FY2019-22E. Upside: 24%

Hawkins Cookers | Company operates in two segments i.e. pressure cookers and cookware. Over the last two years, the company has outperformed TTK Prestige in terms of sales growth ~13% against ~4% in cookers and cookware segment. Cooking gas (LPG) penetration has increased from 56% in FY2014 to 80% in FY2019. Angel Broking expects HCL’s margins to improve 80-100bps on the back of falling raw material prices and also because the company had already taken a price hike previously. Upside: 25%
3/18

Hawkins Cookers | Company operates in two segments i.e. pressure cookers and cookware. Over the last two years, the company has outperformed TTK Prestige in terms of sales growth ~13% against ~4% in cookers and cookware segment. Cooking gas (LPG) penetration has increased from 56% in FY2014 to 80% in FY2019. Angel Broking expects HCL’s margins to improve 80-100bps on the back of falling raw material prices and also because the company had already taken a price hike previously. Upside: 25%

Bharti Airtel | Angel Broking expects some impact on subscribers from the low-income group especially daily wage earners due to the lockdown. However, a sharp increase in data consumption should make up for a significant portion of the loss. It expects limited impact on Bharti from the lockdown. The company is much better placed as compared to Vodafone Idea in terms of liquidity. Telecom operators have increased tariffs by 35% in November 2019. There is a possibility of another round of tariff hikes by telecom companies in FY21 given that tariffs are still very low. Bharti Airtel would benefit significantly from the addition of subscribers. Upside: 12%
4/18

Bharti Airtel | Angel Broking expects some impact on subscribers from the low-income group especially daily wage earners due to the lockdown. However, a sharp increase in data consumption should make up for a significant portion of the loss. It expects limited impact on Bharti from the lockdown. The company is much better placed as compared to Vodafone Idea in terms of liquidity. Telecom operators have increased tariffs by 35% in November 2019. There is a possibility of another round of tariff hikes by telecom companies in FY21 given that tariffs are still very low. Bharti Airtel would benefit significantly from the addition of subscribers. Upside: 12%

Bata India | The Indian footwear industry is expected to grow at a CAGR of 15% going ahead. Two third of the industry is mainly dominated by the unorganized sector which suggests there is a huge untapped opportunity. Strong retail stores expansion plan to boost growth (500 stores for next 5 years). Currently, women’s footwear segment accounts for 30-35% of Bata sales, which the company is targeting to increase to 40% over 3 years. The stock has corrected significantly from the peak, providing a good buying opportunity. Upside: 23%
5/18

Bata India | The Indian footwear industry is expected to grow at a CAGR of 15% going ahead. Two third of the industry is mainly dominated by the unorganized sector which suggests there is a huge untapped opportunity. Strong retail stores expansion plan to boost growth (500 stores for next 5 years). Currently, women’s footwear segment accounts for 30-35% of Bata sales, which the company is targeting to increase to 40% over 3 years. The stock has corrected significantly from the peak, providing a good buying opportunity. Upside: 23%

PI Industries | The company is a leading player in providing custom synthesis and manufacturing solutions (CSM) to global agrochemical players. The CSM business accounted for 66% of the company’s revenues in FY19 and is expected to be the key growth driver for the company in future. The company has been increasing its share of high margin CSM business driven by a strong relationship with global agrochemical players. Though the company’s operations have been impacted due to the COVID-19 outbreak, Angel Broking expects that PI Industries would be amongst the least impacted in the sector given that the company is a pure-play agrochemical player which are part of essential commodities. Upside: 16%
6/18

PI Industries | The company is a leading player in providing custom synthesis and manufacturing solutions (CSM) to global agrochemical players. The CSM business accounted for 66% of the company’s revenues in FY19 and is expected to be the key growth driver for the company in future. The company has been increasing its share of high margin CSM business driven by a strong relationship with global agrochemical players. Though the company’s operations have been impacted due to the COVID-19 outbreak, Angel Broking expects that PI Industries would be amongst the least impacted in the sector given that the company is a pure-play agrochemical player which are part of essential commodities. Upside: 16%

Colgate-Palmolive
7/18

Colgate Palmolive India | The company has a leads in both toothpastes (52% market share) and toothbrushes (45% market share). It has increased its distribution 2.3x over the last 6-7 years and is continuously making efforts to deepen its penetration. The broking firm believes that Colgate should ultimately be able to see sharper market share gain in toothpaste segment on the back of higher ad-spend and re-launch of Colgate Strong Teeth (decent traction seen in last quarter). Upside: 32%

Nestle India | The company enjoys a market leadership position in 85% of its portfolio. Nestle has a wide distribution network (4.6mn outlets) across India and strong brand recall. Strong balance sheet coupled with free cash flow and higher profitability. Going forward, Angel Broking expects healthy growth and profitability on the back of strong brand, wide distribution network and new product launches. Upside: 19%
8/18

Nestle India | The company enjoys a market leadership position in 85% of its portfolio. Nestle has a wide distribution network (4.6mn outlets) across India and strong brand recall. Strong balance sheet coupled with free cash flow and higher profitability. Going forward, Angel Broking expects healthy growth and profitability on the back of strong brand, wide distribution network and new product launches. Upside: 19%

Galaxy Surfactants | The company has been increasing its share of high margin speciality care products in its portfolio which now accounts for 40% of its revenues while the balance is accounted for by the performance surfactant business. It has a very strong relationship with MNC clients like Unilever, P&G, Henkel, Colgate-Palmolive and supplies raw materials to them not only in India but also in the US, EU and MENA region. Though the company’s operations have been impacted due to the COVID-19 outbreak, Angel Broking expects that Galaxy Surfactants would be amongst the least impacted in the sector given the company’s exposure to the personal and home care segment. Upside: 18%
9/18

Galaxy Surfactants | The company has been increasing its share of high margin speciality care products in its portfolio which now accounts for 40% of its revenues while the balance is accounted for by the performance surfactant business. It has a very strong relationship with MNC clients like Unilever, P&G, Henkel, Colgate-Palmolive and supplies raw materials to them not only in India but also in the US, EU and MENA region. Though the company’s operations have been impacted due to the COVID-19 outbreak, Angel Broking expects that Galaxy Surfactants would be amongst the least impacted in the sector given the company’s exposure to the personal and home care segment. Upside: 18%

IPCA
10/18

IPCA Labs | Company is expected to outperform the Indian Pharmaceutical market (IPM) by 8%-10% p.a in FY 22. EU generic & branded which account for 15% of the company’s revenues are on growth trajectory along with higher margins (40% EBITDA margins). Current capacity utilization of plants which supply to Europe is at 20% which is expected to ramp up from current levels. The broking firm expects the European business to show 30-35% PAT growth. Ipca manufacture over 350 formulations and 80 APIs for various therapeutic segments like Pain management. Currently, the company has 18 ANDA approvals, 46 ANDA filled with authorities while 8 products are in clinical trials. Upside: 20%

Britannia1
11/18

Britannia Industries | Company has brands like Tiger, Good-Day, and 50:50 under its fold with an estimated market share of 33% in the Indian biscuits industry. Biscuits contribute more than 80% of the company’s turnover. It has an overall distribution reach of 5.5 million outlets. With a consistent focus on distribution expansion, It has narrowed the gap. The gap with the largest distributed brand is now just 0.8 million outlets, which it expects to bridge soon and thereby, become the largest player over the medium to long term. Upside: 19%

Alkem labs | Company's 67% of revenue comes from domestic generic and API business. Antiinfective and Chronic business continues to provide revenue growth for Alkem. It is expected to outperform the Indian pharmaceutical market (IPM) by 1.5x growth rate for the next 2 years. Company has incurred large capex in infrastructure and MR team in the last couple of years, which will give organic growth to Alkem. At present the company has 11400 MRs with the productivity of 45lakhs PA. New product launches and volume growth will help US business to grow by 15% p.a for next couple of years. Currently, Alkem has 81 approved ANDA out of which 40 yet to be commercialised. Upside: 23%
12/18

Alkem labs | Company's 67% of revenue comes from domestic generic and API business. Antiinfective and Chronic business continues to provide revenue growth for Alkem. It is expected to outperform the Indian pharmaceutical market (IPM) by 1.5x growth rate for the next 2 years. Company has incurred large capex in infrastructure and MR team in the last couple of years, which will give organic growth to Alkem. At present the company has 11400 MRs with the productivity of 45lakhs PA. New product launches and volume growth will help US business to grow by 15% p.a for next couple of years. Currently, Alkem has 81 approved ANDA out of which 40 yet to be commercialised. Upside: 23%

Infosys (Image: Reuters)
13/18

Infosys | Company under the new management of Salil Parekh has become aggressive in terms of signing new deals, which is expected to drive growth for the company. New deal wins has clearly accelerated with the company winning deals worth USD 6.3 billion and USD 9.0 billion in FY19 & FY20 respectively as against deal wins of USD 3.1 billion in FY18. The broking firm expects the company to post revenue/EBITDA/PAT growth of 7.5/3.7/5.1% between FY19-FY22 despite COVID-19 outbreak affecting FY21 numbers. Rupee depreciation from ~71 levels to ~76 to the US dollar will have a positive impact on top line and bottom-line and will mitigate the adverse impact due to COVID-19 outbreak to a large extent. Upside: 24%

Aarti Industries | Company accounts for 20% of world’s Nitrochloro Benzene (NCB) and 10% of dichloride benzene (DCB) capacity. It has been constantly increasing it’s share of high margin downstream products which now accounts for 70% of the company’s revenues. Company is expanding it’s NCB capacity which would be utilized for manufacture of high margins downstream products. Exports account for 40% of revenues while balance 60% is from domestic sales. Significant opportunity for company arising from environmental related issues in China and companies looking to diversify supply chains. Upside: 13%
14/18

Aarti Industries | Company accounts for 20% of world’s Nitrochloro Benzene (NCB) and 10% of dichloride benzene (DCB) capacity. It has been constantly increasing it’s share of high margin downstream products which now accounts for 70% of the company’s revenues. Company is expanding it’s NCB capacity which would be utilized for manufacture of high margins downstream products. Exports account for 40% of revenues while balance 60% is from domestic sales. Significant opportunity for company arising from environmental related issues in China and companies looking to diversify supply chains. Upside: 13%

P&G
15/18

Proctor & Gamble | Company distributes and markets three major brands in India – Whisper (sanitary napkins), Vicks (balm, cough drops and tablets), and Old Spice (aftershave lotion and deodorants). Whisper being market leader with market share of 56% in Sanitary pad segment contributes ~69% of total revenue. Sanitary Pads having less than20% market penetration leaves immense growth opportunity for Whisper. Going forward, the broking firm expects healthy growth and profitability on the back of strong brand, wide distribution network and new product launches. Upside: 21%

Reliance Industries | Company has built up a dominant telecom business and has already attained market leader status with 38.5 crore subscribers at the end of Q3FY20. Telecom business to witness robust growth over the next few years due to tariff hikes and shift of subscribers from Vodafone Idea to other telecom players. RIL has also built a very strong retail business which is the largest organized retailing company in India. Angel Broking expects the retail business to be a key value driver for Reliance over the long run though there would be some impact on business in FY21 due to the COVID-19 outbreak. Refining and petrochemicals business would be a stable low growth business for RIL going forward but will be a major cash generator for the company as there will be negligible capex requirements. The cash flows would be used to fund expansion into other businesses. Upside: 11%  Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd
16/18

Reliance Industries | Company has built up a dominant telecom business and has already attained market leader status with 38.5 crore subscribers at the end of Q3FY20. Telecom business to witness robust growth over the next few years due to tariff hikes and shift of subscribers from Vodafone Idea to other telecom players. RIL has also built a very strong retail business which is the largest organized retailing company in India. Angel Broking expects the retail business to be a key value driver for Reliance over the long run though there would be some impact on business in FY21 due to the COVID-19 outbreak. Refining and petrochemicals business would be a stable low growth business for RIL going forward but will be a major cash generator for the company as there will be negligible capex requirements. The cash flows would be used to fund expansion into other businesses. Upside: 11% Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd

Dhanuka Agritech | Company has an asset-light business model with a clear focus on marketing and creating brands. It has international collaboration with the world’s nine leading agrochemical companies to introduce the latest technology. Company has better return ratios, working capital cycle and cash flow compared to its peers. We are positive on the long term prospects of the company owing to high industry growth rate, management capability and wide & diversified product portfolio as well as reach. Upside: 20%
17/18

Dhanuka Agritech | Company has an asset-light business model with a clear focus on marketing and creating brands. It has international collaboration with the world’s nine leading agrochemical companies to introduce the latest technology. Company has better return ratios, working capital cycle and cash flow compared to its peers. We are positive on the long term prospects of the company owing to high industry growth rate, management capability and wide & diversified product portfolio as well as reach. Upside: 20%

L&T Infotech | Company is part of the L&T group and provides services like ADM, Enterprise solutions, Infrastructure management services etc. It has a very strong presence to the BFSI & manufacturing verticals, which accounts for ~45% and 17.5% of the company’s revenues and are amongst the least impacted vertical due to the shutdown on account of COVID-19. The company doesn't have a very large exposure to service-oriented verticals like travel & Tourism which are amongst the worst impacted due to the COVID-19 outbreak. It has been growing significantly faster than both mid and large cap peers have over the past few years on the back of strong deal wins. Angel Broking expects the outperformance to continue for the company. Upside: 18%
18/18

L&T Infotech | Company is part of the L&T group and provides services like ADM, Enterprise solutions, Infrastructure management services etc. It has a very strong presence to the BFSI & manufacturing verticals, which accounts for ~45% and 17.5% of the company’s revenues and are amongst the least impacted vertical due to the shutdown on account of COVID-19. The company doesn't have a very large exposure to service-oriented verticals like travel & Tourism which are amongst the worst impacted due to the COVID-19 outbreak. It has been growing significantly faster than both mid and large cap peers have over the past few years on the back of strong deal wins. Angel Broking expects the outperformance to continue for the company. Upside: 18%

First Published on May 11, 2020 03:16 pm
Sections
Follow us on