Diwali Picks: SRF, Elecon, Sai Silks among Nirmal Bang's unique picks this Samvat
Analysts at Nirmal Bang Research like SRF, Archean Chemical Industries and Elecon Engineering, among 10 other stocks can potentially rise from current levels over the Diwali season of 2023.
SRF: Owing to the company’s diverse business segments, strong operating efficiencies with a low working capital cycle, and a broad distribution network that can drive wallet share gains, the analyst report is bullish on SRF Ltd.’s stock. The SOTP (Sum of the Parts) valuation points to a target price of 2,637 per share, implying a 21 percent upside from the current market price of Rs 2182, making this an attractive opportunity for investors.
2/10
Archean Specialty Chemicals Ltd (ACIL): The brokerage firm sees the stock arriving at a target price of Rs. 767 per share with an upside of 34 percent over the CMP of Rs 550. The upside owes to ACIL’s leading position in specialty marine chemical manufacturing, growing demand for bromine and industrial salts, expected good quarterly performance riding on demand revival in the medium term, upcoming expansion plans, rising demand for NaCl by ancillary industries, cost-effective production, and its strong financial performance over the past quarter.
3/10
Elecon Engineering: Elecon Engineering is expected to reach a target price of Rs 1050 per share as against the CMP of Rs 869, resulting in a 21 percent upside. Nirmal Bang predicts this due to the company’s leadership in the industrial gear market, strong growth prospects in sectors like cement and steel, a turnaround in the material handling equipment segment, and expectations of robust demand, resulting in an expected 25 percent CAGR in revenue and 32 percent CAGR in profits from FY23 to FY25, with an anticipated improvement in return on capital employed (ROCE).
4/10
Five Star Business Finance: Nirmal Bang signalled a buy rating on the stock with a target price of Rs 1100, up 49 percent as against the CMP of Rs 740. Analysts are bullish on the stock due to the company’s focus on providing secured business loans within a challenging segment with an average loan size of less than Rs. 5 Lakhs. Over FY23–25E, a 30 percent CAGR is anticipated due to Five Star's vast experience, strong return measures, rapid earnings growth, and cognizant financial management.
Fusion Micro Finance: Owing to its status as India's 2nd largest NBFC-MFI, analysts see a 36 percent upside in the Fusion Micro Finance stock with a target price of Rs 820 with only a 30 percent discount to its competitor CreditAccess. The stock has reported strong assets under management (AUM) growth, excellent underwriting quality with lower GNPA levels than the industry and is expected to deliver industry-leading returns on assets (ROA) and equity (ROE) of 4.8 percent and 22 percent respectively in FY25E along with promising corporate governance practices.
6/10
Sai Silk (Kalamandir) Ltd.: The stock has received a 'Buy' recommendation with a target price of Rs. 323, or 15x EV/EBITDA on FY25 EBITDA with a 37 percent upside from its CMP of Rs 236. According to the Nirmal Bang analyst research, the Sai Silk stock is expected to rise because of its robust market share in the expanding saree market in South India, variety of store formats, planned development, and strengthened financials. With an emphasis on the growing demand in the area for ethnic clothing, particularly sarees, the company is deemed attractive at an EV/EBITDA of 10.7x FY25E EBITDA.
7/10
Sanghvi Movers Ltd.: Nirmal Bang sees an 18 percent upside with the target price of Rs 864 for the SML stock due to its leading position in the crane rental industry, significant growth potential in the windmill sector driven by government initiatives and the revival of wind farm capex, diversification into EPC work, improving capacity utilization and yield, and favourable industry tailwinds. The company's strong outlook suggests a growth trajectory, making it an attractive investment according to analysts.
8/10
Venus Pipes & Tubes: Nirmal Bang sees a 34 percent upside in Venus's stock with a target price of Rs 1830 per share, valuing the company at 25x Sep 2025E earnings. This comes as Venus Pipes and Tubes is the only “pure-play” listed player in the high-value stainless steel pipe industry that has displayed strong growth potential. This growth is driven by capacity expansion, backward integration into manufacture of hollow pipes, favourable transition to direct sales, and their entry into the larger diameter pipes segment. These factors contribute to a Sales/PAT CAGR of 50 percent/78 percent over FY23-25E for the company, thus posing attractive opportunities for investors.
Vishnu Chemicals Ltd (VCL): Vishnu Chemicals Ltd (VCL) receives a target price expectation of Rs. 421 per share, which is 30 percent higher than the current market price of Rs 325 based on the Nirmal Bang analyst report. This optimistic prediction is fuelled by VCL's leading position in the production of barium compounds and chromium chemicals, strong gross margins due to backward integration, a commitment towards product innovation, and the launch of "precipitated barium sulphate," which is aimed at expanding the company's market. The company's anticipated capacity expansion also provides an additional backing for the presumption of a robust and consistent growth in its sales and profit.
10/10
Vishnu Prakash R Punglia (VPRP): The Nirmal Bang report gives a ‘Buy’ rating for the VPRP stock with a target price of Rs. 262 per share, up 41 percent from the CMP of Rs 186. The target price represents a 10 percent premium to that of its other listed peers. This rating comes as VPRP reported a strong revenue growth, with an impressive CAGR of ~50 percent over FY21-23, along with the company’s niche focus on Water Supply Projects in the vast Total Addressable Market (TAM) with valuation of over Rs. 6 Lac Cr.
