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Last Updated : Sep 25, 2020 09:42 AM IST | Source: Moneycontrol.com

Slideshow | Brokerages bets on these 6 stocks for up to 80% upside

Manappuram Finance, Britannia Industries on brokerages' radar

Sensex

The selling continued on the six consecutive day on the Dalal Street on the back of weak global cues. The Sensex shed 1,114.82 points or 2.96 percent to end at 36553.60, while Nifty fell 326.40 points or 2.93 percent to finish at 10805.50.

 Result: The acquisition turned profitable from the second year with revenue from the acquired business increasing by over 12 percent CAGR over FY15-17. Natrol continues to be a stable growth contributor for Aurobindo’s OTC franchise. (Image: Reuters)

Aurobindo Pharma | Brokerage: Sharekhan | Rating: Buy | LTP: Rs 743 | Target: Rs 975 | Upside: 31 percent. The company has a higher exposure (around 80%) to the regulated markets of US and Europe. Strong traction in the US and gradual pick up in the other geographies would support topline growth, while steady margin improvement would result in double-digit earnings growth. Aurobindo’s sales and PAT are expected to report 9.2% and 11.5% CAGR, respectively, over FY2020-FY2023. The stock price has corrected by around 16% in a little over one month. This would provide a good entry point for investors.

Source: Twitter

JBM Auto | Brokerage: Dolat Capital | Rating: Buy | LTP: Rs 207 | Target: Rs 373 | Upside: 80 percent. Due to lockdown and negative operating leverage operating profit turned negative to Rs 79 mn (versus estimate loss of Rs 72 mn). The management expects a sharp recovery in earrings from 2QFY21 onwards led by a recovery in PV volume and strong order book in bus division. The stock is currently available at 12/9x for FY22/23E.

Tech Mahindra | Brokerage: Sharekhan | Rating: | LTP: Rs | Target: Rs 910 | Upside: percent. Broking house upgraded its earnings estimates for FY2021E because of anticipated better than-earlier margin expansion in Q2FY2020 due to continued lower travel and admin expenses, while broadly maintain earnings estimates for FY2022E and FY2023E. The company is well placed to benefit from the expansion of 5G value chain across networks and IT services, when pick up in investments by CSPs and higher 5G adoption by enterprise would happen.

Tech Mahindra | Brokerage: Sharekhan | Rating: | LTP: Rs 748 | Target: Rs 910 | Upside: 21 percent. Broking house upgraded its earnings estimates for FY2021E because of anticipated better than-earlier margin expansion in Q2 FY2020 due to continued lower travel and admin expenses, while broadly maintain earnings estimates for FY2022E and FY2023E. The company is well placed to benefit from the expansion of 5G value chain across networks and IT services when pick up in investments by CSPs and higher 5G adoption by enterprise would happen.

Britannia Industries | Brokerage: Emkay | Rating: Buy | LTP: Rs | Target: Rs 4,500 | Upside: percent. Post the recent correction, stock now trades at 40x FY22E EPS, which appears attractive given strong volume trends and margin gains. High dividend payout is likely to have a marginal impact on Emkay's FY21-23 estimates. It forecast 20% earnings CAGR over FY20-23E. The stock still offers the best growth and earnings outlook in staples, and remains its preferred pick.

Britannia Industries | Brokerage: Emkay | Rating: Buy | LTP: Rs 3,613| Target: Rs 4,500 | Upside: 24 percent. Post the recent correction, the stock now trades at 40x FY22E EPS, which appears attractive given strong volume trends and margin gains. High dividend payout is likely to have a marginal impact on Emkay's FY21-23 estimates. It forecast 20% earnings CAGR over FY20-23E. The stock still offers the best growth and earnings outlook in staples and remains its preferred pick.

Muthoot Finance | Brokerage: Motilal Oswal | Rating: Buy | LTP: Rs | Target: Rs 1,300 | Upside: percent. Gold financiers, led by their strong performance, have outperformed their NBFC peers over the past 1-2 years. This is expected to continue in the near-to-medium term with low asset quality risk, high return ratios and tailwinds to growth. Motilal Oswal expect company to generate 6.8%/5.4% RoA and 25%/24% RoE over the medium term.

Muthoot Finance | Brokerage: Motilal Oswal | Rating: Buy | LTP: Rs 1,017 | Target: Rs 1,300 | Upside: 28 percent. Gold financiers, led by their strong performance, have outperformed their NBFC peers over the past 1-2 years. This is expected to continue in the near-to-medium term with low asset quality risk, high return ratios and tailwinds to growth. Motilal Oswal expect the company to generate 6.8%/5.4% RoA and 25%/24% RoE over the medium term.

Manappuram Finance | Brokerage: Motilal Oswal | Rating: Buy | LTP: Rs | Target: Rs 185 | Upside: percent. Motilal Oswal initiating coverage on Manappuram Finance with a buy rating and target of Rs 185 (1.8x FY22E BVPS). Motilal's lower multiple for company is on account of lower average RoA of 5.4% (v/s 6.8% for MUTH), and higher share of its business coming from non-gold lending at 33% (v/s 11% for MUTH in FY20), which is facing headwinds due to the pandemic.

Manappuram Finance | Brokerage: Motilal Oswal | Rating: Buy | LTP: Rs 141 | Target: Rs 185 | Upside: 31 percent. Motilal Oswal initiating coverage on Manappuram Finance with a buy rating and target of Rs 185 (1.8x FY22E BVPS). Motilal's lower multiple for the company is on account of lower average RoA of 5.4% (v/s 6.8% for MUTH), and a higher share of its business coming from non-gold lending at 33% (v/s 11% for MUTH in FY20), which is facing headwinds due to the pandemic.

First Published on Sep 25, 2020 09:42 am
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