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Slideshow | L&T, Cholamandalam Investment, BPCL Among 10 Stocks With Expected 50% Return

Here are the 10 stocks in which brokerages are expecting upto 50 percent upside. The LTP is June 9 closing price.

Jun 10, 2020 / 08:40 AM IST
On June 9 the Indian indices ended lower on the back of profit booking witnessed which dragged the Nifty50 below 10,100 and Sensex below 34,000. Here are the 10 stocks in which brokerages are expecting upto 50 percent upside:
On June 9, the Indian indices ended lower on the back of profit booking which dragged the Nifty50 below 10,100 and Sensex below 34,000. Here are the 10 stocks in which brokerages are expecting upto 50 percent upside:
Jyothy Laboratories | Brokerage: Sharekhan | Rating: Buy | LTP: Rs 117 | Target: Rs 140 | Upside: 19 percent. Sharekhan reduced earnings estimates for FY2021 and FY2022 to factor in the dismal performance in Q4 and muted performance in the fabric care space. It expect FY2021 to be a low growth year but expect earnings growth to recover to double-digits in FY2022. The stock has corrected by 29% in past six months and trades at a discounted valuation of 20.8x its FY2022E earnings factoring the near term uncertainties.
Jyothy Laboratories | Brokerage: Sharekhan | Rating: Buy | LTP: Rs 117 | Target: Rs 140 | Upside: 19 percent. Sharekhan has reduced earnings estimates for FY2021 and FY2022 to factor in the dismal performance in Q4 and muted performance in the fabric care space. It expects FY2021 to be a low growth year but expects earnings growth to recover to double-digits in FY2022. The stock has corrected by 29 percent in the past six months and trades at a discounted valuation of 20.8x its FY2022E earnings factoring the near term uncertainties.
L&T | Brokerage: Prabhudas Lilladher | Rating: Buy | LTP: Rs 953 | Target: Rs 1,192 | Upside: 25 percent. Prabhudas Lilladher expect L&T to face near-term challenges on account of pandemic and working capital stress but believe them to bounce back owing to multiple levers like strong business model, diversified order book and healthy balance sheet. The company continues to focus on its strategic plan of improving their return ratios. At CMP, the stock is currently trading at 19.5x/15.3x FY20E/FY21E.
L&T | Brokerage: Prabhudas Lilladher | Rating: Buy | LTP: Rs 953 | Target: Rs 1,192 | Upside: 25 percent. Prabhudas Lilladher expects L&T to face near-term challenges on account of pandemic and working capital stress but believes them to bounce back owing to multiple levers like a strong business model, diversified order book and healthy balance sheet. The company continues to focus on its strategic plan of improving their return ratios. At CMP, the stock is currently trading at 19.5x/15.3x FY20E/FY21E.
SRF | Brokerage: Dolat Capital | Rating: Buy | LTP: Rs 3,652 | Target: Rs 4,318 | Upside: 18 percent. Company's strong capex plans and focus on growing specialty chemicals business are expected to be RoCE accretive at full capacity utilisations. Dolat Capital like SRF’s moat in fluorination and ability to scale up its growth engines.
SRF | Brokerage: Dolat Capital | Rating: Buy | LTP: Rs 3,652 | Target: Rs 4,318 | Upside: 18 percent. The company's strong capex plans and focus on growing specialty chemicals business are expected to be RoCE accretive at full capacity utilisations. Dolat Capital like SRF’s moat in fluorination and ability to scale up its growth engines.
Aurobindo Pharma | Brokerage: KRChoksey | Rating: Buy | LTP: Rs 772 | Target: Rs 894 | Upside: 15 percent. KRChoksey expect Aurobindo pharma to post a CAGR growth of 12.1%/15.8% in Revenue/PAT over FY20-22E on the back of new launches in the US, increasing contribution from newly acquired businesses & territories in the EU. Debt reduction to help improve profitability with lower finance cost.
Aurobindo Pharma | Brokerage: KRChoksey | Rating: Buy | LTP: Rs 772 | Target: Rs 894 | Upside: 15 percent. KRChoksey expects Aurobindo Pharma to post a CAGR growth of 12.1 percent and 15.8 percent in Revenue/PAT over FY20-22E on the back of new launches in the US, increasing contribution from newly acquired businesses & territories in the EU. Debt reduction to help improve profitability with lower finance cost.
BPCL
BPCL | Brokerage: Emkay | Rating: Buy | LTP: Rs 381 | Target: Rs 480 | Upside: 26 percent. Emkay cut FY21/22E EPS by 31%/4% assuming COVID-19 impact on GRMs and volumes for FY21, coupled with higher below-the-line items. It cut target price by 16 percent to Rs 480 (lowering investment value also) but retained buy rating and equal weight stance on sector EAP.
Granules India | Brokerage: KRChoksey | Rating: Buy | LTP: Rs 181 | Target: Rs 229 | Upside: 26 percent. KRChoksey expect Granules India to post revenue growth of 15.7%/15.5% in FY21E/FY22E on the back of new product launches in the US from company’s US subsidiary and rising contribution from Finished Dosage forms (FD) with company’s focus on higher value and higher margin business segments of FD. It expect EBITDA margin improvement in the range of 20%-23% over FY21/22 for Granules India.
Granules India | Brokerage: KRChoksey | Rating: Buy | LTP: Rs 181 | Target: Rs 229 | Upside: 26 percent. KRChoksey expect Granules India to post revenue growth of 15.7 percent and 15.5 percent in FY21E/FY22E on the back of new product launches in the US from company’s US subsidiary and rising contribution from Finished Dosage forms (FD) with company’s focus on higher value and higher margin business segments of FD. It expect EBITDA margin improvement in the range of 20-23 percent over FY21/22 for Granules India.
Cholamandalam Investment & Finance | Brokerage: HDFC Securities | Rating: Buy | LTP: Rs 150 | Target: Rs 225 | Upside: 50 percent. HDFC Securities lowered its earnings to factor in higher provisions, given that 76% of the book is under moratorium, and slower growth. Nevertheless, the company remains a top NBFC pick, given its strong liquidity and funding profile, superior historical asset quality trends and diversified portfolio.
Cholamandalam Investment & Finance | Brokerage: HDFC Securities | Rating: Buy | LTP: Rs 150 | Target: Rs 225 | Upside: 50 percent. HDFC Securities lowered its earnings to factor in higher provisions, given that 76 percent of the book is under moratorium, and slower growth. Nevertheless, company remains top NBFC pick, given its strong liquidity and funding profile, superior historical asset quality trends and diversified portfolio.
Dhampur Sugar | Brokerage: ICICIdirect | Rating: Buy | LTP: Rs 123 | Target: Rs 155 | Upside: 26 percent. With the steady reduction in sugar inventory through exports and increased diversion towards B heavy ethanol, ICICIdirect expect the company to generate Rs 280 crore of cash flows in FY21E, which would help it reduce debt. Though the lockdown has not significantly impacted earnings of sugar companies, it has resulted in increase in sugar inventory in system, which is likely to impact company's ability to reduce debt aggressively.
Dhampur Sugar | Brokerage: ICICIdirect | Rating: Buy | LTP: Rs 123 | Target: Rs 155 | Upside: 26 percent. With the steady reduction in sugar inventory through exports and increased diversion towards B heavy ethanol, ICICIdirect expects the company to generate Rs 280 crore of cash flows in FY21E, which would help it reduce debt. Though the lockdown has not significantly impacted earnings of sugar companies, it has resulted in increase in sugar inventory in system, which is likely to impact company's ability to reduce debt aggressively.
State Bank of india
State Bank of India | Brokerage: Sharekhan | Rating: Buy | LTP: Rs 184 | Target: Rs 262 | Upside: 42 percent. The high coverage and strong market position of the bank are positive cushions. Moreover, its healthy PCR of 83.7 percent indicates less residual stress from the legacy book.
Gateway Distriparks | Brokerage: Sharekhan | Rating: Buy | LTP: Rs 91 | Target: Rs 110 | Upside: 20 percent. Company's rail business and cold chain business continue to fare well in the current environment owing to being categorized in essential services. Sharekhan believe company’s deleveraging plan along with healthy profitability in the rail division should gradually drive net earnings growth during FY2022. It has lowered its earnings estimate for FY2021-FY2022 factoring in lower volumes on account of COVID-19 pandemic.
Gateway Distriparks | Brokerage: Sharekhan | Rating: Buy | LTP: Rs 91 | Target: Rs 110 | Upside: 20 percent. Company's rail business and cold chain business continue to fare well in the current environment owing to being categorized in essential services. Sharekhan believe company’s deleveraging plan along with healthy profitability in the rail division should gradually drive net earnings growth during FY2022. It has lowered its earnings estimate for FY2021-FY2022 factoring in lower volumes on account of COVID-19 pandemic.
Moneycontrol News
first published: Jun 10, 2020 08:40 am

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