Delhivery, Mahindra Holidays and more: ICICI Direct lists 8 stocks with up to 24% upside

Shalby: The brokerage has a ‘buy’ call on the stock with a target price of ₹220, indicating an upside of over 18 percent. ICICI Direct has assigned the rating on the back of 1) a strong arthroplasty legacy and diversification into other super-specialties 2) asset light model via franchisee drive, and 3) expansion of implant business into newer geographies besides stronger India and US traction. Shalby is a market leader in arthroplasty procedures with a 15% market share of all joint replacement surgeries by organised private corporate hospitals, informed the brokerage. The stock surged almost 70 percent in the last 1 year and 23 percent in 2023 YTD.

NCC: The brokerage has a ‘buy’ call on the stock with a target price of ₹170, indicating an upside of 22.5 percent. NCC is a key beneficiary of the tailwinds in the buildings, roads, water, mining, and electrical segments. Given the strong order book visibility, and improving balance sheet strength, it is poised for a strong growth ahead, said ICICI Direct. Well-diversified order backlog, robust execution capabilities, and a strong focus on debt reduction and working capital are likely to be key over the next few years, it added. The stock gave multibagger returns in the last 1 year, rallying 144 percent and gaining 66.6 percent in 2023 YTD.

Mahindra Holidays & Resorts: The brokerage has a ‘buy’ call on the stock with a target price of ₹400, indicating an upside of almost 18 percent. As per ICICI Direct, MHRIL is expected to be a key beneficiary of strong industry tailwinds such as robust recovery in room occupancies, an expanding aspirational consumer segment, and low penetration of the VO (vacant ownership) market in India providing significant headroom for growth. Furthermore, sustained inflation in average room rates is expected to drive demand for the VO model, said the brokerage. The stock jumped over 50 percent in the last 1 year and 32 percent in 2023 YTD.

Kajaria Ceramics: The brokerage has a ‘buy’ call on the stock with a target price of ₹1,680, indicating an upside of 24 percent. Kajaria with a net cash balance sheet and superior brand, is a solid play on the tiles sector with expanding reach to tier 2/3 cities. With gas price decline, sharp margin recovery will be seen in FY24, driving strong earnings growth, noted the brokerage. The strong earnings growth and healthy dividend payout are likely to improve return ratios (RoCEs likely at 25.6% in FY26E vs 17.7% in FY23), it forecasted. The stock rose 36 percent in the last 1 year and over 19 percent in 2023 YTD.

Balkrishna Industries: The brokerage has a ‘buy’ call on the stock with a target price of ₹2,920, indicating an upside of 21.5 percent. The rating comes amid healthy sales growth prospects coupled with margin recovery leading to robust bottom-line growth. It also finds comfort in its durable high double-digit return ratios profile and lean balance sheet. Building in the recovery, we expect sales and PAT at BKT to grow at a CAGR of 5.6% (volume CAGR: 8.9%) & 32.0% respectively over FY23-25E. The stock was up just 5 percent in the last 1 year and added over 13 percent in 2023 YTD.

Ahluwalia Contracts: The brokerage has a ‘buy’ call on the stock with a target price of ₹800, indicating an upside of 16 percent. Ahluwalia is a key beneficiary of the tailwinds in the segments such as real estate, hotels, hospitals, station redevelopment as well as corporate/industrial capex. Given the strong expertise of 5 decades, order book visibility, history of robust execution and balance sheet strength, Ahluwalia is poised for a strong growth ahead, said the brokerage. Given the robust order book, it expects strong revenue CAGR of 23% over FY23-25E to ₹4,296 crore. It also estimates margins to improve to 11% and 11.5% in FY24 and FY25, respectively vs. 10.7% in FY23. Strong topline growth coupled with margins expansion is likely to drive 31% earnings CAGR over FY23-25E, it added. The stock has advanced 51 percent in the last 1 year and 44.5 percent in 2023 YTD.

Delhivery: The brokerage has a ‘buy’ call on the stock with a target price of ₹500, indicating an upside of 23 percent. Delhivery has shown strong growth and built a recognisable brand in a segment marred by intense competition and low barriers to entry, noted the brokerage. It is the most efficient player in the market and hence is able to competitively price its offerings to customers, added ICICI Direct. It sees the strong balance sheet and liquidity position helping the firm sail through volatility in the B2C space. The stock has shed 31.5 percent in the last 1 year but has added 22 percent in 2023 YTD.

NRB Bearings: The brokerage has a ‘buy’ call on the stock with a target price of ₹270, indicating an upside of 21 percent. ICICI Direct believes that with a visibility of 24% PAT CAGR over FY23-25E and a controlled leverage, NRB is highly undervalued across the bearings space. Even discounting the fact that it has one segment exposure unlike other bearings companies, the stock still remains undervalued and the brokerage expects a rerating to set in. Going ahead, with no major volatility expected in steel prices, and double-digit growth in export markets, ICICI Direct estimates margins to improve to 16.7% and 17.6% in FY24E and FY25E respectively. It also sees revenues growing at a CAGR of 11% over FY23-FY25E to ₹1,308 crore. The stock has gained 60 percent in the last 1 year and 46 percent in 2023 YTD.