Amid positive sentiment in the market on easing inflation, domestic brokerage house YES Securities has hand-picked 4 stocks — CCL Products, Polycab India, Shriram Transport Finance and Orient Cement — that it expects to see an upside of up to 29 percent in the next 12 months. Take a look:
BUY | CMP: ₹505 | Target price: ₹610 | Upside: 20%
The brokerage house is positive on CCL Products on the back of its strong footing in the international markets as it continues to gain market share, a cost-efficient business model, doubling of Vietnam capacity, new capacity addition in India leading to strong sales volume growth visibility for the next 2-3 years, capacity addition in value-added products and foray into high margin branded retail business.
It stated that the firm's domestic business has been showing some signs of pickup with the introduction of new variants and aggressive marketing in southern markets of India. It would continue to look for market penetration and expansion of the distribution network to boost growth. Entry into new markets will be the key focus area for the company, it said.
The stock has jumped 30 percent in the last 1 year and 18 percent in 2022.
BUY | CMP: ₹2,695 | Target price: ₹3,250| Upside: 20%
Yes Securities believes that the company is well placed to attain its targets as it is focusing on increasing its distribution presence and introducing new and innovative products across the product categories. This, along with investments in digital and backward integration would augur well for the company, it says.
The stock is up 7 percent in the last 1 year and 8 percent in 2022. It has fallen over 3.5 percent in November so far, snapping gains of the last 4 months. Between July and October, the stock surged 26 percent.
BUY | CMP: ₹1,265 | Target price: ₹1,625 | Upside: 28%
As per the brokerage, the company can target strong growth in the coming quarters by riding the commercial vehicle (CV) upcycle and showing further improvement in asset quality. "Going forward this stock can get re-rated from the current levels as an outcome of sustaining improvement of AUM from new vehicle sales and consolidating strong performance in used vehicle sales," it said.
SHTF is among the market leaders in the pre-owned CV segment and has institutionalised its expertise in loan origination, valuation and collection, noted the brokerage. Over the years, SHTF has created an ecosystem by expanding its products and services to encompass similar asset classes and ancillary services as holistic financing support, it added.
In its recently announced results, SHTF reported decent growth in PAT (up 38 percent YoY and 10 percent QoQ) along with lower provisions (down 16.5 percent QoQ basis) and strong AUM growth.
The stock has fallen 21 percent in the last 1 year and has gained 2.5 percent in 2022.
BUY | CMP: ₹129 | Target price: ₹167 | Upside: 29%
"Orient Cement is expected to generate a strong CFO of ₹1,100 crore over FY23-24E that would partially fund its planned capacity expansion, while the rest would be funded through debt. Hence with a strong balance sheet and growth levers in place, we find Orient Cement in a sweet spot," explained the brokerage.
Orient Cement significantly deleveraged its balance sheet owing to continually increasing profitability, which improved its ability for capacity expansion, it further noted.
The stock has fallen 29 percent in the last 1 year and 17 percent YTD. However, it has risen a little over 2 percent in November so far, extending gains for the fourth straight month. Between August-November, the stock has gained nearly 15 percent.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.