As India celebrates Independence Day on 15 August, Monday, domestic brokerage firm Angel One Limited has recommended 5 stocks for bumper returns in long term. These stocks are picked from various sectors and categories (large, mid and small-cap).
1. Amber Enterprises – Target: 3850, Upside: 70%, Period: 12 months
Amber Enterprises India is the market leader in the room air conditioners (RAC) outsourced manufacturing space in India. It would outperform the industry due to its dominant position in RAC contract manufacturer, increase in share of business in existing customers and new client additions.
It has acquired companies like IL JIN Electronics, Ever and Sidwal Refrigeration Industries in the past 2-3 year, which would help in backward integration. The brokerage expects healthy profitability on the back of foray into the Commercial AC segment, entry into export markets, participation in the PLI scheme.
2. Sona BLW Precision – Target: 843, Upside: 51%, Period: 12 months
Sona BLW has a strong positioning in the Indian Differential Gears market across PV, CV, and tractor OEMs and it continues to gain market share globally aided by its combined motor and driveline capabilities. Focus on R&D is yielding results in new product development, aiding further growth.
Sona BLW continues to add new customers and win new orders and its order book stands at Rs 20,600 Cr which along with its strong financial profile and expected ~45% earnings CAGR over FY22-24E justifies the premium multiples of ~45x FY24E EPS.
3. Jubilant Ingrevia – Target: 700, Upside: 43%, Period: 12 months
Jubilant Ingrevia has a vast array of products across its three divisions and is one of the top two producers of Pyridine – Beta and vitamin B3 globally. It derives 56% of its revenues from the life science chemicals division while the specialty chemicals and nutrition & health solution business.
At current levels, the stock is trading at a P/E multiple of ~13.5xFY24 EPS which is at a significant discount to other chemical companies. Therefore, we believe that there is value in the stock at current levels and hence rate it a BUY.
4. HCL Tech – Target: 1192, Upside: 24%, Period: 12 months
HCL Tech is amongst the top four IT services companies in India. The company provides a vast gamut of services like ADM, Enterprise solutions, Infrastructure management services, etc.
New deal TCV at USD 2.1bn was up by 23% YoY and included many large deals. Strong deal wins will help drive growth in the services business, which should make up for the continued softness in the product business. The stock is trading at a significant discount to the other large-cap IT companies and offers tremendous value at current levels.
5. Stove Kraft – Target: 805, Upside: 45%, Period: 12 months
Stove Kraft Ltd is engaged in the business of manufacturing & selling kitchen & home appliances products like pressure cookers, LPG stoves, nonstick cookware etc. under the brand name of ‘Pigeon’ and ‘Gilma’.
It has outperformed industry and its peers in the pressure cookers and cookware segment over the last two years. Going forward, we expect Stove Kraft to report healthy top-line & bottom-line growth on the back of new product launches, strong brand name and wide distribution network.