Sensex and Nifty have gained a small more than 1% so far in September but have managed to hit fresh all-time highs repeatedly. S&P BSE Sensex has scaled 58,553 when the NSE Nifty 50 hit 17,436 for the very first time ever. Although the benchmark indices have moved variety-bound given that reaching fresh record highs, stock-precise action has continued. With uncertainty surrounding how higher Dalal Street can climb as tapering speak begins in the United States and the third wave of covid-19 disrupts worldwide economies, Yes Securities has picked 4 stocks that it believes can give returns in the variety of 40-81% more than the next 12 months.
Aditya Birla Capital – Buy
Target value: Rs 205
Aditya Birla Capital’s share value started this year strongly, surging 50% among January and the very first week of March. However, given that then, the stock has slipped 15%. Analysts at yes Securities stated they think Aditya Birla Capital is at an inflexion point with all franchises anticipated to do effectively in the next 3 years. Analysts added that Aditya Birla’s management has guided that in the NBFC business enterprise, retail and SME mix to raise to practically 65% by economic year 2023-24 when in the housing finance business enterprise, inexpensive housing share to raise to ~65%, and for the money cow business enterprise of AMC, the expectation is to have a sustained ROE in the variety of 35-40% in next 3 years. The target value set by Yes Securities would see the stock rally 81% from existing levels.
Sundram Fasteners – ADD
Target value: Rs 1,324
Share value of Sundram Fasteners has currently zoomed 77% so far in 2021, outperforming the benchmark Nifty 50. “Sundram fasteners has showcased a healthy financial performance in the past (FY10- 20 PAT CAGR of ~15.5%) and dividend pay-outs (25%+),” Yes Securities stated. They added that improvement in business enterprise across verticals is most likely to preserve ROEs at18%. “We believe company is likely to see accelerated growth between FY22-25 as both automotive and non-automotive verticals will do well, which would also lead to re-rating in the stock. Given the quality play, the stock is currently trading at an attractive valuation of 23x FY24E P/E and 13.5x FY24E EV/EBIDTA,” they added. From existing levels, the stock will want to rally 43% to attain the target value.
The firm has diversified its business enterprise in current years and expanded its geographical presence beyond India. The stock value has, nevertheless, not been rewarding for investors, falling 4% so far this year. “We are positive on Kansai largely backed by expected improvements in structural drivers such as shift towards organized sector, housing push in semi-urban and rural areas, shorter painting cycles, governments focus on increasing rural income and increased consumer awareness in rural areas,” the brokerage firm stated. Kansai commands ~40% market place share in Industrial segment. “We expect ROE to move to reach 17% by FY23E. Given quality play, the stock is trading at an attractive valuation of 33x FY24E P/E,” Yes Securities stated. The stock will have to jump 48% from the existing value to attain the anticipated target value.
Zydus Wellness – Buy
Target value: Rs 3,360
The FMCG firm’s share value has surged 28% from the middle of March to date following possessing fallen drastically among January and March. “Zydus has a good track record of creating brands and then scaling it up. We expect a continuation of same for next few years supported by strong macro tailwinds and changing consumer behaviour,” Yes Securities stated. The firm is in a leadership position in 4 out of the six brands it runs. “Given quality play, stock trading at an undemanding valuation of 30x FY24e, lower than its peer set trading between 40x-60x of FY24,” the brokerage firm stated. The stock is anticipated to surge 40.5% to attain the predicted target value.