ITI

Dynamic Levels has picked the stock of ITI as a great buying opportunity. The firm sees a target of Rs 55 on the stock, which is a jump of almost 30 per cent from current levels. The reasons for recommending the stock are plenty, according to equity research firm Dynamic Levels.

"Profit After Tax has shown a tremendous jump. Under revival plan, several projects have been planned for implementation at various manufacturing plants of ITI. The company has been a part of the Government projects, like National Population Register, Socio Economic & Caste Census etc. With thrust towards services through digital means, there are many opportunities to provide e-governance applications and services at central and state government level," the firm has noted.

Winning new orders

"ITI has won the tender from BBNL for the supply of G-PON equipments with C-DoT technology. The company's EPS has also turned positive from negative, which is a huge boost for the company. ITI also has an acceptable return on Capital Employed at 18 per cent to 20 per cent," Dynamic Levels has noted.

Huge business opportunities

Dynamic Levels says there is a huge opportunity in electronics manufacturing and communication services. "There are many other business opportunities in the field of Defence electronics and communications, Solar power solutions, Energy storage products etc. and ITI has already ventured in to many of these areas, like solar panel," the research report points.

Granules India

GE Capital is bullish on Granules India and has set a price target of Rs 134 on the stock. Ganules India is a south based, fast growing global pharmaceutical company. GIL has presence across entire pharma value chain from Active Pharmaceutical Ingredients (APIs) to Pharmaceutical Formulation Intermediaries (PFIs) to Finished Dosages (FDs). It has a strong presence in ‘first line of defense' products such as Paracetamol, Ibuprofen and Metformin. Currently, company has eight manufacturing facilities spread over India, China & US. Company operate in 75 countries, with over 300 customers across the globe & about 60% of the company's turnover comes from North America and Europe.

Investment rationale

According to the GE Capital report the company is currently undergoing capacity expansion plan in Paracetamol by 6000tpa, Metformin by 7000tpa, Guaifenesin by 2000tpa, PFI by 4000tpa & to reach 24000tpa, 9000tpa, 3200tpa & 22400tpa in paracetamol, metformin, guaifenesin & PFI capacity respectively, which should augur well for the company. Granules focus on GIL focus gradually moving higher on value chain and solid financials should augur well for the company.

Valuations

"At CMP of Rs 112, GIL trades at 16.0x its FY17E EPS of Rs 7.0/- We believe, substantial product approval, greater traction in Auctus Portfolio & higher realization in Omnichem JV to boost GIL growth going ahead. Hence, we recommend BUY rating on a stock price with a target price of Rs 134/-, thus implying 20% upside from current levels," the firm has said in its research report.

Conclusion

Buy into these stocks, only if you are a long term investor. Some of these stocks like ITI are also slightly high risk bets. Do your own research before buying.

Disclaimer

The article is not a solicitation to buy, sell in securities or other financial instruments. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates, the equity research firm and the author do not accept culpability for losses and/or damages arising based on information in this article. The author and his family do not own any shares in the above mentioned stocks.