2 Stocks To Buy And Sell Now, As Suggested By Motilal Oswal

The Indian stock markets are down today, on weak global cues. The Nifty fell to 17,205.15 points, and the Sensex fell to 57,891.73 points at the time of writing today. Major indices are also performing poorly this month, due to inflation fears. Here, two stocks have been discussed by Motilal Oswal to buy and sell this month.

APL Apollo Tubes - stock performances

The current market price of APL Apollo Tubes (APAT) is Rs. 1,126/ share, and Motilal Oswal has estimated a target price for the stock at Rs. 1,330/share, and given a buy rating. In the last 5 years it has given 490% returns. The stock is expected to give 18% returns. The company saw tepid demand in 1QFY23 due to destocking of inventory in the channel as steel prices were at all-time high levels; however, a fall in prices was anticipated due to steps taken by the government to control inflation.

Stock advantages - valuation and view

The brokerage firm stated, "We believe APAT's earnings momentum would continue with growing demand across segments, increased product penetration with the help of a robust distribution network, an increase in the share of VAP, thus driving margins, the introduction of Apollo Mart, and its market leadership position." Overall 1HFY23 volume grew 28% YoY to 1,025,071MT. APAT's overall 2QFY23 volume increased 41% YoY/42% QoQ to 602,283MT fueled by general structure tubes that increased 72% YoY.

India Cements - stock performances

The current market price of the company is Rs. 275/ share, and Motilal Oswal has estimated a target price for the stock at Rs. 180/share, and given a sell rating. This year, it has given 32.94% returns to the shareholders. Motilal Oswal is expecting gross/net debt of ICEM to be at Rs. 21.9b/21.6b in FY24E. This will lead to EPS of Rs. 6.8 in FY24E. However, India Cements (ICEM) is expected to divest its entire shareholding in Springway Mining Pvt Ltd for a consideration of Rs. 4.77b to JSW Cement. ICEM will also receive a total of Rs. 1.27b towards the advance paid (Rs. 1.18b) to SMPL and interest on such advances (Rs. 90m), taking the total consideration to Rs. 6.04b.

Stock advantages - valuation and view

"Expectations of consolidation in the cement sector have led to an upside in the stock (up 42% after 1Q results) despite significant pressure on earnings (EBITDA/t expected to be at Rs. 18 in 2QFY23). Valuations at 15.8x FY24E EV/EBITDA and USD82 EV/t appear unattractive, given the absence of capacity addition plans and high net debt/EBITDA (3.2x in FY24E revised). We reiterate our Sell rating on the stock with a price target of Rs. 180," according to Motilal Oswal.

Return comparison from stocks - NSE

In this table the Current Market Price (CMP) and the Target Price (TP) of the recommended stocks have been mentioned.

Company	CMP	Target Price
APL Apollo Tubes	Rs. 1,126	Rs. 1,330
India Cements	Rs. 275	Rs. 180

Disclaimer

The above stocks were picked from the brokerage report of Motilal Oswal. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.