3 Stocks That Have The Potential To Generate Good Returns

Markets have surged on Tuesday, following reports that the Russian Defense Ministry reportedly announced that it had begun returning some troops to deployment bases after training exercises near the Ukrainian border. This led to the Sensex surging almost 1500 points in trade. Here are 3 stocks that good buys, according to broking firm Anand Rathi.

But Nilkamal Plastics, says Anand Rathi

Anand Rathi has set a buy on the stock of Nilkamal Plastics with a price target of Rs 2687 on the stock. A distribution centre has been set up at Bhiwandi to meet existing and future warehousing needs. Regional warehousing capacities are being stepped up in Northern and Southern markets for lean supply-chain management.

"We expect 16.2%/22.5% revenue/earnings CAGR over FY21-24. Also expected is robust business traction and input prices cooling off gradually. Hence, we believe the stock is attractively valued. We upgrade our rating on it to a Buy, with higher price target of Rs2,781 based on 20x FY24 EPS (earlier Rs 2,687 based on 17x FY23 EPS)," the brokerage has said.

Buy the stock of Ashok Leyland

The brokerage is also bullish on the stock of Ashok Leyland and has set a price target of Rs 283 on the stock. The strong and consistent recovery in volumes were the highlights of the quarter, according to Anand Rathi.

"As economic activity picks up, post-third Covid wave, we expect strong volumes. Also, launches in CNG have received a positive response and demand is strong, per management. On the EV front, it continues to build its order book for domestic and export markets. Accordingly, we maintain a Buy at a lower target price of Rs 157 (29 times FY24e)," the brokerage has said.

Buy the stock of ACC, says Emkay Global

Emkay Global has suggested buying the stock of ACC with a price target of Rs 2,550. According to the brokerage, the management mentioned that the ongoing expansion projects are on track. The expansion will increase ACC's grinding capacity to 40mt (from 35mt currently) by early Q2CY23, and the company aims to increase it further to 45-50mt by CY25E.

"Factoring in higher opex/ton, we cut our CY22-23 EBITDA estimates by 6-11%. We also reduce our fair value EV/EBITDA multiple to 10.5x from 11x, based on marginally higher WACC/CoE. We roll forward to Mar'23 (from Dec'22) and cut our TP to Rs2,550 (earlier Rs2,620). Maintain Buy," Emkay Global has said in its report.

Disclaimer

Investing in stocks is risky and investors should do their own research before investing. The author and Greynium Information Technologies are not responsible for any losses incurred due to a decision based on the above article. Investors should also exercise due caution as markets are extremely volatile due to geo-political tensions and rising interest rates.