Renowned firm Emkay Global Financial Services Ltd has recommended 2 company stocks to buy with good returns in the latest report, namely Gulf Oil Lubricants and Aditya Birla Fashion & Retail.
Gulf Oil Lubricants
The Current Market Price (CMP) of Gulf Oil Lubricants is Rs. 590, and according to Emkay Global, the Target Price for the stock should be Rs. 815. So, in the upcoming 12 months the returns can be 38.1% according to Emkay Global. Hence, the firm has maintained its 'Buy' tick on the company's stock and said that the company's earnings can beat estimates on better-than-expected volumes.
Emkay Global's take on Gulf Oil Lubricants
Gulf Oil Lubricants' Q2FY22 revenue/EBITDA/PAT of Rs. 5.34bn/Rs773mn/Rs587mn were up by 30%/down 1%/down 1% YoY (up 28%/83%/93% QoQ), beating Emkay Global's estimates. Lube sales volume of Gulf Oil Lubricants increased 12% YoY/20% QoQ to 33mn ltr, with growth across segments primarily driven by B2C and overall recovery. Net realization rose 7% QoQ to Rs161.7/ltr, though unit COGS was also up as cost pressures continued.
Keeping a 'Buy' tick on the stock, Emkay Global said, "We raise FY22E EPS by 19%, considering the H1 run rate and building in 4% higher EBITDA/ltr and 10% higher volumes. We raise FY23E EPS slightly on better volumes and keep FY24E largely unchanged. We raise the Dec'22 TP by 2% to Rs815. Reiterate Buy."
The Current Market Price (CMP) of Aditya Birla Fashion & Retail is at Rs. 289, and according to Emkay Global, the Target Price for the stock should be Rs. 340. So, in the upcoming 12 months the returns can be 17.8% according to Emkay Global. Hence, the firm has maintained its 'Buy' tick on the company's stock and said that the company is expecting strong recovery and faster expansion, with an improved growth outlook.
Emkay Global's take on Aditya Birla
Aditya Birla Fashion & Retail's Q2 operating performance has been ahead of the firm's estimates, despite a weak wholesale channel. Their Lifestyle segment recovered 92%, as Retail/Online channels surpassed pre#Covid levels, and Pantaloons recovery was slower at 73% due to higher mall presence. Emkay Global said, "We raise FY23-24 earnings estimates by 9-11% on a faster recovery and ethnic-wear consolidation. Considering a stronger recovery and higher growth visibility."
The above stocks have been picked from the brokerage report of Emkay Global Financial Services Ltd. Investing in equities poses a risk of financial losses. 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.