2 Large & Midcap Stocks Where Sharekhan Has A “Buy” Call On

Brokerage firm Sharekhan has a "buy" call on the stocks of Bharti Airtel and Dixon Technologies for the long term. Here are some of the reasons why the brokerage firm has a buy call.

Bharti Airtel: Industry leading ARPUs

According to Sharekhan, Bharti Airtel continued strong subscriber additions in October, adding 8.05 lakh subscribers compared to 4.12 lakh the previous month. With industry leading ARPUs of Rs. 190, the company continues to achieve greater traction in the telecom space. "Africa business revenue growth, which contributes ~30% to the top line, continues to be on a strong footing and grew by 4% q-o-q in USD terms at $1,308 million for Q2FY2023. Airtel has been steadily rolling out 5G services at select locations with plans to progressively cover the entire country by March 2024. The company is well placed to capture market share gains from 5G rollout, as it has a high-value customer base and greater compatibility with leading handset makers, although mass availability of handsets would determine the pace of scalability at retail consumer level," the brokerage has said.

Bharti Airtel: Buy for a price target of Rs 1010

Sharekhan has reiterated a "buy" call on the stock of Bharti Airtel. "We reiterate Buy on Bharti Airtel with an unchanged price target of Rs. 1,010. The stock is our preferred pick in the telecom space on account of its industry leading ARPU, growing subscriber base coupled with increased data monetisation and on expectation of gradual tariff hikes in the telecom space. The stock trades at 10/8.7x its FY2023/ FY2024E EV/EBIDTA," the brokerage has said.

Buy Dixon Technologies

Dixon Technologies (India) Limited (DIXON) is a leader in the outsourcing EMS industry with 35% share in LED TV and 50% share in lighting market in India based on capacity. Besides a strong manufacturing base, the company is building capabilities in designing and aims to capture bigger share of the market through backward integration and capacity expansion. The company boasts of strong clientele in all its product categories, which is being further enriched by addition of marquee global brands to its portfolio consistently. "Although volumes are expected to be muted in Q3FY2023 in mobile, TV and certain other product categories, strong order book across washing machines, mobile, security surveillance systems indicates healthy long-term revenue visibility. Operating margin are expected to improve driven by cost optimization, operating leverage, decline in commodity prices and increase in high-margin ODM revenues in the long term," Sharekhan has said,

Dixon Technologies: Price target Rs 4960

The company is set for a strong growth trajectory over the next 3-4 years with the management targeting to triple its size through customer acquisition across verticals, foray into new products, backward integration, and growth in exports. "Further, margins are expected to improve backed by backward integration, cost optimization and operating leverage. We envisage revenue/PAT CAGR of ~31%/~47% over FY2022-2025E. The recent correction in the stock price following a cautious management commentary for the current quarter provides long-term investors a buying opportunity. We value the stock on September FY2024E EPS and maintain our Buy rating on the stock with an unchanged price target of Rs. 4,960," Sharekhan has said.

 

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