Edelweiss Wealth Research has recommended buying the stock of Canfin Homes, while Axis Securities has recommended buying the stock of Mold-Tek Packaging Ltd. Here are some reasons the brokerages are bullish on these stocks.
Mold-Tek Packaging Ltd
Axis Securities has set a price target of Rs 585 on the stock, as against the current market price of Rs 498.
According to the brokerage the Pumps business is set to drive growth at the company. "The pumps business is an import-substitution opportunity for Mold-Tek Packaging and is likely to be a key growth trigger going forward. We expect this segment to significantly contribute to the company's topline from FY23E onwards. Additionally, Mold-Tek Packaging is in the advanced talks with a couple of FMCG leaders (soap major and renowned Ayurvedic Product Company) for the pumps business which is expected to materialize into commercial orders in H2FY22," the brokerage has said.
Mold-Tek Packaging Ltd: First company to introduce QR Code IML containers in India
According to Axis Securities, the management expects the pumps division to grow at 15% QoQ. "Mold-Tek Packaging is the first company to introduce QR Code IML containers in India, thus enjoying a first mover's advantage in the industry and keeping its edge over the competition. However, as this innovative packaging solution was first introduced in Europe, there are handful players globally having such capabilities. The company is in talks with an MNC lube player who is testing the product in the market," Axis Securities has said.
Mold-Tek Packaging: Valuation
According to Axis Securities, growth at the company is expected to be driven by the new opportunities such as pumps used in hand sanitisers, the ramp-up of production at its Paints capacities at Vizag and Mysuru as well as new facilities at Sultanpur and Kanpur.
"Furthermore, with an improved product mix in favour of higher-margin IML and value-added products, we expect EBITDA/Kg to remain healthy supported by strict cost control measures despite raw material price volatility. We retain a BUY with a target price of Rs 585 per share and continue to value the stock at a target multiple of 20x basis FY24E EPS," the brokerage has said.
Buy Can Fin Homes stock, says Edelweiss Wealth
Edelweiss Wealth is bullish on the stock of Can Fin Homes and has set a price target of Rs 694 on the stock, as against the current market price of Rs 624.
"Given the composition and asset quality of its book, we believe Can Fin Homes should trade at a premium compared to its peers. Management expects growth to return from Q2FY22 while NIMs/ spreads should increase with loans getting repriced at higher yields," the brokerage has said,
According to Edelweiss Wealth, going forward management expects NIMs/spreads to increase as most of the repricing is now being done at higher rates while cost of funds remain low.
"The company is sitting on excess provisions as these provisions are earmarked to be used for the company's restructuring 2.0, which is expected to be less than 2%. Thus credits costs should continue in the current range, sans a third covid wave," the brokerage has said.
Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage houses are not liable for any losses caused as a result of decisions based on the article.