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2 NBFC And Clothing Stocks To Buy For Gains Up To 68% And Good Dividends

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Emkay Global Research, a leading broking house in the country has listed the stocks of Power Finance Corporation and TCNS Clothing among the stocks to buy for good gains going ahead.

 

Buy Power Finance Corporation for 68% Gains
 

Buy Power Finance Corporation for 68% Gains

Current market price Rs 131
Target price Rs Rs 220
Gains % 68%

Emkay Global has recommended buying the stock of Power Finance Corporation for a target price of Rs 220, as against the current market price of Rs 131.

According to the brokerage house, asset-quality trends were encouraging, as out of the total Stage-3 assets of Rs 211.5 billion for 26 projects, 16 projects worth Rs 158.2 billion are already admitted under the NCLT with 69% provision coverage, while 10 projects worth Rs 53.3 billion with 54% coverage are being pursued outside the NCLT. Overall coverage improved to 65% from 63% last quarter.

Aatmanirbhar plans for SEB may support near-term disbursements; however, finding new growth avenues - amid weak thermal power additions - is a necessity, Emkay Global has said.

"We continue to like the company based on improving asset-quality trends and an attractive risk-reward. Maintain Buy on the stock of Power Finance Corporation and roll forward to Sept'22E with a revised target price of Rs 220 (Rs 215 earlier), corresponding to 1x P/Adjusted Sept'23E book. We are increasing the dividend payout estimate to 45% by FY24E, based on revised guidelines from the RBI," the brokerage has said.

PFC is also available at a good dividend yield of more than 7%.

Buy TCNS Clothing stock

Buy TCNS Clothing stock

Current market price Rs 568
Target price Rs Rs 860
Gains % 51%

The brokerage is also bullish on the stock of TCNS Clothing and has suggested buying the stock for gains up to 51%.

"Revenue recovery of 35% in Q1 was in line with peers and better than 10% recovery seen last year. Better recovery was aided by a healthy 112% recovery in the ‘online & others' channel. The physical channels (EBO/LFS) remained impacted with a 15-20% recovery due to store closures for half of Q1 and operational restrictions upon opening. TCNS Clothing, however, indicated a faster recovery of 70% for operational stores and a better fresh sales mix in the ongoing EOSS," the brokerage has said.

According to Emkay Global, TCNS Clothing does not plan to raise additional capital to fund organic growth. Notably, TCNS Clothing was also able to tide through the FY21 Covid crisis with a stronger debt-free balance sheet, unlike many apparel peers, which raised capital to either fund losses or pursue grow

"We increase FY23/24 EPS estimates by 20% and 4% on front-loading of per-store recovery in FY23E vs. FY24E earlier. TCNS' design/sourcing edge, agile back-end and strong online presence keep us positive. Maintain a Buy on the stock of TCNS Clothing with a revised target price of Rs 860," the brokerage has said.

Disclaimer

Disclaimer

The article is informational in nature, which is taken from the brokerage report of Emkay Global. Please do consult a professional advisor. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and authors do not accept culpability for losses and/or damages arising based on information in the article.

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