2 Stocks That Have A Buy View From a Leading Brokerage: 1 Auto Stock and 1 Sportshoes Stock

Motilal Oswal has recommended investors to buy shares of a large cap company, and a small cap company. The companies are Eicher Motors Ltd and Campus Activewear Ltd. Based on the analyst coverage report, stocks of both these companies show a significant rise. In the report, the analyst explains the key points that have favoured the companies to get a 'Buy' view. Recently both the companies have even shared the Q3FY23 numbers. Here are the details.

Eicher Motors Ltd shares to buy, with a price target of Rs 3,625 per share

Eicher Motors Ltd is large cap company, is the listed parent of Royal Enfield, the global leader in middleweight motorcycles. It is the flagship company of the Eicher Group in India and a leading player of the Indian automobile industry. It manufactures motorcycles and commercial vehicles. Its current market capitalisation is Rs 90,618.31 crore.

The company reported stable performance despite the weak mix, but Motilal Oswal analyst sees a potential growth of 14% in stock price. The analyst feels that the softening of raw material (RM) cost and price hike will be reflected in the subsequent quarter, support margins and drive earnings growth, although the estimates have been cut. "3QFY23 consolidated EBITDA margin of 23% missed our estimate of 23.9% as it did not reflect full benefits of RM cost softening and price hikes (due to price protection offered to customers). With supply issues largely behind and a good response to Hunter, the key growth catalyst is a recovery in the core 350cc portfolio in India and exports. Improving supply, new product launches and the ramp-up in exports will drive the next phase of growth for RE. This coupled with stable commodity prices will support margins and drive earnings growth.  While we largely retain our FY23E EPS, we cut FY24E EPS by 11% as we lower our 1) volume estimates for domestic and exports and margin estimates. Maintain Buy with our SoTP-based target price of Rs 3,625 (Mar'25)."

Campus Activewear Ltd shares to buy, with a price target of Rs 480 per share

Campus Activewear Ltd was established in 2005 as lifestyle oriented sports and athleisure brand. It's core focus product is footwear; Running Shoes, Walking Shoes, Casual Shoes, Floaters, Slippers, Flip Flops and Sandals. There are multiple choices across styles, colour palettes, price points and an attractive product value proposition. The current market capitalisation of the company is Rs 12,003.12 crore.

According to the Motilal Oswal report, the company has managed to soften the blow of weak demand for the quarter results So the analyst has cut down the estimates but still see a potential gain of 18%, so it recommends this small cap stock. "Campus Activewear's profit after tax (PAT) declined 12% YoY (22% miss) due to slow revenue growth (7% YoY) in the backdrop of soft discretionary demand, particularly in the northern region (better than peers in the region). The RM cool off and controlled SG&A led to a 670bp QoQ gain in EBITDA margins to 19.7% (down 10bp YoY). We cut our FY23E/24E EPS sharply by 17%/22% on a weak recovery and factoring in a revenue, PAT CAGR of 19%/39% over FY23-25E. Softening RM prices offer silver lining in demand revival. Campus's strong market position and a long runway for growth warrant rich valuations. We reiterate BUY with a target price of Rs 480, valuing the stock at 55x P/E on FY25E EPS."

Share price movement of the companies

Company name	Current market Price (Rs/share)	52-week high (Rs/share)	52-week low (Rs/share)	Last six months
Eicher Motors Ltd	3304.95	3,886	2,110	Down by -0.99%
Campus Activewear Ltd	394	640	296.85	Down by 6.78%

(Source: BSE)

Disclaimer:

The stocks have been picked from the brokerage report of Motilal Oswal, Greynium Information Technologies and the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.