Broking firm, Prabhudas Lilladher has recommended buying the stock of Burger King, while Ajcon Global is betting on the stock of Siemens for returns.
Buy Burger King India for 57% Returns
Prabhudas Lilladher has a buy call on the stock of Burger King India for returns of 57%. The stock is currently trading at Rs 159.25 and the broking firm sees an upside potential of upto Rs 250.
Burger King India has entered into a non-binding understanding to acquire 85% stake in PT Sari Burger Indonesia from F&B Asia ventures (65.8%) and Mitra Adiperkasa (19.2%).
According to Prabhudas Lilladher, acquisition of BK Indonesia will mark Burger King India's entry into the fourth most populated country becoming the second largest QSR brand in Indonesia which offers several synergies and BK's target positioning of 60% population age under 30 (millennials).
The company also has plans to launch Breakfast Menu and BK Café by 4QCY21 to improve 24 hour offering. Increased Focus on Full Service Drive Thru which remain operational 24x7 and offer higher margins than Malls.
"We believe Burger King Indonesia at 25% discount to FY23 EV/EBITDA of Burger King India and accounting for 21% of equity dilution at Rs 160 (79.84mn shares) can provide an increase in fair value by Rs 25 per share, which would be higher on DCF basis. We will incorporate Burger king Indonesia in our projections once the acquisition is approved. Maintain BUY with an unchanged target price of Rs 250," Prabhudas Lilladher has said.
Buy Siemens Ltd, says Ajcon Global
Broking firm, Ajcon Global sees the potential for 18% gains on the stock of Siemens India. The firm has set a price target of Rs 2,710 on the stock against the current market price of Rs 2,300.
"Over the years, Siemens Ltd in India has emerged as a leading inventor, innovator and implementer of leading-edge technology enabled solutions operating in the core business segments of Industry, Energy and Healthcare. At current market price of Rs. 2,300 the stock is valued at a P/E of 72x at trailing twelve months EPS. We recommend a "BUY" and assign a target price of Rs. 2,710 (P/E of 60x at estimated FY23 EPS of Rs. 45.16," it has said.
The following factors have been highlighted by the brokerage for its buy call:
a) strong parentage - Siemens AG
b) business model suited to new age
c) best play in Digital industries, smart infrastructure and mobility space
d) technology leadership in digitisation and automation products
e) increased demand for digital technologies, including cybersecurity solutions
f) catering to electric vehicles industry
g) the Company's partnership with OLA to build its upcoming electrical vehicle manufacturing facility will be one of the largest in the world
h) Strong growth prospects with good order inflows witnessed and improved traction going ahead,
"For the quarter ended June 2021, the Company witnessed good growth led by short cycle products business in smart infrastructure and digital industries segments, new orders and revenue more than doubled in Q3FY21 on YoY basis. All business segments record new order growth over pre-pandemic 2019 levels in Q3FY21," the brokerage has said.
The above stocks are based on the report of Prabhudas Lilladher and Ajcon Global Investing in stocks is risky and investors should do their own research. The author, the brokerage firms or Greynium Information Technologies are not responsible for any losses incurred due to a decision based on the above article.