2 Stocks To Buy For Gains Of 38% & 33% From The Auto And Energy Space

Broking firm CD Equisearch has recommended buying the auto ancillary stock of LG Balakrishnan, while Khambatta Securities has listed the stock of Anmol India as a buy.

Buy LG Balakrishnan stock, says CD Equisearch

CD Equisearch has a "buy" call on the stock of the auto ancillary player for a price target of Rs 565, as against the current market price of Rs 409, thus implying an upside of almost 38% from the current levels. L G Balakrishnan manufactures roller chains and undertakes metal forming, including warm & cold forging, fine blanking and machined parts.

The stock currently trades at 7.8 times FY22e EPS of Rs 52.51 and 6.5x FY23e EPS of Rs 62.83. Post tax earning is projected to grow by over 27% CAGR over the next two years on stable sales growth (sales estimated to grow by 11% this fiscal and by 9.4% in FY23.

"LG Balakrishnan's competitive advantage in terms of product quality and market reach would enable it to further penetrate in the propitious replacement market. Risks in terms of rise in Covid 19 cases cannot be ignored. Weighing odds, we maintain our buy recommendation on the stock with revised target of Rs 565 (previous target: Rs 276) based on 9 times FY23 estimated earnings over a period of 6-9 months," the brokerage has said.

Anmol India

Khambatta Securities has set a price target of Rs 255 on the stock of Anmol India, as against the current market price of Rs 191, which implies gains of 33%.

The company is a bulk supplier of imported coal, providing end-to-end coal supply chain management solutions. The company specialises in supplying high GCV coal, USA coal, Indonesian coal, Saudi pet coke and USA pet coke, commanding a sizeable 16% share of the USA coal market in India

"A growing and industrialising economy along with increasing urbanisation is expected to drive up energy use as coal is seen to remain India's energy mainstay for next 30 years. India does not produce adequate quantity of coal to meet the domestic demand while various types, grades and varieties of coal are required for different end uses. As a result, coal imports are expected to remain strong going forward," Khambatta Securities has said in its report.

"We expect Anmol to register healthy growth in sales and profits going forward, driven by high demand for imported coal as the company expands its product portfolio and geography of operations. At current levels, the Anmol stock trades at an attractive 8.8 times FY24E EPS. Assigning a target P/E multiple of 13 times FY23E EPS, we value Anmol at Rs 255, informing a BUY rating with an upside of 48%," the brokerage has further added.

Disclaimer

The above stocks are based on the report of two brokerages mentioned above. 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. Investors should hence exercise due caution as are at record peaks. Please consult a professional advisor