ICICIdirect has a "BUY" call on two stocks during a period when domestic benchmark indices are trading at high levels. Trent Ltd is recommended to buy against the market price of Rs 1037 with a target price of Rs 1330 for a 28 percent upside potential in 12 months according to the brokerage, however, the stock is currently trading at 1089.60. ICICIdirect, on the other hand, has advised investors to purchase Dabur India stock for a target price of Rs 745, with a good gain of 25% over a 12-month investment horizon. The brokerage suggested the stock at Rs 598, but it is currently trading at Rs 604.
Buy Trent Ltd with a target price of Rs 1330
Trent is India's top retailer, with 400+ outlets and a footprint in a variety of consumer sectors. According to the brokerage, Trent reported its highest ever quarterly revenue in Q2FY22, followed by robust EBITDA margins. On a favourable base, revenue grew 126% YoY to Rs 1020.4 crore (two-year CAGR: 12%). "Trent also reported robust EBITDA margins of 21.7% (Q2FY21: 1.4%, Q2FY20: 16.2%). On account of robust operational performance, PAT came in at Rs 125.6 crore (Q2FY20: Rs 38.3 crore, Q2FY21: (-) Rs 48.1 crore)" the brokerage said.
"Trent has been an exceptional performer with stock price appreciating at ~39% CAGR in the last five years. We value Trent at Rs 1330 based on SOTP valuation" said ICICIdirect.
ICICIdirect has said "During its recent AGM, the management has affirmed its aggressive store opening plans for its fashion format (Westside: 35 & Zudio: 75) in FY22 (outlined CAPEX worth Rs 200 crore in FY22E). Capex trajectory accelerated in H1FY22 with CAPEX up 224% YoY to Rs 68.7 crore. Trent continues to have healthy cash and investments worth Rs 685 crore, which would enable it to tide over the current situation better than peers. We maintain BUY rating on the stock with a revised target price of Rs 1330 (earlier | 1100)."
Buy Dabur India with a target price of Rs 745
Dabur India Ltd is a prominent FMCG company in India, with revenues of over Rs 7,680 crore and a market cap of over Rs 48,800 crore. "Dabur reported healthy results with 10% volume growth, sales were up 12% YoY with strong growth across segments, EBITDA was at Rs 620.7 crore, up 9% YoY, with margins at 22% and consequent PAT was at Rs 505.3 crore (up 4.6% YoY)" said the brokerage.
"Dabur's share price has given 100% return in the last five years (from Rs 298 in November 2016 to Rs 598 in November 2021). We maintain our estimates with expected strong growth propelled through new product, rural distribution & Ayurveda, naturals consumption tailwind. We value the stock at Rs 745 on ascribing 55x FY24 earnings multiple. We continue to maintain our BUY rating on the stock" ICICIdirect has said.
The above stocks are picked from the brokerage report of ICICI Direct. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.