On Tuesday, global share markets and US bond yields fell as data showed US inflation slowing, creating new questions about when the US central bank will start tapering its asset purchases.
The following two stocks are recommended by ICICI Direct for gains of up to 25% in a year.
Minda Corporation: Buy with a price target of Rs 168
Minda Corporation (MCL) principally works with domestic automakers in two areas: mechatronics and aftermarket, and information and connected systems.
"MCL's share price has grown at ~3% CAGR from Rs 110 as of mid- 2016, recording meager outperformance over the Nifty Auto Index. We retain BUY rating amid healthy growth prospects over FY21-23E. Target Price and Valuation: We value the company at a revised target price of Rs 160 i.e. 20x P/E on FY23E EPS, the brokerage has said.
While making the recommendation, the company traded at a price of Rs. 128 and the target suggested by the brokerage is Rs. 168, with an upside of 25%.
Minda Corporation: Key triggers for future price performance
- With considerable new orders won (Rs 2,490 crore lifetime orders in FY21), OEM recovery will boost volume recovery across MCH and ICS in the medium term.
- Ensuring a robust income outlook beyond FY23E
- Product profile is mainly unaffected by EV danger; aggressively developing EV-specific products such as DC-DC converters, BMS, and motor controllers, among other things.
- It has received orders from both established and emerging EV manufacturers, like Ola Electric.
- Expect a 15.1 percent net sales CAGR from FY21 to FY23E, with margins of 11% in FY23E.
Alternative Stock Suggestion
In addition to MCL, ICICI Direct favors Apollo Tyres in their auxiliary coverage. India is a country in South Asia. Benefits of CV resurrection include debt reduction and greater return ratios. Suggested to BUY with target price of Rs 275.
Buy Mahindra Lifespace Developers with target price of Rs 325
Mahindra Lifespace Developers (MLD) is the Mahindra Group's real estate and infrastructure development arm. The company was trading at Rs. 281 when the recommendation was made, and the brokerage's target price is Rs. 325, with a 16 percent upside.
According to the brokerage, the corporation has laid up five-year objectives, with the goal of reaching a sales value of Rs 2500 crore by FY25. It aims to complete four land transactions every year, totaling Rs. 2,000 crore in sales potential.
"MLD's share price has grown at ~16% CAGR over the past five years. We like MLD given its strong parentage, the management's focus on expanding its overall scale of operation and a comfortable balance sheet. The new land purchases are expected to enable it to scale up its residential business. The change in management and execution has started to show initial signs of transformation. We maintain our BUY rating on the company. Target Price and Valuation: We value MLD at Rs 325/share," the brokerage has said.
Mahindra Lifespace Developers: Key triggers for future price performance
- Unsold inventory and a strong launch pipeline with a potential cash flow of Rs 2,593 crore
- Huge captive land bank and expansion plans to invest Rs 500 crore per year on land with the potential to create Rs 2,000 crore in yearly sales
- Recent management changes have provided a varied range of experience and scale.
- Integrated cities and industrial clusters (IC & IC) businesses will gain from the PLI/manufacturing drive. Borrowing costs will be the lowest among peers, giving them a significant competitive edge.
" We like MLD given its strong parentage, the management's focus on expanding its overall scale of operation and a comfortable balance sheet. The new land purchases are expected to enable it to scale up its residential business. The change in management and execution has started to show initial signs of transformation. Hence, we maintain the BUY recommendation with a target price of Rs 325/share. The increase in target price is owing to higher premium of 35% (vs. 30% earlier) to our NAV estimates for growth potential, the brokerage has said.
Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage houses are not liable for any losses caused as a result of decisions based on the article. Please consult a professional advisor.