It was not a great week for the markets, with the Sensex falling on Friday led by global weakness. Here are 2 stocks that investors can buy next week for 27% gains. These stocks are picked from the brokerage report of Sharekhan.
Brokerage firm, Sharekhan is bullish on the stock of Himatsingka Seide with gains of up to 27% on the stock. The company is amongst the largest producers of bed linen products in the world.
"Recently, it hiked prices to mid-single digits and the impact of same would be visible from Q2FY2022. Thus, higher capacity utilisation and better operating efficiencies would help the company achieve an OPM of 20-22% in the near term. Net debt on consolidated books stands at Rs. 2,405 crore and the company expects it to reduce by Rs. 150-200 crore in FY2022.
Sharekhan has increased its earnings estimates for FY2022 and FY2023 to factor in better than earlier margin guidance.
"Himatsingka Seide will be one of the key beneficiaries of rising demand for Indian home textiles in export markets. Leveraging upon its experience in US market and vertical integrated business model, the company is focusing on strengthening its presence in Europe and Middle East (it has tied up with famous brand Disney to sale home textile products in Europe and Africa).
China plus one and other emerging global factors would create incremental opportunities for Indian home textile players. The stock is trading at an attractive valuation of 8.7x its FY2023E earnings. We maintain a positive view on the stock and expect a 27% upside over the next one year," the brokerage has said.
The brokerage is also bullish on the stock of HeroMoto Corp with a price target of Rs 4,030 as against the current market price of Rs 2,702.
According to Sharekhan, the company is well placed to benefit from the adoption of electric 2W vehicles though its strong research and development (R&D), investments in Ather Energy, and strategic partnership with Taiwan-based Gogoro, a global leader in battery swapping network.
"We remain positive on HeroMoto Corp and, thus, maintain a Buy rating on the stock," the brokerage has said.
"As the economy is getting normalised, HeroMoto Corp is expected to benefit from premiumisation of its products, its stronghold in the economy, executive motorcycle segments, and aggressive products offerings in premium bike and scooters segments. The stock is trading at comfortable valuations at price to earnings multiple of 13.1 times and EV/EBITDA multiple of 7.3 times its FY2023E estimates, with attractive dividend yield of 3.6 per cent," 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. The above article is for informational purposes only and is picked from the brokerage report of Sharekhan. Be careful while investing as the Sensex has now crossed 55,000 points. Investors can invest small amounts and avoid putting lumpsum.