Markets have begun the year on a buoyant note. Here are select stocks that brokerages are recommending investors to buy.
Gateway Distriparks (GDPL)
Motilal Oswal has recommended buying GDPL (Gateway Distriparks Limited ) with a target price of Rs 313. Motilal Oswal is bullish as per its research report dated December 27, 2016.
GDPL was incorporated and got the certificate of commencement of business on October in 1994.
"GDPL trades at 20 x FY18E and 16.3 x FY19E earnings (adjusted for Blackstone's 49% stake in GRFL), which we believe makes the stock attractive, given 460bp RoE improvement over FY16-19E. We arrive at a TP of INR 313 (upside of 35%), valuing CFS business at 12x FY19E earnings, 40% stake in Snowman at 50% discount to market value, and rail segment at 15x FY19E EV/EBITDA (premium to Concor). Maintain Buy, " the brokerage firm has said in its research report.
ICICI Direct has recommended to buy Indian Bank with a target price of Rs 275.
In mid-sized Public Sector banks, with superior fundamentals given its relative strength Indian Bank is well placed with low cost deposit and ability to produce higher Net Interest Margins.
In asset quality terms when compared to the competitors Indian Bank is better, because of its relatively higher exposure to SEBs, and lower exposure to stressed sectors which have been largely restructured with sufficient capital.
"On a relative basis, Indian Bank has emerged as a strong performer with stronger CAR, healthy asset quality and better return ratios. Consequently, the bank is commanding a premium compared to peers. With better earning visibility (PAT CAGR estimated at 51% to Rs 1621 crore in FY16-18E), premium valuations are expected to sustain ahead. Therefore, we remain positive on the stock maintaining our growth projection. We maintain our target price at Rs 275/share, valuing the stock at a target multiple of 1.1x FY18E ABV. However, with the recent correction in the stock price, we upgrade the stock from HOLD to BUY, " the firm has said in its research report.
Solar Industries (SIIL)
K R Choksey has recommended to buy Solar Industries India Limited (SIIL) with a target price of Rs 901. K R Choksey has valued Solar Industries Limited common stock on PE terminology and have assigned a PE multiple of 30x. "SIIL over the last two years (FY15, FY16) has traded at an average forward PE of 26x. Considering its foray in defense, significant entry barriers, increasing mining & infrastructure activities and increasing penetration overseas should prove a substantial value trigger for SIIL. We value the company at 30X FY19E earnings of INR 30.03 and initiate with "BUY" recommendation arriving at a target price of INR 901. At CMP of INR 659, SIIL trades at 30.9x FY17E EPS of INR 21.3, 25.7x FY18E EPS of INR 25.7 and 21.9x FY19E EPS of INR 30.03", the brokerage firm has said.
Vaibhav Global (VGL)
Nirmal Bang has recommended to buy Vaibhav Global with a target price of Rs 353. Vaibhav Global Limited (VGL) is a multi-national electronic retailer, wholesaler and manufacturer of fashion jewelry and lifestyle accessories. From last two years VGL has taken various steps including introduction of Budget pay (EMI), allowed return of goods, launch of mobile app.
"We continue to like the asset light business model of VGL and we believe that company has reached an inflection point. We like the proactive management. We expect the company to report muted volumes in FY17 however show improvement from FY18. Due to fixed cost heavy business model, we expect EBITDA margins to increase higher. VGL is trading at a PE of 13.1x on our FY18E earnings which we believe gives an attractive opportunity. We recommend BUY on the stock with a target price of Rs 353 (18x FY18E)," Nirmal Bang has said in its research report.
Glenmark Pharma (GNP)
Axis Direct is bullish in Glenmark Pharma.
Glenmark is a pharmaceutical company in India and a research driven global pharmaceutical organization focused on discovering novel molecules and developing high-quality generics and specialty products for markets across the globe. It has 17 manufacturing facilities across 5 countries and 5 R&D centers around the world engaged in discovery of novel biological and chemical entities. It plans is to scale-up complex gx portfolio by strengthening derma, respiratory pipeline and recently in-licensed deals. It plans to file 9 NDA/ BLA across its specialty and novel pipeline with focus on respiratory, oncology and derma. it expects out-licensing deals to pick up which would help in funding its specialty & novel R&D pipeline.
"Despite sector headwinds, GNP's improved visibility on R&D initiatives positions it for 15-20% rev. growth coupled with margin expansion. We thus raise TP to Rs 1,100 (20x Sep'18E EPS; 19x earlier). BUY, Axis Direct has said in its research report.
The article is not a solicitation to buy, sell in securities or other financial instruments. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author, along with the brokerages, who have done research do not accept culpability for losses and/or damages arising based on information in this article. The author and his family do not own any shares in the above mentioned stocks.