3 Midcap & Small Cap Stocks That Can Give Return Up To 73%, HDFC Securities Says Buy

HDFC Securities picked 3 small and midcap stocks to buy for robust returns. These 3 stocks are AGS Transact Technologies Ltd, Sobha Ltd, and Kotle-Patil Developers Ltd. The brokerage is bullish on the stocks and claims a potential upside of up to 73% from their current level. Here are the key takeaways from the report.

AGS Transact Technologies Ltd.

The brokerage has estimated a target price of Rs 105 apiece for the stock of AGS Transact Technologies with a "Buy" call. The given target price indicates a potential upside of 73% from the current level. The stock on NSE is currently trading at Rs 60.90 apiece.

The stock since its listing on 31 January 2022 has declined 62.19%. It has given 7.5% in 1 week. It fell 22.99% in 1 month. In the past 1 year, it declined a massive 59.05%. This is a small-cap IT Enables Services sector stock with a market capitalisation of Rs 739.34 crore.

HDFC Securities said, "We cut revenue estimates by ~6.8/7.4% and EPS estimates by -7.8/6.9% for FY24/25E to factor in revenue miss. We maintain BUY on AGS with a target price of INR 105, valuing the stock at 12x Sep-24 EPS."

Sobha Ltd.

The brokerage has assigned a "Buy" on the stock of Sobha with a target price of Rs 935 apiece, implying an upside of 61% from its current level. The stock's current market price on NSE is Rs 579.75 apiece.

It has fallen 0.56% in 1 week, and 1.48% in 1 month, respectively. It has fallen 33.74% in 1 year. It has given 46.01% in 3 years. In 5 years it gave 2.22% positive return. It is a midcap Real Estate sector stock having a market capitalisation of Rs 5,516.23 crore.

According to the brokerage, EBITDA margin was affected by the higher-than-expected cost in the contractual business; SDL expects to see normalisation in EBITDA margin after Q4FY23. "We maintain BUY with an unchanged TP of INR 935, "the brokerage has recommended.

Kotle-Patil Developers Ltd. (KPDL)

HDFC Securities recommends "Buy" the stock of KPDL for a target price of Rs 380 apiece. The given target price indicates a potential upside of 40% from its current level. The stock is trading at Rs 272.10 apiece on NSE.

The stock has fallen 1.82% in 1 week, and gained 4.41% in 1 month, respectively. In 1 year it has fallen 8.22%. In 3 years it gained 14.27%. In 5 years it declined by 16.61%. The stock operates in the Real Estate sector having a market capitalisation of Rs 2,063.14 crore. It is a small-cap stock.

According to the brokerage, KPDL entered into an inventory sale agreement for its Pimple Nilakh project with Marubeni Corp of Japan for a consideration of INR 2bn. The deal is expected to close by Apr'23. KPDL will use the proceeds from this deal towards BD. Also, its comfortable liquidity position with net D/E at 0.21x (board approval of 0.50x) paves the way for accelerated BD activities. "We maintain BUY, with an unchanged SOTP-based TP of INR 380," the brokerage recommended.

Disclaimer

The stocks have been picked from the brokerage report of HDFC Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.