3 Stocks On Hold, Buy Call For 26% Return, Dividend Income: ICICI Direct

Leading brokerage house ICICI Securities has picked 3 stocks to buy and hold. These stocks are Apollo Tyres, Shaily Engineering Plastics, and Hindustan Aeronautics. If you hold and buy these 3 stocks now, you can expect a maximum return of 26% in 12 months. You will also receive dividend income as Hindustan Aeronautics has declared first interim dividend of Rs 20/- per equity share on November 11, 2022. Check key takeaways below:

1. Stock To Buy: Apollo Tyres

The current market price of Apollo Tyres Ltd is Rs 277 apiece with an intraday decline of 6.90%. The company has a market capitalisation of Rs 17,611 crore. The stock's 52-week high is Rs 303 apiece and 52-week low is Rs 165 apiece, respectively. The mid-cap stock has given maximum return of 65% in last 3-years.

ICICI Direct has given buy rating to the stock with a target price of Rs 350. The analyst has given 12 months' time for the stock to reach the target price of Rs 350 apiece. Buy Apollo Tyres today to get 26% return in 12 months.

According to ICICI Direct, "We retain BUY on ATL amid focus on increasing profitability, sweating of assets, calibrated capex spends and gross margin expansion on the anvil. Upgrading our estimates, we now value ATL at a target price of Rs 350 i.e., 6x FY24E EV/EBITDA (earlier target price: Rs 335).

About the stock: Apollo Tyres (ATL) is a leading tyre manufacturer, with operations in India & Europe and an installed capacity of ~7.9 lakh MT per annum. In India, ATL has substantial presence in TBR (31% market share) & PCR space (21% market share).

2. Stock To Buy: Shaily Engineering Plastics

The current market price of the stock is Rs 1636 apiece with market capitalisation at Rs 1500 crore. The stock's 52-week high is Rs 2323 apiece and 52-week low is Rs 1500 apiece, respectively.

The stock has given a maximum return of 147% in last 3-years. It operates in Plastics sector. ICICI Direct has assigned hold rating to Shaily Engineering Plastics with a target price of Rs 1810 apiece.

According to ICICI Direct, "Shaily Engineering's share price has grown by ~2.4x over five years (from ~Rs 678 in November 2017 to ~Rs 1628 levels in November 2022). We maintain our HOLD rating on the stock. We value Shaily at Rs 1810 i.e. 25x on FY24E EPS."

About the stock: Shaily Engineering is into manufacturing high precision injection moulded plastic components and finished goods in home furnishing, healthcare, toys, personal care and automotive components.

3. Stock To Buy: Hindustan Aeronautics Ltd

The current market price of Hindustan Aeronautics is Rs 2682 apiece with 52-week high at Rs 2709 apiece and 52-week low at Rs 1181 apiece, respectively. The company has a market capitalisation of Rs 89,687.74 crore. ICICI Direct has given buy call to Hindustan Aeronautics with a target price of Rs 3300 apiece. If you buy Hindustan Aeronautics today, you will get a 23% return in 1-year.

According to ICICI Direct, "We expect HAL to deliver revenue and EBITDA CAGR of 10.3% and 14.7%, respectively, over FY22-25E. PAT is likely to grow at 14.2% CAGR (FY21-25E). Increase in profitability with strong asset turnover is expected to result in healthy return ratios over FY23-25E. We continue to remain positive and retain our BUY rating on the stock. We value HAL at Rs 3300 i.e. 20x PE on FY25E EPS."

Also, the company has declared first interim dividend of Rs 20/- per equity share on November 11, 2022.

The board of directors of the leading Navratna CPSE (Central Public Sector Enterprises) stated in the BSE filing, "The Board of Directors of the Company at its meeting held today has, inter-alia, approved the Audited Financial Results (Standalone and Consolidated) for the quarter and half-year ended 30th September, 2022. Further, the Board of Directors of the Company has declared first interim dividend of Rs. 20 per equity share of Rs. 10/- each fully paid up for the Financial Year 2022-23." Record date for the payment of first interim dividend will be Monday, the 21st November, 2022.

About the stock: Hindustan Aeronautics (HAL), the largest defence PSU in India, is engaged in design, development, manufacture, repair, overhaul, upgrade and servicing of a wide range of products including, aircraft, helicopters, aero-engines, avionics, accessories and aerospace structures.

Disclaimer

The stocks have been picked from the brokerage report of ICICI Direct. 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 check with certified experts before taking any investment decision.