3 Stocks To Buy For Good Gains For Long-term Investors

With the Budget now done, investors would once again focus on the earnings season. Here are three stocks to buy according to Emkay Global post their quarterly numbers.

Buy the stock of UPL

Current market price	Target price
Rs 789	Rs 910

Emkay Global is betting on the stock of UPL for good returns. "Buoyant commodity prices, in-house manufacturing of key AIs and effective RM sourcing aided the Q3 performance. UPL Ltd did its first registration through its Meiji collaboration for Flupyrimin for rice protection in India through its Meiji collaboration, with more registrations planned in Southeast Asia," the brokerage has said.

"We believe UPL Ltd's strategy to expand its Differentiated and Sustainable (D&S) solutions offerings is expected to drive sustainable growth along with margin expansion. Our Mar'23E target price of Rs 910 implies FY24E EV/EBITDA at 8.6 times," the brokerage has said.

Buy HPCL stock

Current market price	Target price
Rs 291	Rs 360

Emkay Global is also bullish on the stock of HCPL. The brokerage has set a price target of Rs 360 on the stock. "We slightly raise FY22/FY23/FY24 EPS estimates by 2%/6%/3%, building in higher GRMs, and roll over valuations from Dec'23E to Mar'24E. We raise our Mar'23 SOTP-based target price by 6% to Rs360, keeping target multiples unchanged. Retain Buy on the stock," the brokerage has said.

"Based on BPCL's marketing inventory loss, we estimate HPCL's blended margin to be down 10-15% qoq (below est), which could be due to losses in LPG. Gross debt (ex-lease liabilities) was down 1% qoq at Rs377.5bn. HPCL's opex was 11% lower than estimated," the brokerage has added.

 

Tech Mahindra

Emkay global has set a target price of Rs 1,900 on the stock of Tech Mahindra.

"We tweaked our FY22-24 EPS estimates by -1.9% to 0.1%, factoring in the Q3 performance, recent acquisitions and higher ETR. We maintain Buy with a target price of Rs1,900 at 25x Dec'23E EPS, considering the improving revenue growth trajectory, dividend payout and reasonable valuations post recent corrections (16% down in 1M)," the brokerage has said.

Stocks trading at a discount to long term averages

Some of the other stocks that could be a good bet for long term investors are shares that are trading at a discount to long term averages. Among these we have names like Tata Steel and JSW Steel. Both these stocks are trading at a discount of at least 40%, when compared to long term averages, thanks to robust gains in commodity prices. 

There are also some stocks that are good on the basis of dividends offered including names like ITC and Bajaj Auto. Being from the NIfty pack they are also safe investment bets. Look for long term investing as opposed to short term gains. 

Disclaimer

Investing in equities is risky and investors must therefore understand the risk. The author and Greynium Information Technologies Pvt Ltd would not be responsible for any losses caused based on the article. The author and his family do not hold shares Tech Mahindra, HPCL or UPL. Investors should exercise caution on account of heightened volatility in the markets currently.