For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

4 Stocks To Buy For Long Term According To ICICI Securities

|

The Nifty is above 18,200, with PSU banks, IT, and metal stocks leading the way. Crompton Greaves Consumer, TCI Express, and Bata India are among the stocks recommended by ICICI Direct for purchase. The brokerage is optimistic about the stocks for the following reasons:

 

Crompton Greaves Consumer- Strong margin amid challenging scenario
 

Crompton Greaves Consumer- Strong margin amid challenging scenario

Crompton Greaves Consumer (CGCEL) is a leading fast-moving electrical goods (FMEG) company in India, with a strong presence in electrical consumer durables (78 percent of revenue) and lighting (22 percent of revenue).

Crompton Greaves Consumer stock has a target price of Rs. 525, which represents a 17 percent increase from current levels.

Q2FY22 Results of Crompton Greaves Consumer

  • Revenue was in line with expectations, with a positive margin surprise.
  • The ECD segment had an 18% increase in revenue year over year, bringing total revenue to Rs 1385 crore. In Q2, price increases ranged from 3% to 4% year over year.
  • Price increases, a stronger product mix (a 45 percent YoY increase in the premium fan), and cost-cutting efforts all helped to keep the EBITDA margin at 15.5 percent in the second quarter.
  • PAT increased by 12% year on year to Rs 159 crore, owing to improved margins and topline growth.

Target and Valuation

"GCEL's share price has grown by 2.5x in the past five years (from ~Rs 184 in October 2016 to ~Rs 450 levels in October 2021). We maintain our BUY rating on the stock Target Price and Valuation: We introduce FY24E estimates and roll overvaluation at FY24 valuing the company at Rs 525 i.e. 40x P/E on FY23E EPS," the brokerage has said.

TCI Express- Focus on pan-India presence, newer service offerings

TCI Express- Focus on pan-India presence, newer service offerings

TCI Express is a leading asset-light B2B express logistics provider with 28 sorting centres and 800+ owned pan-India centres spanning 40000 pick-up and delivery points.

TCI Express stock has a target price of Rs. 1950, which represents a 19 percent increase from current levels.

Q2FY22 Results of TCI Express

  • Sorting centers are on schedule for commissioning, and the results are on target.
  • Revenues increased by 28% year on year to $ 273 crore.
  • Due to lower higher utilisation and better cost control initiatives, EBITDA climbed 39 percent YoY to $ 45 crore, with margins of 16.6 percent (vs. 15.3 percent in Q2FY21).
  • Due to good operating performance, PAT increased by 45 percent to Rs 34 crore.

Target and Valuation

"Building pan-India owned branches and sorting centres in every major city supported by IT enabled transportation infrastructure is expected to build a strong entry barrier in the B2B division. We remain positive on the stock and maintain our BUY recommendation. Target Price & Valuation: We value the stock at Rs 1950 i.e. 37x P/E on FY23E EPS," the brokerage has said.

According to ICICI Direct, TCI Express's newer asset-light B2B products, such as Rail express, Pharma Cold Chain, and C2C express, are expected to contribute 25% of the topline, up from 15% currently. These operations are expected to boost consolidated EBITDA margins to 20% or higher.

Bata India- Change in product mix to boost revenue growth

Bata India- Change in product mix to boost revenue growth

Bata India is a key player in the Indian footwear market, with a presence in the men's, women's, and children's categories.

Bata India stock has a target price of Rs. 2380, which represents a 21 percent increase from current levels.

"Bata has, over the last one year, delivered ~48% return whereas Relaxo delivered 101% returns owing to increased market share due to enhanced consumer preference towards open footwear. Strong revenue growth coupled with recovery in margin profile would enable Bata to reduce the valuation gap with Relaxo. Target Price and Valuation: We maintain our BUY recommendation on the stock and value Bata at Rs 2380 i.e. 50x FY24E EPS," the brokerage has said.

According to brokerage, on a net basis, we anticipate the company adding 240 locations in FY22-24E, bringing the total number of outlets to 1765. Bata is also expanding its franchise network in Tier III-V cities, with 64 new franchise stores added in FY21, bringing the total number of franchise stores to 234. It plans to grow the franchisee store share to 30% during the following two years.

Multi Commodity Exchange; Market leadership, options volume to aid earnings

Multi Commodity Exchange; Market leadership, options volume to aid earnings

With a market share of 93 percent in commodity futures turnover, MCX is the market leader in India's commodity derivatives exchanges.

MCX stock has a target price of Rs. 2000, which represents a 19 percent increase from current levels.

Results

  • The drop in ADTO at MCX had an impact on revenue and earnings.
  • Due to increased margin requirements, average daily futures turnover (ADTO) fell 32% YoY to | 25797 crore.
  • Option ADTO grew from Rs 1900 crore to Rs 6023 crore in the last quarter.
  • Operational revenue is down 30% year over year, while other income is down 10%.
  • Earnings of 33.2 crore, down 16.8% quarter-on-quarter and 43 percent year-on-year.

Target and Valuation

"MCX's share price has grown by ~1.7x over the past five years (from ~| 1054 in July 2016 to ~| 1,798 levels in October 2021). Being a market leader in commodities exchange and a beneficiary of the increase in options volume, we retain our BUY rating on the stock. Target Price and Valuation: We value MCX at ~46x core FY23E EPS and net cash and maintain our target price at Rs 2000," the brokerage has said.

Disclaimer

Disclaimer

The above stocks are picked from the brokerage report of ICICI Direct. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

Read more about: stocks to buy icici direct
Company Search
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X