4 Stocks To Buy Next Week As Recommended By Top Broking Houses

Markets have been inching lower on the back of easing worries on the inflation front. The Sensex and the Nifty both rallied following on Friday, following spectacular gains in the US markets. Here are a few stocks that you could buy next week, as recommended by top broking houses.

Buy Muthoot Finance

According to Prabhudas Lilladher, overall it was a decent set of numbers from Muthoot. "Although gold AUM growth remains sluggish and below our expectation, yields bottoming out is a positive. We would await management commentary on gold AUM growth going forward, competition intensity and pricing of gold loans. Asset quality continues to improve. We have BUY rating on the stock of Muthoot Finance with target price of Rs 1,431," the brokerage has said.

Prestige Estates: Buy for gains of 20%

According to Sharekhan, Prestige Estate Projects continued to report strong performance in terms of pre-sales for Q2FY2023 at Rs. 3511 crore (up 66% y-o-y, up 17% q-o-q) aided by Bangalore projects (75% share), Mumbai (12%) and Hyderabad (9%). "The collections remained equally strong at Rs. 2603 crore (up 68% y-o-y, up 21% q-o-q). It launched 7.39 msf of projects and completed 2.58msf. Net debt marginally increased by Rs. 128 crore q-o-q to Rs. 4047 crores although it remained below its 0.5x mark D/E," the brokerage has said.

"The company's aggressive expansion in the annuity portfolio is expected to generate a multi-fold increase in rental income providing steady state cash flows. The company's leverage remains under control, aided by strong cash flow generation from a residential portfolio. We have introduced our FY2025E earnings in this note. Hence, we retain our Positive view on the stock of Prestige Estates with a potential upside of 20%," Sharekhan has said in its report.

Sudarshan Chemicals: price target of Rs 430 on the stock

On Sudarshan Chemical Industries, Sharekhan has a hold call. "Weak demand amid high raw material, logistics and energy costs would mean margin pressure and thus we expect PAT to decline sharply 47% in FY23. We maintain our Hold rating on SCIL with a revised PT of Rs. 430 (lowered to reflect cut in earnings estimate) as volume/margin pressure would keep earnings outlook subdued and we see limited upside from the current market price. At current market price, the stock trades at 39.4x/17.3x its FY2023E/FY2024E EPS," the brokerage has said.

Sudarshan chemicals: Quarterly performance subdued

Q2FY23 performance was subdued with a 4.7% q-o-q decline in revenues to Rs. 528 crores, due to pressure on pricing and 9% q-o-q decline in volumes. "OPM at 8.1% (down 250 bps y-o-y; up 64 bps q-o-q) was in-line with our estimate of 7.9% as sharp miss in gross margins (38.7% versus our estimate of 41%) was offset by benefit of operating leverage. PAT of Rs. 4.5 crore (down 80% y-o-y; down 36% q-o-q) was 57% below our estimate of Rs. 10 crore due to higher-than-expected interest and depreciation and lower-than-expected other income," Sharekhan has noted.

Wonderla Holidays: Buy for a price target of Rs 425

Wonderla Holidays registered yet another quarter of strong performance in Q2FY2024 with footfalls remaining high in a seasonally weak quarter. The management is confident that footfall will maintain a good growth momentum due to pent-up demand and various promotional events conducted by the company to attract more footfall. This will boost profitability in FY2023/FY2024. The company plans to add more parks to its portfolio, which will further aid in growth. The stock is currently trading at 11.3x/9.8x its FY2023E/FY2024E EV/EBITDA. We like the management's focus on regaining footfall, stringent cost management, and maintaining a lean balance sheet in an uncertain environment. "We maintain our Buy recommendation on the stock of Wonderla Holidays with an unchanged price target of Rs. 425," the brokerage has said.