5 Quality Small Cap Stocks Recommended Buy In December By Top Brokerages, Claims Gains Up To 81%

1. Greenpanel Industries Limited

BoB Capital Markets rated Greenpanel Industries Limited (GREENP) "Buy" in its December 6, 2022 report. The brokerage assigns a target price of Rs 595/share to the stock. It sees 81% potential upside in the stock from its current level.

On NSE, the stock last traded at Rs 330/share, down 2.70% from its previous close. The stock has fallen 5.23%. In the last 1 week, 4.2% in 1 week and 24.23% in the last 3 months, respectively. In the past 1 year, it gave 10.92% negative returns. It has given a whopping 664.77% multibagger returns over the last three years. Since its listing on October 23, 2019, it has provided 715.82% multibagger returns to shareholders.

 
BoB Capital Markets said, "GREENP is trading at ~15x FY24E EPS which is attractive given GREENP's strong growth prospects, leadership position in MDF, and an improving balance sheet and return ratios. Management expects Q3 to be a dull quarter given increasing MDF imports and a lull in plywood demand, but is hopeful of demand recovery in Q4. We continue to value GREENP at 23x FY24E EPS (a 34% discount to CPBI) and retain BUY rating with TP of Rs 595. " 

2. Tarsons Products Ltd

Hem Securities in its 8 December 2022 report on Tarsons Products Ltd, assigns a "Buy" to the stock with an estimated target price of Rs 1,157/share. Given the stock's current market price and the brokerage's target price, the stock could give a healthy return of up to 71%.

The Current Market Price (CMP)  stock on NSE is Rs 677.20/share, down 2.95% from its previous close. The stock in the last 1 week has fallen, giving 7.88% negative returns. In the past 3 months, it has fallen 16.45%. In the past 1 year, it has given 12.61% positive returns. Since its date of listing on 26 November 2021, the stock has given 17.26% negative returns on investments. 

Hem Securities has said, "Company has reported weak quarter however if we exclude Covid related revenue then company has reported strong revenue growth and co is expected to maintain 18% CAGR for Fy 23-25. Co. recently took price hike and the revenue contribution from the same will be reflected in next few quarters. Margins are expected to improve as raw material prices has stabilised and is expected to remain in range for next few quarters. Company is maintaining highest margin in industry. We initiate a "BUY" rating on the stock and value the stock at 42x FY24E earnings to arrive at the target of ₹1157." 

3. Mahindra Lifespace Developers Limited

Mahindra Lifespace Developers Limited (MLIFE) rated a "Buy" by Motilal Oswal in its report, which was published on December 7, 2022. The brokerage assigns a target price of Rs 365/share to the stock. According to the brokerage's given target price, the stock could jump up to 49% from its current level.

The stock fell by 0.51% to close at Rs 243.15 per share, the current market price. In the past 3 months, it moved down 21.42%, whereas, in the past 1 year, it moved up by 60.85%. In the past 3 and 5 years, it has given 186.89% and 137.61% multibagger returns, respectively. 

Motilal Oswal said, "MLIFE's existing Residential and IC&IC segment pipeline contributes INR50b to its NAV. At the current enterprise value of INR62b, a large part of the growth from the unlocking of the Thane land and upcoming project additions is not priced in yet, which are likely to be key re-rating triggers. We value MLIFE based on SoTP, wherein i) the Residential business is valued at a DCF of four-year cash flows, using a WACC of 14%, and a terminal growth rate of 3%; ii) NAV for the IC&IC segment is calculated assuming a monetization timeline of 12-15 years, discounted at a WACC of 14%, and iii) market value of the land bank.  Excluding its FY23 net debt of INR3b (at MLIFE's share), we arrive at a NAV of INR85b. Applying zero discount to its NAV, we arrive at a TP of INR550 with a 44% upside potential. We reiterate our Buy rating on the stock. 

4. Prince Pipes and Fittings Limited

IDBI Capital in its report published on December 15, 2022, rates Prince Pipes and Fittings Limited's stock "Buy" with a target price of Rs 620/share. According to the brokerage, it could jump up to 45% from its current level.

On NSE, the stock last traded at Rs 580.35/share, 3.73% down compared to its previous close. It has given 6.49% negative return in the last 1 week. It has given 5.08% positive returns in the last 1 month. In the past 3 months, it has given 2.29% negative retruns. In the last 1 year, it gave 16.59% negative returns, respectively. Since its listing date, 30 December 2019, it has given 247.72% multibagger returns. 

The brokerage said, "We like Prince Pipes & Fittings Ltd. (Prince Pipes) amongst the organized players owing to its 1) legacy of over 3 decades in the business, 2) comprehensive product portfolio across 4 key polymers, 3) strategically located manufacturing plants, 4) extensive distribution reach, and 5) consistent efforts on creating strong brand equity. We initiate coverage on Prince Pipes with a BUY rating and TP of Rs842, assigning 35x PER on FY25E."

5. Godawari Power & Ispat Limited

Edelweiss Wealth Research in its report, on December 08, 2022, on Godawari Power & Ispat Limited placed a "Buy" on the stock with a target price of Rs 550/share. The brokerage claims a potential upside of 62% from its current level. 

The stock last traded at Rs 340.90/share on NSE, down 7.33% from its previous close. It has given 41.66% positive return in the last 1 year. Whereas, in the past 3 and 5 years, it has given 525.94% and 385.61% multibagger returns, respectively. 

The brokerage in the report said, "We expect the FY24 EBITDA and cash flow to be INR 1,700cr and INR 1,100cr, respectively, and cash balance to be INR 930cr, suggesting 2.2x/4x EV/EBITDA and EV/OCF, which is undemanding valuation. Furthermore, the FY24E cash balance will be 20% of the Mcap." 

Disclaimer

The stocks have been picked from the brokerage report of 5 brokerages. 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.