5 Stocks To Buy Now For Long-term Returns On Which Sharekhan Remains Bullish

Brokerage firm Sharekhan has come-out with a host of research reports, especially post the quarterly numbers. Here are 5 stocks that the brokerage has listed as a "buy" for investors looking to invest for the long-term.

Retain buy on JK Lakshmi Cement, with a revised target price of Rs 750

For the JK Lakshmi Cement stock, Sharekhan has a buy call with a price target of Rs 750.

According to Sharekhan, JK Lakshmi Cement continued to show better operational profitability led by its focus on optimizing the sales mix based on various key parameters. "Additionally, its focus on increasing renewable power usage and reducing lead distance is expected to derive cost efficiencies leading to improvement in operational profitability going ahead. Its expansion plans at UCW remain largely on track barring a few months' delay while it has chalked out its vision of achieving 30mtpa capacity by 2030. We introduce our FY2025E earnings in this note. JKL is currently trading at an undemanding valuation of EV/EBITDA of 6.5x/5.5x its FY2024E/FY2025E earnings. Hence, we retain a Buy on the stock with a revised price target of Rs. 750 rolling forward our valuation multiple to September 2024 earnings," the brokerage has said.

Bluestar

Another stock that Sharekhan has a buy call is the stock of Bluestar. "Blue Star is expected to outperform the industry as well as its peers driven by a strengthening distribution network, rising market share, and improving product mix. Besides, scale-up in commercial refrigeration products, backward integration, increase in in-house manufacturing would also aid growth. Similarly, the EMPS segment's growth prospects are brighter given a strong order book and continued traction in order inflows in both domestic and international markets. We expect revenue/PAT to clock a CAGR of ~21%/34% over FY2022-2025E. At CMP, the stock trades at 33x September FY2024E EPS. We maintain our Buy rating on the stock with a revised price target of Rs. 1,410," the brokerage has said.

Coromandel International

For the stock of Coromandel International, brokerage firm Sharekhan has a price target of Rs 1155. "The recent decline in phosphoric acid prices, softening of other key input cost and government subsidy support has improved margin outlook for fertilizer business while CPC business would benefit from product launches. Moreover, higher adoption of complex fertilisers (as compared to urea) by farmers bodes well for Coromandel. We expect revenues/PAT to grow at 12%/16% over FY2022-FY2025E along with high RoE/RoCE of 23%/29% in FY25E. Improved earnings outlook and recent correction in the stock price makes valuation of 13x/11.6x FY24E/FY25E EPS reasonable. Hence, we upgrade Coromandel to Buy (from Hold) with an unchanged price target of Rs. 1,155," the brokerage has said.

HPCL

For HPCL, the broking firm has set a price target of Rs 250. "We believe that H1FY23 would factor in the worst for OMCs and a gradual normalisation of refining & marketing margins would lead to overall earnings recovery. Moreover, HPCL's valuation of 3x its FY2024E EPS and 0.7x its FY2024E P/BV is attractive and FY24E DPS implies a 10% dividend yield. Hence, we maintain a Buy on HPCL but with a lower price target of Rs. 250 (reflects a lower P/E multiple given volatile earnings environment)," the brokerage has said.

City Union Bank

Sharekhan has a buy on the stock of City Union Bank, with a price target of Rs 230.

"At current market price, City Union Bank trades at 2.1x and 1.7x its FY2023E and FY2024E ABV, respectively. We believe valuations are likely to inch up on strong earnings outlook led by margin improvement & lower credit cost given the benign credit cycle thereby improving return ratio profile. With improving asset quality matrix, higher recoveries, reduction in slippages, lower credit costs, higher LCR and higher capital levels, the bank is well positioned to gain market share on the business front. We see upside risk to margins due to higher rate cycle and believe the bank could deliver superior return ratios among small-mid cap private banks. We maintain our Buy recommendation on the stock with a price target of Rs. 230," the brokerage has said.