Ashika Research Picks Two Multibagger Stocks With Accumulate Rating, Sees Robust Returns In 2023

Leading brokerage firm Ashika Research picks two large-cap and midcap stocks in its December 23, 2202, weekly report. These stocks are Apollo Hospital Enterprise Ltd and KPIT Technologies Ltd. Both the stocks have given multibagger returns on long-term investment tenors. Here are the highlights of the report:

Apollo Hospital Enterprise Ltd

Apollo Hospital is a large-cap healthcare services sector stock having a market capitalisation of Rs 67,580.95 crore. Ashika Research has placed an "Accumulate" rating on the stock of Apollo Hospital Enterprise with a target price of Rs 5,225 per share. It sees a potential upside of 12% from its current level. The current market price of the stock is Rs 4,700.15 apiece on NSE.

The stock in the past 1 week moved up 2.96% and in the past 1 month by 2.06%, respectively. In 3 months, it moved up 6.38%. However, over the past 1 year, it gave 3.64% negative returns. It has given 239.06% multibagger returns in the past 3 years and 298.81% in the past 5 years, respectively.

Apollo Hospital -Brokerage's comments

The stock remained a key outperformer during the week as it held its 50 day moving average throughout the week while Nifty corrected indicating resilience. Price action on the weekly chart formed sizeable Bull candle that indicating strong buying demand at key support of 4525-4550. The said support level is further validated as it coincided with the lower band of rising channel. Momentum oscillator generated positive cross over indicating momentum returning in the stock. price action is also backed by volumes indicating elevated participation. Hence, the stock can be accumulated for an upside target of 5225.

Apollo Hospital Enterprise Ltd posted an overall satisfactory set of numbers with improving operational metrics. It reported improvement in overall revenue primarily on account of higher matured hospital revenue and pharmacy business. Hospital business was aided by substantial rise in in-patient volumes and increase in ARPOB across regions in the 1HFY23. Pharmacy growth accelerated with store expansion. There was net addition of 473 stores in H1FY23.

Online pharmacy business grew 3 times in H1FY23 and is expected to maintain high growth trajectory. As the overall occupancy is just 68% there is a significant room for growth. However, for the medium-term, company is in an investment phase and plans to add 2000 beds with a capex of Rs 3000 crore. Positive on Apollo Hospital given the good surgical mix and rebound in international business to improve ARPOB.

KPIT Technologies Limited

Ashika Research picks KPIT Technologies to invest. It is an IT Sector stock having a market capitalisation for Rs 17,831.68 crore. The brokerage has given a target price of Rs 795/share to the stock for 23% potential upside from its current level. The current market price of the stock is Rs 650.45/share on NSE. The shares in the week moved down 7.42%. It has fallen 10.53% in the last 1 month. Over the past 1 year, it gave 26.6% positive returns. In the last 3 years, it gave a whopping 619.13% multibagger returns. Since the date of listing on 22 April 2019, it gave 577.59% multibagger returns.

KPIT Technologies - Brokerage's views

KPIT Technologies 2QFY23 numbers came in line with Street expectations, led by a strong show in connected solutions and electric powertrain. The constant currency revenue growth stood at 8.3% sequentially; 27% on a YoY basis. KPIT's deal win was strong with a total TCV of $142 million and the deal were mostly in the powertrain domain. In addition to the TCV, the management indicated a strong deal pipeline, including two mega engagement.

KPIT has revised its FY23 revenue & EBITDA guidance factoring in the Technica acquisition and the possibility of organic growth. The company now expects a 23% plus organic revenue growth, in CC terms, up from 18-21% guided previously. On the margin side, the management has upped the EBITDA margin guidance by 50 bps to 18.5 -19% on improvement in realisation. Management is also confident to bring it down to below 20% in the third quarter.

The stock has been on a secular uptrend and is on the verge of generating a breakout from its multi year high. Presence of positive divergence in oscillator in daily time frame is likely to propel the stock to head higher. Price correction on the last trading day of the week provides a favourable risk reward scenario as it is presently hovering near the 38.2% retracement level of the entire rally since May'22. Hence one can expect the stock to head initially towards 795 levels as it happens to be the previous swing high of jan'22.

Disclaimer

The stocks have been picked from the brokerage report of Ashika Research. 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.