Buy Two Small Cap Stocks From Automobile Sector, Shares Can Surge 29%, Says Sharekhan

Sharekhan has come up with two investment ideas in automobile stocks, these two stocks are Suprajit Engineering Ltd and GNA Axles Ltd. The brokerage has assigned "Buy" on these two small-cap stocks for gains of up to 29%. Check below to know more:

1. Suprajit Engineering Ltd

Stock Outlook - Current Market Price, Returns, Potential Upside, Market Cap

The brokerage has assigned a "buy" on the stock with a target price of Rs 403/share. If you buy the stock at the CMP, it can fetch up to 12% gains. The CMP of the stock on NSE is Rs 360.55/share.

Its 52 week low is 299/share and 52 week high is Rs 398.40/share, respectively. The stock has a market capitalisation of Rs 4,999.39 crore.

The stock has fallen 7.6% in 1 week and gained 3.32% in 1 month. It gained 14.13% in 1 year. It gave the highest 123.87% positive return in 3 years. In 5 years it gained 27.01%.

Buy with an unchanged PT of Rs.403/share

According to the brokerage, Amidst geopolitical risk, inflationary pressure in Europe and slowdown in the North American automotive market the management has shared a positive outlook in Q4Fy23 for all its segments except SENA (non-automotive division). SENA division is expected to remain laggard in Q4FY23 due to a slowdown in the non-automotive market in North America. With the turnaround of the LDC division and soft commodity prices, the company continue to consolidate its European business to eliminate margin volatility in the medium term. "The stock trades at a P/E multiple of 17.1x and EV/EBITDA multiples of 9.8x its FY25E estimates, trading below its historical average. We retain our Buy rating on the stock with an unchanged price target (PT) of Rs.403," the brokerage has said.

2. GNA Axles Ltd.

Stock Outlook - Current Market price, Returns, Potential Upside, Market Cap

Sharekhan has placed a "buy" on the stock of GNA Axles with a target price of Rs 1,121/share. According to the given target price, if you buy the stock at the CMP, it is likely to give a return of up to 29%. The stock is currently trading at Rs 871.50/share.

Its 52 week low is 464.80/share and 52 week high is Rs 953/share, respectively. The stock has a market capitalisation of Rs 1,871.25 crore.

It has fallen 4.27% in 1 week and gained 30.39% in 3 months. It gained 76.96% in 1 year. It gave multibagger return of 459.77% in 3 years and 103.29% in 5 years, respectively.

Buy with an upward revised PT of Rs. 1,121/share

Sharekhan said, "Given the diversified geography mix and strong clientele, we believe GNA is well positioned to sustain its revenue at higher levels. We expect the company to deliver sustainable EBITDA margin in the coming period. The stock is trading at P/E of 11.9x and EV/EBITDA of 6.7x its FY2025 estimates. We value the stock at 14.5x FY2025E EPS and have arrived at a PT of Rs. 1,121 on expectations of sustainable operating performance in the coming years."

Disclaimer

The stocks have been picked from the brokerage report of Sharekhan. 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.