One Buy And One Accumulate, Stock Ideas From KR Choksey

One of the leading brokerages KR Choksey, has seen some potential upside on the equity share price of two companies. The companies are Nestle India Limited and Supriya Lifescience Ltd. The brokerage has suggested investors to accumulate the shares of Nestle and buy shares of Supriya Life science Ltd. In the individual brokerage reports from analysts, the valuation and reasons for the suggestion is explained. The details are given below.

Accumulate shares of Nestle India Limited, with a target price of Rs 21,805 per share

Despite the reduction seen in the quarter 4 revenue of this FMCG company, Nestle India Limited has seen broad based growth across categories and towns. Even the margins of this large cap company has improved sequentially is explained in the analyst coverage report. "The company is seeing the benefit of premiumization which is helping the margins in a time when the smaller units are seeing volume pressure. Nestle's internal cost rationalization programs are helping the company to mitigate the unprecedented inflationary pressures. We like Nestle for its focus on penetration-led growth led by increasing distribution, especially in RURBAN. We continue to like the focus on premiumization, cost rationalization and expect these factors to aid margins going ahead. We expect Revenue, EBITDA and adjusted profit after tax to grow at a CAGR of 10.8%, 18.2% and 18.6%, respectively over CY22-CY24E. We apply price to earnings of 61.7x on CY24Expected earnings per share of Rs 353.2 and arrive at a target price of Rs 21,805 per share (unchanged) with an upside potential of 14.8% from the CMP. Accordingly, we maintain our "ACCUMULATE" recommendation on the shares of Nestle India."

Share price details and market capitalisation of Nestle India Limited

The last traded price of Nestle India stock is Rs 18825.10 per share, it was up by 0.02% on intraday basis. In last one year the stock price has moved up by 4.06%, over three years it has rallied by 13.79% and in fives years it has scaled by 147.91%. Its 52-week high is at Rs 21,053 per share and its low is at Rs 16,000 per share. The company's free float market capitalisation is Rs 67,156.31 crore.

Recently the board of directors of Nestle India has recommended its final dividend for the year 2022 of Rs 75 per equity shares of Rs 10/- each, which equates to 750%. The company directors has set 12th April, 2023 as the record date to pay the final dividend.

Buy shares of Supriya Lifescience Ltd, with a target price of Rs 278/share

Supriya Lifescience Limited is a leading manufacturer of active pharmaceutical ingredients (APIs) established in 1987. The company has reported muted performance on account of multiple macro headwinds, primarily from the Chinese markets and encountered supply challenges. But the analyst of KR Choksey brokerage believes that the pharma company will generate modest EBIDTA growth. " Supriya Lifesciences faced multiple headwinds during the quarter from the Chinese markets and supply challenges; however, same is expected to be stable in the next 2-3 quarters. With its potential to register products in regulated markets, we think the company is in a good position to generate modest topline growth while maintaining stable margins in the upcoming quarters. Currently, it is trading at 22.34x/11.06x on FY24E/25E earnings. In last couple of months, the stock price has corrected drastically due to multiple headwinds including resignations from the senior management team, external uncertainty and Covid in China. We maintain a "BUY" rating on the stock with a revised target price of Rs 278/share, applying PE multiple of 14x on FY25E EPS, giving upside of 26.4%"

Share price details and market capitalisation of Supriya Lifescience Ltd

The last closing price of Supriya Lifescience Ltd stock is Rs 208.35 per share, it is down by 2.34% on intraday basis. In last one year and three years the stock price has tumbled down by -45.44% and -46.62% respectively. Its 52-week high is at Rs 515.35 per share and its low is at Rs 179.10 per share. The company's free float market capitalisation is Rs 536.59 crore.

Disclaimer

The stocks have been picked from the brokerage report of KR Choksey, Greynium Information Technologies and 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.