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Prabhudas Lilladher Sees 3 Large, Mid Cap Stocks Rising: Recommends Buy For Gains

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Leading brokerage firm Prabhudas Lilladher has recommended investors to accumulate and buy shares of Avenue Supermart, Hindustan Unilever, and Westlife Foodworld for higher gains. If you buy these stocks at today's current market price, you will get maximum 24% return. Check key details below:

1. Buy Avenue Supermart

1. Buy Avenue Supermart

The leading brokerage firm has recommended investors to buy Avenue Supermart with a target price of Rs 4854 apiece. The current market price of the stock is Rs 3906 apiece. If you buy Avenue Supermart now, you will get 24% return. The large cap retail sector stock has given 107% return in last 3-years and 216% return in last 5-years. In last 1-year, the stock has declined 17%.

According to the brokerage house, " Avenue Supermart: D'Mart remains a structural pick given 1) strong position in a consolidated brick and mortar modern retail, which has high entry barriers 2) huge runaway for growth with potential to open 1500 stores 3) expected increase in throughput in ~100 stores opened during Covid period 4) expected margin expansion, as general merchandise and apparel category share rises from 22.4% to pre-covid 27/28% and 5) D'Mart Ready scaling up fast, expect EBIDTA breakeven by FY25. We have reduced Bills cuts/store estimates and consequently FY23/24/25 EPS has changed by 1.3%, -7.3% and 6.8% respectively. We estimate 42% PAT CAGR over FY22-25. Retain 'BUY' with reduced target price of Rs4854 (Rs5121 earlier)."

 

2. Accumulate Hindustan Unilever
 

2. Accumulate Hindustan Unilever

Prabhudas Lilladher has given accumulate rating to the stock with a target price of Rs 2798. The current market price of Hindustan Unilever is Rs 2615 apiece. The FMCG large cap stock has given return of 92% in last 1-year, 34% in last 3-years, and 8% in last 1-year. The company has a market capitalisation of Rs 6,12,092.02 crore.

According to the analyst, "Hindustan Unilever: We expect HUL to stage recovery in profitability led by 1) peaked out input costs and 2) expected pick up in rural demand (35-40% of sales) led by general decline in Inflation. Given sharp decline in prices of palm oil and crude oil, we expect margins to improve from 3Q onwards as benefit of price hikes & low priced RM inventory flows into the system. Structural story remains intact as 1) HUL continues to gain share in key product categories and MT/Online 2) HFD segment is likely to emerge as a key driver of growth, led by distribution gains and small packs and 3) sustained innovation and focus on emerging categories (Hair Conditioners, Liquid Detergents, Liquid Dish wash, Body/face wash, Green Tea, Ice creams). We expect 12.9% Sales and 16.6% PAT CAGR over FY22-25. We assign DCF based target price of Rs2798 (Rs 2827 earlier). Maintain 'Accumulate."

3. Buy Westlife Foodworld

3. Buy Westlife Foodworld

Prabhudas Lilladher has suggested investors to buy Westlife Foodworld with a target price of Rs 854. The current market price of Westlife Foodworld is Rs 769 apiece. If you buy Westlife Foodworld now, you will get 11% return.

The mid cap hospitality sector stock has given 42%, 103% return in last 3-years, and 121% return in last 5-years. The company has a market capitalisation of Rs 11,965 crore.

According to Prabhudas Lilladher, "As per Vision 2027, WFL looks to accelerate store expansion in the range of 580-630 (from 337 in 2Q23) with 40-50 stores/year vs 20-25 stores (200 new stores over 3-4 years). WFL continues to pilot Fried Chicken in western markets to gauge their response along with Gourmet Burgers in South India. Despite full unlocking of economy, convenience channel contribution continues to remain ~2x pre-COVID levels. We expect AUV to increase led by convenience channel sales, new product innovations like Gourmet Burgers, Fried Chicken and sustained scale up of McCafe which shall enable steady growth and margin expansion in coming years. We estimate Sales CAGR of 26.6% over FY22-25 with an EPS of Rs8.0/11.5/15.1 in FY23/24/25. We assign DCF based target price of Rs854 (Rs847 earlier). 'BUY' for long term gains."

 

Disclaimer

Disclaimer

The stocks have been picked from the brokerage report of Prabhudas Lilladher. 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 check with certified experts before taking any investment decision.

 

Story first published: Monday, January 9, 2023, 13:08 [IST]
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