Sharekhan Bullish On 2 Small Cap Stocks Showing Potential To Surge, Buy

Sharekhan has recommended investors to buy 2 stocks showing potential to surge. These two stocks are Insecticides (India) Ltd and Lumax Auto Technologies Ltd. Both the stocks are small cap and if you buy them, you can get maximum 20% return soon. Check details below:

1. Buy Insecticides (India) Ltd

Sharekhan has assigned investors to buy Insecticides (India) Ltd with a target price of Rs 690 apiece. Current market price of Insecticides (India) Ltd is Rs 574.00 apiece. If you buy Insecticides (India) Ltd now, you can get potential return of 20%.

The stock's 52-week high is Rs 789.00 apiece and 52-week low is Rs 388.66 apiece, respectively. The company has a market capitalisation of Rs 1,698.92 crore.

The small cap Agro Chemicals sector stock declined 23% in last 3-months, 14% in last 6-months, and gave a return of 28% in last 1-year. It soared 75% in last 3-years. It recently declared a dividend of Rs 3.00 per share on February 3 and set record date as February 24, 2023.

According to Sharekhan, "We expect the company to benefit from ramp-up of new products post capacity expansion and a potential rise in share of branded products (Maharatna brands). Thus, we expect strong revenue, EBITDA, and PAT CAGR of 19%/22%/23% over FY2022-FY2025E along with decent RoE of 16%. Hence, we maintain our Buy rating on IIL with a revised price target (PT) of Rs. 690."

2. Buy Lumax Auto Technologies Ltd

The analyst has assigned buy call to Lumax Auto Technologies with target price of Rs 288 apiece. Current market price of the stock is Rs 248 apiece with intraday gain of 12.70%.

If you buy Lumax Auto Technologies Ltd now, you can get potential return of 16%. The stock's 52-week high is Rs 312.00 apiece and 52-week low is Rs 141.35 apiece, respectively. The company has a market capitalisation of Rs 1,696.79 crore.

The Auto Ancillaries sector stock gave a return of 38% in last 1-year and 131% in last 3-years.

According to Sharekhan, "We maintain our Buy rating on the stock with revised PT of Rs 288. The stock trades at P/E multiple of 10.8x and EV/EBITDA multiple of 5.5x its FY25 estimates."

Revenue EBITDA and PAT grew by 4.1%, 4.9% and 8.2% respectively y-o-y. Current order book stood at Rs 500 crore and out of that 90% would be for the new business and rest is for replacement business.

Disclaimer

The stocks have been picked from the brokerage report of ICICI Direct. 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.