Broking firm, Sharekhan has a buy call on the stocks of Inox Leisure and Carborundum Universal for decent returns. The markets today closed at a new record high with the Sensex and the Nifty both seeing solid rallies. S Hariharan, Head - Sales Trading, Emkay Global Financial Services, "Nifty is trading close to technical resistance from a trendline connecting earlier highs in CY2021 (Feb & Jun) - seen in conjunction with non-confirmation of strength in Mid-cap & Small-cap indices, which had hitherto been out-performing headline indices, this suggests a narrow advance, and potential for a short-term pull-back. High-beta sectors appear most vulnerable to a correction in the near-term.''
Inox Leisure: Buy The Stock, as fresh content to bring hope
Sharekhan believes that the stock of Inox Leisure can rally to levels of Rs 400, as fresh content offers hope.
|Current market price||Rs 314|
|Target price||Rs 400|
“We expect meaningful recovery in box-office collections during 2HFY2022 given strong content pipeline, higher pace of vaccination, and closure of some single screens,” the brokerage has said.
According to it, big-budget movie producers will start announcing the release dates of their movies in the coming weeks as they have been waiting to release their movies in theatres post reopening.
Inox Leisure: Price target of Rs 400 on the stock
Inox Leisure has indicated that it will be resuming operations at 113 properties having 459 screens in the coming days in a staggered manner.
"We expect the state governments of Maharashtra and Tamil Nadu would allow to reopen cinema halls soon as COVID vaccination gains pace. We believe Inox Leisure has done a commendable job in keeping fixed expenses under control during Q1FY2022. Given the strong content pipeline across languages, announcement of release date of fresh big-budget content, robust consumer demand, and higher pace of vaccinations, we expect a meaningful recovery in Indian multiplex industry in the second half of FY2022," the brokerage has said.
Sharekhan also has a buy call on the stock of Carborundum Universal with a target price of Rs 854 on the stock.
|Current market price||Rs 706|
|Target price||Rs 854|
The company says that the strong domestic operations led by core user industries along with improving overseas operations aided by capacity expansion, success of new products, and being an alternative global supplier are likely to aid domestic and exports growth.
"Strong balance sheet, healthy return ratios and consistent dividend paying record are key salient features," the brokerage says.
Carborundum Universal: To benefit from multiple factors
According to Sharekhan the company stands to benefit from multiple factors such as a broad-based recovery in industrial capex, China +1 strategy, strong initiatives of the Government of India to support domestic manufacturing and healthy demand prospects for regular and specialty products.
"The company is currently trading at a price to earnings multiple of 30 times and 27 times on FY2023E/FY2024E earnings, which we believe is reasonable, considering its strong earnings growth outlook and robust balance sheet. Hence, we recommend a Buy on Carborundum Universal with a revised target price of Rs 854," the brokerage has said.
The above stocks are based on the report of Sharekhan. Investing in stocks is risky and investors should do their own research. The author, the brokerage firms or Greynium Information Technologies are not responsible for any losses incurred due to a decision based on the above article. Investors should hence exercise due caution as are at record peaks. Please consult a professional advisor.