Smallcap And Largecap Stocks To Buy As Recommended By Sharekhan

Broking firm Sharekhan has recommended buying the stocks of Ramkrishna Forgings and Bharti Airtel for good returns. Here are some of the reasons to buy these two stocks, according to the broking firm.

Ramkrishna Forgings

"We maintain our Buy rating on Ramkrishna Forgings with a revised price target of Rs 1,204, led by a continued growth momentum for commercial vehicle segment in India, Europe and North America and an upgrade in earnings estimates.

We interacted with the company's management to understand the business outlook in its key geographies and the reason for fund raising resolution at the board meeting. Ramkrishna Forgings is witnessing demand across geographies, product portfolio and clients, driven by strengthening business with existing clients, acquisition of new clients and foray into new segments," the brokerage has said.

It also recently bagged LOI for its warm forging business of Rs 12 crore per annum from a major global axle manufacturer located in India.

"The North American business is driven by light commercial vehicle (LCV) business, robust demand recovery in oil and gas segment and evolving piston business. The Europe business has a robust outlook, led by increasing business from existing clients and acquisition of new clients," the brokerage has said.

 

Reasons to buy the stock the stock of Ramkrishna Forgings

According to Sharekhan, the Indian government is offering various incentives such as PLI scheme, make-in-India and Atmanirbhar Bharat Mission, which will provide a strong platform for automobile suppliers such as Ramkrishna Forgings.

"We believe that has a strong global footprint and is serving to leading OEMs, not only in the automotive segment but other sectors as well. We expect Ramkrishna Forgings to gain market share internationally, as it has completed its major capex. We have increased our earnings estimates for FY22E and FY23E by 15.8% and 28.1%, respectively, driven by new order wins and margin expansion. We have introduced FY2024E estimates. The stock is also available below its historical average multiples at P/E of 15.1x and EV/EBITDA of 7.6x on its FY2023E estimates. We reiterate buy rating on the stock with a target price of Rs 1,204," the brokerage has said.

The stock of Ramkrishna Forgings was last trading at Rs 999 on the NSE.

 

Buy Bharti Airtel: Sharekhan

According to Sharekhan, Bharti Airtel has been gaining market share in both wireless and non-wireless business even during challenging times, because of its relentless focus on improving customer experience, strengthening its core business and building digital capabilities.

"The potential tariff hike in the coming months along with steady 4G subscriber additions, continued increase of postpaid customer base and strong growth potential in non-wireless business is expected to boost the company's EBITDA growth at a 22% CAGR over FY2021-FY2023. We introduced FY2024 numbers in this note. At the current market price, the stock trades at a reasonable valuation of 8x its FY2023E EV/EBITDA. We continue to remain positive on Bharti given its proactive capital raise plan to accelerate growth, revenue market share gains across portfolios, improving free cash flows, continued asset monetisation efforts and strong competitive position. Further, any strategic investment by any global tech company could be a further re-rating trigger. We maintain a Buy rating on the stock with an unchanged price target of Rs. 750," the brokerage has said.

 

Disclaimer

Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage houses are not liable for any losses caused as a result of decisions based on the article. The above article is for informational purposes only and is picked from the brokerage report of Sharekhan. Be careful while investing as the Sensex has now crossed 55,000 points. Investors can invest small amounts and avoid putting lumpsum.