Stock To Buy: 3 Tata Group Stocks Suggested By Sharekhan For 25-35% Gains

Tata Consumer Products Ltd

Tata Consumer Products is a large-cap stock with a market cap of Rs 65,582.23 Crore. Tata Consumer Products Limited is a consumer goods company that brings together the Tata Group's major food and beverage operations under one roof. Tata Consumer Products is the world's second-largest branded tea firm.

Stock Performance & Returns

Today, the share of the Tata Consumer Products closed at Rs 711.65. The CMP is roughly Rs 61.45 above the 52-week low of Rs 650.20 per share level and Rs 177.35 below its 52-week peak of Rs 889 per share level. The 52-week low is Rs 650.20 and 52 week high is Rs 889. According to the estimated target price of Rs 960 and the CMP, the shares of the company has robust potential to gain nearly 35%.

The PE ratio of the stock is 70.11, while the sector P/E ratio is 65.60. The ROE of the stock is 6.8%.

Over the last 1 year, the stock witnessed a fall of nearly 4.21%. They gave negative returns in the last 1 year. However, it gave positive returns on long-term investment of 190.46% in 3 years and 351.11% in 5 years.

Sharekhan view & recommendation

Tata Consumer Products Ltd is focusing on enhancing shareholders' value by simplifying its structure and unlocking significant financial value while generating consistent earnings growth focusing on its six-pillar growth strategy. Strong cash flows will be utilised for organic and inorganic initiatives to strengthen the key growth pillars in the coming year. With strategies in place, Tata Consumer Products Ltd is well poised to achieve double-digit revenue and PAT CAGR of 15% and 20%, respectively, over FY2022-FY2024. The stock is currently trading at 53.1x and 43.6x its FY2023E and FY2024E EPS, respectively. "We maintain our Buy recommendation on the stock with an unchanged price target (PT) of Rs. 960," the brokerage has said.

Indian Hotels Company Ltd

Indian Hotels Company Ltd is India's largest hotel chain and South Asia's largest hospitality company by market capitalization. The company operates under the brand "Taj Hotels, Palaces and Resorts".

Stock Performance & Returns

The CMP of the company is Rs 213.70. The CMP is above Rs 92.34 per share from its 52-week low levels of Rs 121.36 per share level, and Rs 55.25 below its 52-week high of Rs 268.95 per share level. According to the CMP and the estimated Target price of Rs 286 set by the brokerage, the stock could jump 34%.

In the last month, the has dropped nearly 7.78%. It has returned 64.29% in one year, 45.76% in one year, and 67.72% in five years. The stock has not performed well in the short run when compared to the long term, especially in the last year.

Sharekhan view & recommendation

Indian Hotels Company Ltd's management has charted a strong growth plan by FY2025-26 with strong improvement in cash flows and strengthening balance sheet with a focus on becoming net cash Positive. Pent-up demand in the domestic leisure travel will help the company to achieve strong growth over the pre-pandemic level in the absence of the fourth wave. "The EBITDA margins will consistently improve in the coming years. Thus, we maintain Indian Hotels Company Ltd as one of our top picks in the hospitality space. We maintain our Buy recommendation on the stock with an unchanged price target of Rs. 286. The stock is currently trading at of 33x/23x its FY2023E/24E EV/EBITDA," the brokerage has said.

Tata Elxsi Ltd

Tata Elxsi is a mid-cap IT company with a market cap of Rs 48,201.96 crore. The company is among the world's leading design & technology services providers. The Company is engaged in product research and development outsourcing business. It offers system integration and software development services to various industries.

Stock Performance & Returns

Tata Elxsi CMP is Rs 7,812.85. Its 52-week low is Rs 3,555.05 per share and its 52-week high is Rs 9420 per share. The stock's CMP is Rs 4,257.8 above its 52 week low level, and Rs 1,607.15 below the 52-week high level. Investors can expect 25.08% of positive gains in 12 months considering the CMP and the Target Price of Rs 9,750.

The stock has performed well in long-term investment. However, it has not performed well in the last 1 month, as it fell nearly 5.58%. It has given positive returns of 107.27% in the last 1 year, 792.89% in 3 years and 901.29% in 5 years of investment.

Sharekhan view & recommendation

"Tata Elxsi is well poised to capture market opportunities across the selected industries given its unique capabilities in design-led engineering. Tata Elxsi's USD revenue and earnings are likely to clock a CAGR of 23% and 20%, respectively, over FY2022-FY2024E. Under our coverage, Tata Elxsi is the only company whose stock performance (up 22%) has significantly outperformed CNX IT (down 17%) over last three months despite interest rate hikes by the US Federal Reserve, rising inflation in developed markets, the Russia-Ukraine conflict and potential recession in the US. At CMP, stock is trading at 78x/67x its FY2023E/FY2024E earnings, which is expensive. However, we continue to prefer Tata Elxsi, given its strong growth potential, market share gains, superior margin profile, differentiated capabilities in digital engineering and strong balance sheet (cash and investments was 51% of total assets). We maintain a Buy rating on Tata Elxsi with a revised price target (PT) of Rs. 9,750," the brokerage has said.