Stocks To Buy For 2023: Smallcap Stocks That Could Reap Good Returns

Markets are ending the year 2022, on a good note. A few weeks back, the Sensex and the Nifty both hit record highs. Here are a few stocks from the small cap space as recommended by Sharekhan to buy, which could reap good returns in 2023.

Buy Wonderla Holidays, says Sharekhan

According to Sharekhan, footfalls at the company are likely to touch 27 lakh in FY2023. "Business has sustained the momentum in Q3FY2023 with strong footfalls during holidays and weekends (largely driven by walk-ins). The company reported footfalls of 16 lakhs in H1FY2023. With the sustenance of strong growth momentum, we expect footfalls to touch 27 lakhs in FY2023. This, along with higher ARPUs (increased by Rs. 150 over FY2020 ARPUs), we expect revenue to reach Rs. 390 in FY2023. With defined strategies to drive footfalls and 7-8% increase in ARPUs, revenue is expected to post a CAGR of 15% over FY2023-FY2025. Further, addition of two new parks in Chennai/Odisha will lead to incremental footfalls and will add to revenue in the medium to long run," the brokerage has said.

Price target of Rs 425 on Wonderla Holidays

According to Sharekahn, Wonderla's management is optimistic about the mediumterm outlook and expects consistent improvement in footfalls in the coming years. "This will boost profitability with EBIDTA margin expected to recover to historical levels of 40% by FY2023 and will consistently improve in the subsequent years. Focus on the asset-light model of entering into new markets and improving the business model to international standards of 60:40 mix between ticketing and non-ticketing revenue provide a huge scope to grow in the coming years. The stock is currently trading at 12.3x/10.5x its FY2023E/FY2024E EV/ EBITDA. We maintain our Buy recommendation on the stock with an unchanged price target of Rs. 425," the brokerage has said.

Moldtek Packaging: Buy the stock for 25% returns, says Sharekhan

According to Sharekhan, Moldtek Packaging is undergoing a capex of Rs. 250 crore to expand capacity by 56% to 70 kt (an addition of 25 kt) by FY24- 25. "Moreover, with focus on new product launches, the company is foraying into Injection Blow Molding (IBM) containers for FMCG, pharma and digital QR coded IML products for paints and lubes companies. Higher utilisation at existing capacity, new capacity addition and product launches would drive robust volume growth for Mold-tek. Management has guided for 15-20% volume growth over FY23-25E, which is much higher than historical volume CAGR of 10% over FY16-22," the brokerage has said.

MoldTek's earnings at infection point

MoldTek Packaging's earnings are at an inflection point given expectation of superior volume growth/margin improvement supported by capacity expansion and an improved revenue mix, Sharekhan has said. " We expect robust PAT CAGR of 29% over FY22-25E with steady improvement in RoE/RoCE to 20%/25% by FY25 versus 18%/22% in FY22. Hence, we initiate viewpoint on Mold-Tek Packaging with a Positive view and expect a 25% upside. Valuation of 28x/21x FY24E/FY25E EPS seems reasonable considering strong earnings growth outlook and its fiveyear average one-year forward PE multiple is at 23 times," the brokerage has said.

Disclaimer

The stocks have been picked from the brokerage report of Sharekhan. 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.