Stocks To Buy: Year-End Stock Picks That Could Reap Quick Gains In 2023

The Sensex and the Nifty are very close to peaks and as we set to close the year 2022, there could still be some potential upside. Here are a few stocks that are good stocks to buy for potential gains in 2023. The stocks are taken from the brokerage report of Sharekhan.

HCG: Drivers in place for good growth in revenues

Sharekhan sees good potential upside in the stock of HCG, with potential gains of as much as 22%. HCG's revenue grew at a 13% CAGR over FY2019-FY2022 to Rs. 1,400 crore in FY2022. New registrations (20% of revenue) grew by 10% in Q2; chemo sessions (35% of revenue) - procedures are day care oriented with no capacity constraints and grew by 20% in Q2; Radiation oncology (20% of revenue) - LINAC capacity utilisation improved by 600 bps to 68%; treated 5,000 patients in Q2 (treatment days 5 to 35 days); surgical oncology (25% of revenue) - in-patient bed occupancy improved by 700 bps to 61% in Q2. "With key drivers in place, HCG's revenue will post a 16% CAGR over FY2022-FY2025," Sharekhan has said.

Retain positive stance on HCG stock

With a leadership position and sustainable business model, HCG is a unique play among healthcare service providers, Sharekhan has said. "The top management is focusing on making the company a sustainable business model with efficient cash management to improve shareholders' value in the medium to long run. The company remains one of the preferred picks in the hospital space. The stock is currently trading at 13x/11x its FY2023/FY2024E EV/EBIDTA. We maintain our Positive view on the stock with a potential upside of 22% over the next 12 months," the brokerage has said.

Cummins: Margin profile to improve in the near to medium term:

Another stock that Sharekhan is optimistic is the stock of Cummins. "As commodity prices have started softening, the company anticipate gross margin to continue to improve over subsequent quarters. Cummins commands pricing power and has not rolled back price hikes. Hence, it expects sequential improvement in gross margins to continue and could get back to erstwhile gross margins of 34-35% in the next 18-24 months. Further, the company plans to grow its EBITDA margins by focusing on improving the share of high margin products particularly in exports, cost reduction initiatives through better engineering, designs and automation," the brokerage has said.

Price target of Rs 1755

According to Sharekhn, Cummins is likely to sustain the growth momentum as demand continues to be robust in sectors like data centers, healthcare and infrastructure. "In exports as well, the company has been continuously revamping its product portfolio and offering fit-for-market products which has helped it gain market share. Moreover, Cummins would benefit from emergence of alternative and green fuels and would play a crucial role in India's transition to a zero-carbon country by 2070 by offering products in alternative and green space. Cummins has strong balance sheet and steady cash flow generation. Cummins' industry leading margins, product depth and strong parentage makes it the best bet in industrial space. Hence, we retain a Buy on the stock of Cummins with a revised price target of Rs. 1,755," 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.