There are many stocks that investors could buy today, even though the markets are trading at record highs. Some of these are still undervalued according to research analysts. Here are 2 stocks that maybe good from a long term perspective to buy today and hold for a medium to long term.
Tata Consumer Products
This is a stock that is recommended by Motilal Oswal and we tell you why the brokerage is upbeat on the stock. The firm has set a target price of Rs 775 on the stock, as against a price of Rs 709, which it is trading at. Tata Consumer products has extremely renowned brands like Tata Salt, Tata Tea and Tata Sampann. Motilal Oswal believes that the company has many strong legs, is focussed on strengthening its core business, exploring new areas, product portfolio expansion etc.
It also believes that the strong cash generation would help to support growth. "Tata Consumer products has maintained a capital expenditure run-rate of Rs 2 billion to Rs 2.3 billion over the last 10/five years. Net cash increased to Rs 26.8 billion in FY21 (v/s net cash of Rs 12.7 billion in FY20). On the back of strong cash generation and lower debt levels, gross debt/equity ratio stood at 0.05 times in FY21 (v/s 0.09x in FY20). This gives Tata Consumer Products enough headroom to carry out various expansions and branding activities for its newly diversified product portfolio, along with its existing basket of products," the brokerage firm has noted.
Tata Consumer Products: Strong Legs
Motilal Oswal also believes that Tata Consumer Products has very strong legs. The strong legs according to the firm is brands like Tata Tea, Tata Salt and Tata Sampann. According to brokerage, growth will come by market share gains from unorganized players via an increasing distribution reach and new product launches. Also, growing consciousness towards healthy eating habits and hygienic products is expected to benefit Tata Consumer Products due to the strong brand that it has.
"We expect a revenue/EBITDA/net profits CAGR of 9%,21%, 27% over FY21-23 estimated and arrive at an FY23 estimated SoTP-based target price of Rs 775 per share. Maintain Buy," Motilal Oswal has said in a report.
The stock of Tata Consumer Products was last seen trading at Rs 709.35 on the NSE.
This is another stock that Motilal Oswal is bullish on. The brokerage has set a target price of Rs 4,000 on the stock as against the current market price of Rs 3,600.
Teamlease is a staffing and manpower services company. Broking firm, Motilal Oswal believes that increased manpower demand and higher margin replacements in the IT Staffing business should improve margin by 30 basis points in FY23 estimated from FY21 levels. This, in turn, should result in an adjusted net profits at a compounded annual growth rate of 43% over FY21-23E.
Apart from this, the brokerage also believes that both the central and state governments look forward to liberalizing and formalizing the labor market, TEAM should be among the biggest direct beneficiaries.
"We marginally reduce our FY22 estimates by 2% to factor in a revenue impact from the ongoing lockdown. Our target price of Rs 4,000 per share implies 41 times FY23 estimated EPS. Reiterate Buy," the brokerage firm has said in a report.
The stock of teamlease was last trading at Rs ,3750
We are not a qualified financial advisor and any information herein is not investment advice. It is informational in nature. All readers and investors should note that neither Greynium nor the author of the articles, would be responsible for any decision taken based on these articles. Please do consult a professional advisor. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and authors do not accept culpability for losses and/or damages arising based on information in GoodReturns.in