Stocks To Buy: Sharekhan Suggests 2 Stocks For Upto 25% Return: Gained Upto 40% In Past 1 Year

The Indian stock markets, this year are going through a tough time due to high inflationary pressures and interest rate hikes, affecting corporate profitability. So, checking the potential of the company stocks is quite important for the investors for good returns further. Sharekhan, a reputed brokerage firm has suggested one large-cap and one midcap stock, for up to 25% returns.

Stock Recommendations & Company Performances

Sharekhan suggests investors to buy the stocks of Thermax Ltd., and The Ramco Cements Ltd., in its June Value Guide report.

Thermax Limited's consolidated Q4 performance was marred by lower profitability across all its segments despite healthy topline growth. Order inflow witnessed a 127% y-o-y rise to Rs. 3,396 crore, while order book improved ~69% y-o-y to Rs. 8,812 crore. Order intake is going to be healthy given broad-based revival in capex and increasing traction in exports/international markets. Market capitalization of this large cap company is Rs. 23,713 crore. The company is fetching a dividend yield of 0.45%.

The company reported marginally lower than expected revenues although operational profitability was better than expected for Q4FY2022. It witnessed decent demand growth post Q4FY2022 till date. The capacity expansion plans largely remain on track. The company to incur an Rs. 1350 crore capex over the next 2 years. Market capitalization of this mid cap company is Rs. 14,114 crore. The company is fetching a dividend yield of 0.50%.

NSE market tracker & return comparison

In this table the Current Market Price (CMP) and the Target Price (TP) of the recommended stocks have been mentioned.

Company	CMP	TP	1 Year Expected Return
Thermax Limited	Rs. 2,025	Rs. 2,400	18.51%
The Ramco Cements Ltd	Rs. 679	Rs. 850	25.18%

Current market price of Thermax Ltd. is Rs. 2,025, and the brokerage firm has estimated a target price at Rs. 2,400, with an upside of 18.51% in 1 year. In the past 1 year Thermax's stock price has surged by 40.21%, in the past 6 month the stock price has fallen by 17.45%, even when the stock markets were bearish. In the past 1 month the share price has fallen only by 2.43%.

Current market price of Ramco Cements Ltd. is Rs. 679, and the brokerage firm has estimated a target price at Rs. 850, with an upside of 25.18% in 1 year. However, this stock's last year performance is not quite well. In the past 1 year Ramco's stock price has fallen by 41.90%, in the past 6 month the stock price has fallen by 38.51%, while in the past 1 month the share price has fallen by 12.11%.

Comments By Sharekhan

According to Sharekhan on the stocks of Thermax, "Margins are expected to improve in the coming quarters on account of price hikes taken in Q4 and stability in commodity prices. We maintain Buy on Thermax Limited (Thermax) with an unchanged target price of Rs. 2,400, given strong revenue visibility, promising order pipeline, and expectations of improving margin trajectory going forward."

Commenting on the stocks of Ramco Cements Ltd., the brokerage firm said, "We maintain a Buy on The Ramco Cements Limited (Ramco) with a revised PT of Rs. 850, lowering our valuation multiple to factor in sustained volatility in energy costs. The management expects a minimum of 10-15% y-o-y volume growth along with higher premium product sales contribution for FY2023. It would have to further hike prices to surpass EBITDA/tonne of Rs. 1300 at current cost of production."

Disclaimer

The above stocks were picked from the brokerage report of Sharekhan. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.