Over the past week, analysts have been picking stocks in a market that has already run up substantially over the past year. Some of these stocks that have emerged as analyst favorites have generated 100% (or close to it) returns over one year, but are among fresh buy calls as September quarter results draw close.
1. Dalmia Bharat: This cement company has climbed over 170% in the past year, but gets love from Axis analysts Uttam Srimal and Shikha Doshi for its falling debt levels and fresh capacity being added. The company has healthy growth in sales volumes, they note, as well as margin expansion driven by product mix optimization, prudent market mix, and cost-efficiency initiatives. "Owing to cost optimization measures, the company’s cost/tonne was reduced by 4.6% YoY," they write. Their target is at Rs. 2450, an upside of 15%+
2. Bharat Electronics: ICICI Securities is bullish on this aerospace and defence electronics company, which has already gained 109%+ in the past year. There are still gains to be had, they say, noting its order inflow growth, sustained margins and strong order book. "We expect revenue, EBITDA to grow at CAGR of ~14.6%, 11.9%, respectively, in FY21-23E aided by sustained margins in range of 21-22%," analysts Chirag Shah and Amit Anwani write, assigning it a target price of Rs 250, an upside of 22%.
3. Piramal Enterprises: Financial company PEL has already had an impressive run up in share price over the past year, gaining over 104%. But its completion of the DHFL acquisition has analysts enthused. Motilal Oswal assigns it a target price of Rs. 3150, an upside of 18%+. "We expect the Financial Services business to deliver ~2.3% RoA/10% RoE over the medium term (post building in the DHFL acquisition)," Abhijit Tibrewal and team write.
4. Birlasoft: With strong growth across this IT company's top 20 accounts, Ashika Research says that Birlasoft management remains optimistic for 15% revenue growth in FY22E. Ashika Research analysts give the company a 22% upside on a target price of 485, expecting it to continue rising after its gain over one year of 104%+.
5. Varun Beverages: The outlook is strong for this pepsico franchisee, according to analysts. The stock, which has already gained over 95% in the past year, has continued momentum based on a) its growing distribution network, b) rising penetration in the newly acquired region (south and west India), c) diversifying product portfolio, and d) growing refrigerator penetration in rural/and semi-rural areas per household and higher power availability hours. The average broker target for this stock is Rs. 1000 across analysts, an upside of 10%.
