ACC Ltd from the cement sector, Federal-Mogul Goetze (India) Ltd from the auto ancillaries sector, and Dr Reddy’s Laboratories from the pharma industry are the three top stock picks recommended by domestic brokerage and research firm HDFC Securities for investors with a two to three quarter time horizon.
ACC: ACC has a lot of room for development in terms of production and efficiency, since it currently falls below many of its counterparts. According to the memo, the new owners might move quickly to seize these low-hanging fruits.
“We believe investors may purchase the stock in the 2391-2440 range and add on falls to the 2163-2207 range in 2-3 quarters for a base case fair value of 2634 and a bull case fair value of 2813.”
Federal-Mogul Goetze : With a market share of more than 30%, FMGIL is the second largest participant in India’s organised market for pistons and piston rings.
“It has a solid financial profile and a plethora of fresh product releases planned.” We anticipate sales growth and a 19/35% CAGR in PAT for FMGIL between FY22 and FY24. “We believe that investors may purchase the stock in the 316-322 range and add on dips to the 271-277 range for a base case fair value of 354 and a bull case fair value of 380 over the next 2-3 quarters,” HDFC Securities said.
Dr Reddy’s : According to the firm, DRL is one of the few Indian businesses with a major presence in China and a growing portfolio of products that can develop into a structural growth engine.
“We anticipate revenue, EBITDA, and Adj. PAT CAGRs of 9%, 22%, and 15%, respectively, over FY22-24E.” According to the brokerage, “we believe investors may purchase the stock in the range of 4318-4365 and add further on dips to 3893 for a base case goal of 4756 and a bull case objective of 5080 over the next two quarters.”
