End of the lower interest rate era, rising concern over inflation, ongoing geopolitical crisis and heavy outflow by foreign institutional investors (FIIs) have weighed market sentiment during the past nine months. As a result, the benchmark BSE Sensex has tumbled nearly 15 per cent to 52,979.68 in the afternoon trade on June 28 from its all-time high of 62,245.43, scaled on October 19, 2021. There are expectations that the markets may continue to remain volatile considering the ongoing developments. At the time, market mavens believe that this is the time to accumulate beaten-down stocks. Delhi-based investor and market veteran Ashish Chugh recently told BT: “At present, there may be various other businesses with good potential where stock prices have fallen from the highs and are at attractive valuations – do study such companies.”
Business Today has collated a list of companies which may deliver a return of up to 74 per cent after witnessing up to 64 per cent correction from their 52-week high levels. Have a look.
Amber Enterprises| CMP: Rs 2,281 | Target price: 3,850 | Upside: 69 per cent
The company is a market leader in the room air conditioners (RAC) outsourced manufacturing space in India. Amber would outperform the industry due to its dominant position in RAC contract manufacturer, increase in the share of business with existing customers and new client additions. The company plans to increase revenues from components and exports.
Ramkrishna Forgings | CMP: Rs 164 | Target price: Rs 256 | Upside: 56 per cent
Ramkrishna Forgings (RKFL), a leading forging player in India and among a select few having heavy press stands to benefit from a favourable demand outlook for the medium and heavy commercial vehicle (M&HCV) industry in domestic and export markets in the near term. The company has phased out its capex over the past few years during which it was impacted by industry slowdown in certain periods. With the end to the capex cycle, the favourable outlook in the medium term, and sufficient capacity in place, the brokerage believes RKFL volumes would be able to post a volume CAGR of 29 per cent over FY21-23E.
Stove Kraft | CMP: Rs 552 | Target price: Rs 805 | Upside: 45 per cent
Stove Kraft is engaged in the business of manufacturing and selling kitchen and home appliances products like pressure cookers, LPG stoves and non-stick cookware under the brand name 'Pigeon' and 'Gilma'. In the pressure cookers and cookware segment, over the last two years, the company has outperformed the industry and its peers. Post-Covid, organised players are gaining market share from unorganised players which would benefit a player like Stove Kraft.
Suprajit Engineering | CMP: Rs 317 | Target price: Rs 485 | Upside: 53 per cent
Suprajit Engineering is the largest supplier of automotive cables to the domestic OEMS with a presence across both 2Ws and passenger vehicles. The company over the years has evolved from a single product/client company in India to have a diversified exposure which, coupled with its proposition of being a low-cost player, has enabled it to gain market share and more business from existing customers. SEL has outperformed the Indian auto industry in recent years. The company believes that consolidation of vendors and new client additions would help in maintaining the trend of market/wallet share gains.
Sona BLW Precision Forgings | CMP: Rs 570 | Target price: Rs 843 | Upside: 48 per cent
Sona BLW is one of India’s leading automotive technology companies that derives around 40 per cent of its revenue from battery electric vehicles (BEV) and hybrid vehicles. It supplies EV differential assemblies and gears, BSG systems and EV traction motors to global customers. Given the traction in the BEV/hybrid vehicle space, Angel Broking believes that Sona Comstar will continue to command a higher multiple which is justified by around 47 per cent earnings CAGR over FY21-24E.
Also read: These stocks of Rakesh Jhunjhunwala, Dolly Khanna, Ashish Kacholia slipped up to 60% in 8 months; worth a look?
Ratnamani Metals and Tubes | CMP: Rs 2,519 | Target price: Rs 2,950 | Upside: 17 per cent
Ratnamani Metals and Tubes (RMTL) is a niche player with superior capabilities in the domestic industrial pipes and tube segment. RMTL manufactures a wide range of stainless steel and carbon steel pipes and tubes, which find application in key end-user industries like oil & gas refineries, healthcare, etc. The company has a healthy cash flow and a strong balance sheet. It is one of the few players in the steel pipe sector having a net cash position on its balance sheet. The company has an impressive capital allocation track record and best-in-class operating margins and returns.
Coal India | CMP: Rs 182 | Target price: Rs 225 | Upside: 24 per cent
Coal India’s e-auction realisations are likely to benefit from the elevated global thermal coal prices. Over FY22-24E, ICICI Securities expects Coal India’s consolidated topline to grow at a CAGR of 3.2 per cent while consolidated EBITDA and consolidated PAT are expected to register a CAGR of 6.3 per cent and 5.6 per cent, respectively.
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RECOMMENDATION BY B&K SECURITIES
Hikal | CMP: Rs 258 | Target price: Rs 450 | Upside: 74 per cent
Hikal stock has fallen by 62 per cent from its all-time high level of Rs 715 last year. The brokerage believes most of the concerns related to the tanker incident have been factored into a recent correction. So far, Hikal has not seen any revocation/cancellation of contracts by its customers and they continue to stand in support of Hikal. Regarding long-term strategic deal signed with Innovator MNC in April 2021, Hikal continues to partner with its Innovator client on technology absorption for the products under development and both parties remain committed to joint investments at the Panoli site (dedicated facility being created for this purpose, capex plans initiated), commercial supplies to commence from 2024. B&K Securities maintains Buy rating on Hikal given the significant turnaround in earnings trajectory led by both pharma and agrochem/crop protection segments (60:40 mix). Hikal has been seeing increased traction in CDMO segment for both pharma and agrochem businesses. It has received an order for validation of an intermediate for a new potential drug from a leading Innovator company.
(Disclaimer: Stocks recommendations by brokerages are their own and not those of the website or its management. Business Today advises market participants to check with certified market experts before taking any buy decisions.)
Also read: Checkout where market veteran Ashish Chugh is investing in this falling market
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