Cholamandalam, JK Lakshmi Cement, Metropolis Healthcare to Inox Leisure, check out these top stock picks

Angel Broking has come out with the list of few stocks which will benefit the investors to build their portfolio and grow their money. Some of the companies are going to get huge benefits as the economy opens up after the pandemic fear eases and they return back to normalcy. 
 
Angel Broking suggests buying Hindustan Aeronautics (HAL) at a current market price of Rs 769 with target of Rs 1125 (46% potential upside). HAL is one of the premier defense PSU in India which has over the years showcased research, design and development capabilities with the successful development of military aircraft and helicopters such as the Ajeet, Marut, HPT-32, Kiran and Advanced Light Helicopter. HAL has excellent manufacturing capabilities for indigenous aircraft and helicopters. HAL has also manufactured aircrafts under license for foreign companies, including the MiG 21FL/M/BIS, MiG-27, Dornier 228, Su-30 MkI, Hawk Mk 132 aircraft etc. Currently the company has an order backlog of Rs. 52,000 cr which is expected to increase substantially over the next few years as the company is likely to get many new orders including orders for 83 LCA Mark 1A worth ` 39,000 cr which is expected to go for cabinet approval very soon.

Brokerage recommends buying on Cholamandalam Inv & Fin at a current market price of Rs 250 with target of Rs 290 (16% potential upside). Chola has a diversified product mix which helps them to capture growth in the tractor and 2-Wheeler segment. Adequate capital adequacy of 20%+, declined trend in Cost of funding and strong parentage provides comfort to buy at current levels. Rural segment has seen good growth in past few months which

It suggests buying JK Lakshmi Cement at a current market price of Rs 270 with target of Rs 328 (21% potential upside). JK Lakshmi Cement is a predominantly north India cement company with capacity of 13.3 Mn Mt. Currently, north India is favourable location for the cement industry, the stock has consolidated to a large extent, demand and supply outlook is better compared to other locations. Q1 FY21 numbers of the Company were better compared to its peers due to favourable regional presence. It is also trading at a significant discount compared to other north based cement companies. Also, cement companies will benefit slowly and gradually as the economy will start opening up.

It recommends buying in Metropolis Healthcare at a current market price of Rs 1914 with a target of Rs 2360 (23% potential upside). Healthcare sector has been doing extremely well in the past few months. They are positive on the company given expected long term growth rates of 15% CAGR, stable margins profile and moderating competitive intensity.

It suggests buying Inox Leisure at a current market price of Rs 280 with target of Rs 350 (25% potential upside). Share prices have corrected more than 40% as all theatres are closed down due to covid-19 issue. Although the long term fundamentals are intact, Covid-19 can lead to further consolidation in the industry. With festival season approaching, new movies are lined up for release which will benefit the company.

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Brokerage recommends buying VIP Industries at a current market price of Rs 289 with target of Rs 375 (30% potential upside). VIP Industries is a market leader with more than 50% share, with a strong brand and wide distribution network. Recent correction provides investment opportunity in high quality stock from a long term perspective.

It Broking suggests buying Hawking Cooker at a current market price of Rs 5108 with a target of Rs 5992 (17% potential upside). Gaining market share within the peer group, strong demand post Covid-19 and increase in penetration of cooking gas to drive higher growth for the company going forward.

It also recommends buying on Reliance Industries Ltd. (RIL) at a current market price of Rs 2287 with a target of Rs 2543 (11% potential upside). RIL is India’s largest company with a dominant presence in Refining, Petrochemicals, Telecom and Retail businesses. Telecom business is going to witness robust growth over next few years due to tariff hikes and shift of subscribers from Vodafone Idea to other telecom players.

It recommends buying Swaraj Engines at a current market price of Rs 1441 with a target of Rs 1891 (31% potential upside). Swaraj Engines is engaged in the business of manufacturing diesel engines and hi-tech engine components. Diesel Engines are specifically designed for tractor application. Going forward, they expect recovery in the tractor industry (due to robust Rabi crop production, hike in MSP & the forecast of a normal monsoon) will benefit players in the company.

It suggests buying Endurance Tech at a current market price of Rs 1113 with a target of Rs 1297 (17% potential upside). Post Covid19, evolving consumer preference for lower ticket priced means of private transport amid pressurized incomes & awareness around social distancing are expected to act as tailwinds for domestic 2-Wheelers in India and 4-Wheelers across developed nations. However, as global economies will start opening up, this company will benefit over a period of time.

It recommends buying Persistent System at a current market price of Rs 1369 with target of Rs 1531 (12% potential upside). Company has won a large deal during the quarter which will ramp up over the next few quarters. We expect the company to post revenue/EBITDA/PAT growth of 11.6%/21.4%/19.7% between FY20-FY22 given negligible impact of Covid-19 on FY21 numbers. Strong deal wins and ramp up of existing projects along with margins expansion will improve the profitability for the company in the future.

It suggests buying Zensar Tech at a current market price of Rs 192 with target of Rs 238 (24% potential upside). Company was adversely impacted due to ramp down in the retail and consumer group segment. However, the company has won deals worth USD 150 mn during the Q1 and management has said that the deal pipeline is very strong at USD 1.5 bn as compared to USD 1 bn a quarter ago. Angel expects the company to post revenue/EBITDA/PAT growth of 4.5%/17.8%/19.7% between FY20-FY22 given that the worst is over for the company in terms of client ramp downs.

It suggests buying IDFC First Bank at a current market price of Rs 31 with target of Rs 36 (15% potential upside). They believe efforts to build a strong liability franchise, fresh capital infusion and provision taken on wholesale books will help to tide over this difficult time. The IDFC First Bank is trading ( 0.7 x FY22ABV) at a significant  discount to historical average valuations.

(Authored by Rahul Kamdar)