Midcap Picks with Anil Singhvi: Accelya Kale Solutions, Kirloskar Industries and City Union Bank shares are buys today

In conversation with Zee Business Managing Editor Anil Singhvi on the "Special Midcap Stock Picks show," founder and CEO of Chase Alpha and market analyst Vishvesh Chauhan recommended three stocks that would give good returns to investors. Chauhan picked Accelya Kale Solutions, Kirloskar Industries, and City Union Bank with long, positional, and short-term views respectively. Here is why this expert picked these shares.

Long term pick: Accelya Kale Solutions

Speaking about the technical aspect of this IT company, Vishesh Chauhan says, Accelya Kale Solution with a market cap of Rs 1290 crore, has an operating margin of 28 per cent. In the last five years, the profit variance is magnificent and has 26 EPS, he adds.  

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The stock has reported a stellar return on equity by 47 per cent in the last three years and it gives a healthy dividend payout of 46 per cent, says Chauhan. “There has been range trade of stock between Rs 850-1100 per share, and it’s in a lower range currently which makes a perfect time for buying.”

The stock has been corrected from Rs 1800 per share to Rs 700 per share in the last few months, says the analyst, he further believes there will be a continuation in this pattern. He adds, It is an undervalued stock in the IT space and should be bought at Rs 870 per share for the target of Rs 1100-1250 per share in the long term. He believes, it would touch Rs 1500 apiece level in five years. Accelya Kale Solutions is into giving solutions to financials, Cargo companies, and Commercial space, says the market expert. 

शॉर्ट टर्म, पोजीशनल और लॉन्ग टर्म निवेश के लिए आज कौन से 3 मिडकैप शेयर बने विश्वेश चौहान की पसंद? जानें यहां#SPLMidcapStocks @AnilSinghvi_ @Vishvesh03 pic.twitter.com/9IfdmfpyMA

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Positional Pick: Kirloskar Industries  

With a market cap of Rs 1220 crore, the company’s market-cap to sales ratio is at 0.69. In the last five years, the company’s profit variance is around 10 per cent, the analyst said. There has been a huge bull run in the shares from Rs 800 to Rs 1500 per share of Kirloskar Industries since the start of 2021. The stock has been corrected to Rs 1200 per share level, wherein it has created multiple bottoms, says the expert. He believes, till the time, the stock is holding Rs 1200 per share level it should make a comeback to Rs 1500-1550 per share in another three to six months.

Short Term Pick:  City Union Bank

The stock which is trading around Rs 169 per share level, has formed flag formation at the lower end of the channel on a technical level, says the analyst. He adds, the stock would reach Rs 190 to Rs 220 per share targets on a short-term basis if it holds Rs 155 apiece. The bank’s book value is 2x that compared to other private sector banks, however, the only concerning factor is City Union’s NPA, says Chauhan.

The CASA ratio, which is around 27 per cent, would help the stock to do reasonably well, he adds, further stating if NPA is controlled then, the bank will go beyond Rs 200 apiece. He sets a stop-loss of Rs 155 per equity share.