Stocks to buy: JMC Projects, Aditya Birla Capital can clock up to 79% return, say brokerages

Shares of JMC Projects (India) and Aditya Birla Capital, in which brokerages came up with their calls recently, were trading in contrast on Wednesday. JMC Projects surged over 10%, while Aditya Birla Capital was trading falt with negative bias. At 1.30 pm, construction scrip JMC Projects was trading with gains of 10% to Rs 87.30 per share on the BSE. Similarly, Aditya Birla Capital declined nearly 101.20 apiece on the BSE.  

The brokerages see up to 79% upside on Tuesday's closing price, when the brokerage came out with their report.  

JMC Projects (JMC)  

Being bullish on this construction stock, brokerage firm HDFC Securities maintained a buy rating on the counter with a target price of Rs 142 per share, which translates into an upside of nearly 79%. As per the brokerage, JMC Projects revenue was a beat at all levels. The EBITDA margin was muted at 8.5%, affected by high commodity prices and supply chain issues. "The FY22 order inflow (OI) was at INR 101bn, taking the order book (OB) to INR 171bn. We maintain BUY with a revised target price of INR 142 (11x Mar-24E EPS). We cut our FY23/24 EPS estimate by (10.9)/(17.2)% to factor in elevated commodity prices," it said.  

At the record price of Rs 96 per share, Yes Securities sees an upside of 18% in the counter. It maintained a buy rating with a target price of Rs 114 per share.  

"We expect execution to pick up during FY22/23 with better labor availability and robust order book. We expect operating margin to improve gradually to 10‐11% levels as execution ramps up. We maintain our BUY rating on the stock for revised target of Rs.114 (based on SOTP valuation)," said the brokerages.  

Aditya Birla Capital 

HDFC Securities maintained a buy rating for ABCL with a target price of Rs 164, an upside of nearly 60% on Tuesday's closing price of Rs 102.10 apiece.  

Aditya Birla Capital's journey to drive consolidated return ratios closer to franchise potential seems on track, with consistent execution across businesses, says the brokerage.  "The lending businesses have gradually been repositioned towards retail and granular loans, which is reflected in sustained improvement in franchise earnings. The insurance businesses continued to build their profitability trajectory," it said.  

Based on attractive sector view, Kotak Institutional Securities initiated coverage with an add rating on Aditya Birla Capital.  

ABCL’s focus on profitability improvement across businesses by a combination of shift to high-margin segments, efficient expense management and operating leverage will support its valuations. " We initiate coverage on ABCL with ADD rating and SoTP-based FV of Rs145," said the brokerage.