Vikas Sethi bullish on these midcap, smallcap stocks as Nifty reaches peak levels

As Nifty50 hit an all-time high of 23,490.40 on Friday, June 15, 2024, in the last 30 minutes of the trading session and the Sensex closed up 181.87 pts, investors are looking for expert guidance to capitalize on this rally. In conversation with Zee Business, Vikas Sethi of Sethi Finmart has spotlighted midcap and smallcap stocks poised for short-term gains.

Sethi's bullish outlook centres on three stocks: Delhivery (DELHIVERY), Gujarat Mineral Development Corporation (GMDCLTD), and Ion Exchange India (IONEXCHANG). He has kept short-term targets of Rs 430 for Delhivery, Rs 415 for GMDC, and Rs 570 for Ion Exchange India.

Here are the details of his stock recommendations along with his rationale:

Why Sethi recommends buying Delhivery stock?

He is bullish on the Delhivery shares because of company factors such as market leadership, comprehensive services, extensive reach, data intelligence, and customers.

Rationale:

• India's largest and fastest-growing logistics service provider
• Covers partial to full truckloads with a strong focus on e-commerce
• Services 18,500 out of 19,000 pin codes in India
• Strong segment enhancing supply chain solutions
• Serves more than 26,000 customers
• Significant potential due to India's economic growth and new freight corridors
• FIIs and DIIs hold substantial stakes (around 80 per cent), including SBI Equity Hybrid Fund, Vanguard, Amansa Holdings, ICICI Prudential

Delhivery share price target

Sethi has suggested buying the Delhivery stock for a target of Rs 430 with a stop loss at Rs 400.

Why Sethi recommends buying Ion Exchange stock?

Due to government support, market need, product range, prominent clients, financials, and other factors of the company he suggest the stock.

Rationale:

• The company operates in high-growth sectors like wastewater treatment, water recycling, and seawater desalination.
• Global manufacturing includes India, Bangladesh, UAE, Bahrain, and Indonesia.
• Well positioned due to worldwide water scarcity, especially in the Middle East.
• They offer water purifiers to hotels, hospitals, and educational institutions.
• Support from Indian government schemes such as 'Har Ghar Jal'.
• The company includes prominent clients such as Larsen and Toubro (L&T), Taj Hotels, The Leela, and Hyatt Hotels.
• Over 100,000 installations worldwide, more than 50 patents, and more than 100 products.
• RoE close to 220 per cent, Return on Capital Employed (RoCE) close to 225 per cent, low debt equity ratio of 0.14.
• FIIs and DIIs hold 17-18 per cent stakes, including HDFC and Franklin India.

Ion Exchange share price target

Sethi recommends buying the Ion Exchange India stock for a target of Rs 570 with a stop loss at Rs 515.

Why Sethi recommends buying GMDC stock

Rationale:

• The company is involved in mining (bauxite, lignite, manganese) and power (wind, solar, thermal) sectors.
• Benefiting from rising manganese prices and focus on rare earth minerals.
• They engaged BCG Group for exploring growth opportunities.
• Emphasis on rare earth minerals by the Indian government.
• Attractive valuation with strong fundamentals and good operating profit margins.
• Despite past underperformance, the stock is positioned for a rebound.

GMDC share price target

Sethi recommends buying the Gujarat Mineral Development Corporation (GMDC) stock for a target of Rs 415 with a stop loss at Rs 387.