 "Brokerage recommends buying these 3-stocks having upside up to 26%")
With ongoing earnings, rerating of listed stocks is also in full swing, analysts are fast at highlighting the possible laggards as well as stocks that have huge steam left in them.
According to analysts, one such stock that will keep its upward momentum going is CreditAccess Grameen, having an upside of 26 per cent on its current market price of Rs 1,429 as of May 8.
The company recently delivered a strong show in its Q4 earnings for fiscal year 2023-24, recording a net profit jump of 33.89 per cent year on year to Rs 397.08 crore. On the other hand the firm's revenue rose 36.85 per cent to Rs 1,459.10 crore in Q4FY24 over Q4 FY23.
According to analysts at ICICI Direct, the company maintained its market leadership along with prudent asset quality on a sustainable and resilient business model. Its strategy to expand geographic reach with focus on customer selection, retention should continue to aid
asset quality.
“Factoring RoA at 5.4-5.5 per cent level coupled with 20-25 per cent growth in AUM, we value the stock at 2.8x FY26E ABV and assign a target of Rs 1800 per share (previous target at Rs 1700). Maintain Buy rating,” the brokerage said in a result update.
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CreditAccess Grameen is among India's leading microfinance firms, boasting over three decades of experience, an AUM (Assets Under Management) exceeding Rs 26,714 crore.
Moving on from the microfinance sector, murmurs are that CIE Automotive India, an automotive components company is set to see a period of healthy growth going forward.
However, the company saw subdued growth in its January-March quarter results, consolidated revenue for the quarter came in at Rs 2,427 crore, flattish Y-o-Y. Earnings before interest tax depreciation and amortisation for the quarter stood at Rs 361 crore with corresponding Ebitda margins at 14.9 per cent, up 30 basis points sequentially.
Those at ICICI Direct say that growth at CIE Automotive is delayed but not denied as the brokerage expects its topline and bottomline to grow at a CAGR of 6 per cent, and 10 per cent, respectively over CY23-25E. Ebitda margins are seen at 15-16 per cent band over CY23-25E with RoCE in a similar timeframe pegged at 15 per cent.
The brokerage assigned a ‘Buy’ rating on CIE Automotive tracking healthy growth opportunities at its Indian operations, focus on margins and efficiencies at its European business, steady margin profile and consistent healthy cash flow generation. It gave target price to CIE of Rs 600 i.e. 24x PE on CY25E. On Thursday, the stock of the company was trading 0.57 per cent down at Rs 481.65 per share on the BSE.
Another company that has fuel to power its scrip upwards is the real estate firm Mahindra Lifespace Developers and part of the Mahindra Group. The company saw a weak quarter four of financial year 2023-24, where it reported marginal decline in net profits to Rs 97.89 crore from Rs 101.43 crore in the preceding year. The company's total income fell to Rs 279.12 crore last fiscal from Rs 659.56 crore in FY2022-23. Despite this, the momentum among analysts remains upbeat for the real estate company.
“MLD has outlined ambitious business growth of 5x over the next 5 years from 2300 crore of residential and IC business sales in FY23 to Rs 8000-1000 crore by FY28. It has announced land bank addition with revenue potential of Rs 4400 (3.58 mn sq feet) in FY24,” Bhupendra Tiwary of ICICI Direct wrote in a report.
Furthermore, Mahindra Lifespaces has business development pipeline Rs 5000-6000 crore alongwith Rs 7000-8000 crore worth Thane project likely to be launched in FY26, analysts said.
Owing to the management’s focus on expanding scale and a comfortable balance sheet, the brokerage maintained its ‘Buy’ rating at target price of Rs 740 for Mahindra Lifespaces. On Thursday, the company’s stock was trading 1.56 per cent lower at Rs 605.05 per share on the BSE.