Stock views: Emkay Global's top conviction ideas for September

Here are some of the top stock ideas from Emkay Global

Chambal Fertilisers; BUY; Target Price: Rs 158

With the sale of shipping assets, Chambal has exited from all non-core businesses and has thus become a pure play on Fertilisers and Agri Inputs. We believe this would trigger a re-rating, as the company’s ROCE profile will improve. Fertiliser segment enjoys higher ROCE at 14-15% compared to the Shipping segment where ROCE is ~5-6%. Due to the huge capex, we expect ROCE to remain depressed over FY18-19, post which it should come back to 15% from FY20E. We assign a BUY rating, valuing the company at 12x FY19E EPS of Rs13.2.

Cholamandalam Finance; ACCUMULATE;