Domestic brokerage firm HDFC Securities has released its reports on Ircon International, Rail Vikas Nigam (RVNL), Care Ratings and The Anup Engineering. These stocks have remained in the limelight at the Dalal Street recently and the brokerage sees an upside potential of 22 per cent in these counters. Here’s what HDFC Securities has said about these stocks:
The Anup Engineering | Buy | Target Price: Rs 1,021 & Rs 1,115 | Time Horizon: 2-3 quarters | Return Potential: 22%
HDFC Securities said that The Anup Engineering has demonstrated combination of sustained growth and superior operating margin. Over the years, the company has been able to maintain superior operating margins 24- 27 per cent and PAT margin of 17-22 per cent. The company has a strict control over its overheads while keeping optimum product mix, it said.
“The new CEO has articulated its vision with a clear agenda to diversify product categories, improving exports share and expanding capacities & capabilities. We think the base case fair value of the stock is Rs 1,021 and the bull case fair value is Rs 1,115 over the next two-three quarters. Investors can buy the stock in the band of Rs 908-925 and add more on dips to Rs 825-845 band,” it said.
Care Ratings | Buy | Target Price: Rs 708 & Rs 748 | Time Horizon: 2 quarters | Return Potential: 17%
CARE seems to back on track after the turmoil in the top management seen in 2021. It is fast catching up with its two large competitors. The gap in valuation with the two competitors is large even granting the shareholding by foreign promoters in the other two. CARE also has cash and cash equivalents as on September 30, 2022 of Rs 187 per share, said HDFC Securities.
“We believe investors can buy the stock in the band of Rs 635-650 and add on dips in Rs 560-575 band for a base case fair value of Rs 708 and bull case fair value of Rs 748 over the next 2 quarters,” it said in its initiating coverage report on the counter.
IRCON International | Buy | Target Price: Rs 70 & Rs 70.55 | Time Horizon: 2-3 quarters | Return Potential: 20%
HDFC Securities is comfortable on the strong long-term outlook and revenue growth in the upcoming years for IRCON. It is an integrated engineering and construction company having expertise in major infrastructure sectors including railways, highways, bridges, flyovers, tunnels, metro, railway electrification, EHV sub-stations, electrical.
“At the current levels, the stock offers 3.97 per cent dividend yield. We think the base case fair value of the stock is Rs 70 and the bull case fair value is Rs.75.55 over the next two-three quarters. Investors can buy the stock in the band of Rs.62-64.25 and add more on dips to Rs.54.25- 56.25 band,” it said.
Rail Vikas Nigam (RVNL) | Buy | Target Price: Rs 81 & Rs 86.5 | Time Horizon: 2-3 quarters | Return Potential: 20%
HDFC Securities said that the management expects revenue to grow at CAGR of over 20 per cent in the coming few years on the back of strong order book and new order inflows. RVNL follows an asset light business model, which helps keep its fixed asset part lower, helping it to keep its balance sheet stress free, and resulting in lower inventory days.
“Looking at the strong prospects we believe the stock is available at reasonable valuation. Its cash and investments per share are Rs 22.3 which is 31 per cent of its current prices. We feel investors can buy the stock in Rs 71-74 band and add further in Rs 64-66 band for base case target of Rs 81 and bull case target of Rs 86.5 over the next 2-3 quarters,” it said.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)
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