Saturday, November 8, 2014

7 midcap stocks to bet post Sept quarter results

Midcap stocks are flavour of the season. The index is up 49% year-to-date and in 6 months it has jumped 35.90%. The BSE Midcap index touched its all-time highs of above 10,000 that it scaled in early 2008. ICICI Direct recommends 7 midcaps stocks to buy post September quarter results.

So, if you have been fence sitting and want to buy some midcaps, here are some stocks to buy.

Pidilite Industries

Rating: BUY

Potential upside: 16%

Target: Rs 462

Rationale: Estimate revenues, earnings CAGR of 19% in FY14-17E on the back of intact demand from tier II, tier III cities. A recovery in margin coupled with strong return ratios would justify the company’s re-rating possibilities.

IRB Infrastructure

Rating: HOLD

Target: Rs 269

Potential upside: Given the strong order of Rs 11,587 crore providing strong revenue visibility, see its earning to grow at 22.6 percent CAGR during FY14-16E. However, most of the positives have already been priced in the CMP. Hence, maintain HOLD.

Gujarat Pipavav Port

Rating: HOLD

Target: Rs 175

Potential upside: 3%

Rationale: With debt-free structure and ECB for funding further capex, interest cost is expected to decline substantially. Further, its higher revenue visibility and better margin on account of fixed cost model together with revenue from tank farms will provide further upside.

Gateway Distriparks

Rating: BUY

Target: Rs 330

Potential upside: 14%

Rationale: As container volumes at major ports like JNPT andChennai post growth of 9% and 5% YoY, respectively, in YTD, we expect the CFS segment to post confident growth.

East India Hotels

Rating: BUY

Target: Rs 124

Potential upside: 19%

Rationale: In terms of earnings, expect sales CAGR of 6.8% during FY14-16E coupled with expansion in margins.

Taj GVK Hotels

Rating: BUY

Target: Rs 116

Potential upside: 13%

Rationale: Expect the hotel business in Hyderabad to improve post resolution of the Telangana issue over next two years. Further, expansion into newer geographies of Bangalore and Mumbai would provide the company with better scale and geographic diversity over the longer-term.

Greaves Cotton

Rating: BUY

Target: Rs 175

Potential upside: 25%

Rationale: A recovery in the engines business and complete exit from the infrastructure business may drive PAT CAGR at 18% over FY14-17E. Even with the improvement in GDP, we expect sales to witness 14% CAGR over the same period.
Source : Moneycontrol

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