If you’re considering which stocks to invest in during these volatile market conditions, the latest report from brokerage firm Prabhudas Lilladhar could provide valuable insights. They’ve identified six high-conviction stocks, primarily mid-cap companies, that they believe are solid investment options. Let’s delve into these recommendations.
1. Bharat Electronics (BEL)
Investment Outlook
Bharat Electronics Limited (BEL) stands out as a promising stock with robust long-term prospects. The company has a substantial order backlog and is poised to tap into approximately ₹50,000 crore worth of defense opportunities over the next two years. In addition to its core defense sector, BEL is expanding into civil, aviation, infrastructure, and railway segments.
Growth Potential
Prabhudas Lilladhar forecasts a revenue growth of 17.6% and an adjusted profit increase of 17.3% from FY 2024 to FY 2026. Following a recent market correction, the brokerage sees this as an ideal time for long-term investors to consider BEL, setting a target price of ₹341.
2. Crompton Greaves Consumer Electricals
Business Strategy
Crompton Greaves is focusing on strengthening its position in the Electrical Consumer Durables (ECD) sector. The company is actively introducing new products and expanding geographically while emphasizing in-house manufacturing to reduce costs and enhance profitability.
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Projected Growth
The brokerage anticipates a revenue growth rate of 13.2% and a net profit growth rate of 24.9% between FY 2024 and FY 2027. Given these figures, they have assigned a “Buy” rating to this stock with a target price of ₹536.
3. Cyient Ltd
Recent Developments
Cyient Ltd has recently acquired companies such as Cyient, Selfinest, and Grit Consulting, enhancing its presence in plant engineering, new energy transformation, and communications sectors. Although the global environment poses challenges, Prabhudas Lilladhar expects a recovery in the company’s performance during FY 2026 and FY 2027.
Valuation and Target
The current valuation of Cyient is seen as attractive, and the brokerage has set a target price of ₹2,120 for this stock.
4. JB Chemicals & Pharmaceuticals
Market Position
JB Chemicals & Pharma is expected to maintain its grip on the domestic market through its established legacy brands. The expansion of its medications such as Rezal, Azmarda, and Sanzyme is likely to drive growth. Additionally, new export market opportunities are emerging for the company.
Financial Projections
The brokerage projects an EBITDA growth rate of 18% and an EPS growth rate of 23.5% from FY 2024 to FY 2027. A target price of ₹2,100 has been established for this stock.
5. Jindal Stainless
Industry Trends
Jindal Stainless is well-positioned in the market, benefiting from the increasing usage of stainless steel due to its durability and strength. The brokerage anticipates a volume growth of over 15% for the company.
Market Opportunities
Key projects, including the modernization of railway stations and the expansion of metro networks, are expected to drive demand for stainless steel. Prabhudas Lilladhar predicts EBITDA and net profit growth rates of 20% and 25%, respectively, from FY 2024 to FY 2027, with a target price of ₹849.
6. Safari Industries
Consumer Demand
Safari Industries is a leading luggage manufacturing company in India. The brokerage expects a surge in demand due to the festive season, though increased competition may put pressure on margins.
Growth Forecast
Prabhudas Lilladhar forecasts a 21% annual growth rate in sales from FY 2024 to FY 2026, bolstered by a new greenfield factory. The target price for this stock is set at ₹3,005.
Disclaimer
These six stocks present compelling opportunities for investors looking to navigate the current market landscape. With their strong fundamentals and growth prospects, they may offer significant returns in the coming years. As always, potential investors should conduct their own research and consider their financial situations before making investment decisions.
