Motilal Oswal Sees Return Potential Up To 53% in 2 Mid Cap, 1 Large Cap, Gives Buy Call

Leading brokerage firm Motilal Oswal has recommended three stocks for investors that has a strong return potential of up to 53%. The brokerage has assigned buy call on these stocks namely, V-Mart Retail Ltd, IIFL Wealth Management Ltd, and Oberoi Realty Ltd. Check key takeaways below:

1. V-Mart Retail Ltd

The current market price of V-Mart Retail Ltd is Rs 2,801 apiece with an intraday gain of 2.08% The company has a market capitalisation of Rs 5,537 crore as of writing the report. The 52-week high of V-Mart is Rs 4,620 apiece and 52-week low is Rs 2406 apiece, respectively.

The stock has given a 5-years return of 94% and 3-years return of 33%. The mid-cap company operates in retail sector and came into existence in 2022. Motilal Oswal has given buy rating to V-Mart Retail Ltd with a target price of Rs 4,210 and a potential return of 53%.

According to Motlial Oswal, "VMART acquired Limeroad (a value fashion online marketplace player) for INR311m (0.45x P/Sales on FY22). The deal will help VMART strengthen its online presence in Tier 2/3 markets. VMART will fund the acquisition through internal accruals as it has a cash balance of INR1.6b."

V-Mart plans to further invest INR1.5b to scale up the business and achieve profitability, added Motilal Oswal. 

2. IIFL Wealth Management Ltd

The current trading price of IIFL Wealth is Rs 1877 apiece with an intraday decline of 0.18%. The stock's 52-week high is quoted at Rs 1945 apiece and 52-week low is quoted at Rs 1225 apiece, respectively.

The company has a market capitalisation of Rs 16,681 crore as of writing the report. The stock has given a 5-years return of 48% and 3-years return of 56%. The mid-cap company was incorporated in 2008 and operates in NBFC Sector. Motilal Oswal has given buy call with a target price of Rs 2300 apiece and a potential return of 22%.

According to the brokerage firm, "We expect a significant improvement in profitability on the back of a marked reduction in employee costs, due to: 1) completion of the soft landing needed to retain RMs (relationship Managers) during this business transition, and 2) one-time payments in FY22 to attract new talent. Scale benefits will also help improve PBT (Profit Before Tax) margin to 56.1% in FY25E from 43.9% in FY22. The stock currently trades at an attractive FY25E P/E of 18.5x, given its strong earnings CAGR of 16% over FY22-25E. We reiterate our Buy rating with a one-year TP of INR2,300/share."

3. Oberoi Realty Ltd

The current market price of Oberoi Realty Ltd is Rs 864 apiece with an intraday gain of 0.78%. The 52-week high of Oberoi Realty Ltd is quoted at Rs 1088 apiece and 52-week low is quoted at Rs 726 apiece, respectively.

The company has a market capitalisation of Rs 31,426 crore. The stock has given a 5-years return of 86% and 3-years return of 60%. The large cap company operates in Real Estate Sector and came into existence in 1998. Motilal Oswal has given buy rating to Oberoi Realty with a target price of Rs 1100 and a potential return of 28%.

According to the brokerage, "Because of the delayed execution at Mulund projects, we reduce our FY23/FY24 EBITDA estimates by 13%/12%, respectively. Management indicated a strong visibility on business development that will  Management indicated a strong visibility on business development that will provide further growth visibility and will be a key re-rating trigger. Reiterate BUY with an unchanged SOTP-based TP of INR1,100, implying 28% upside."

 

Disclaimer

The stocks have been picked from the brokerage report of Motilal Oswal Financial Services. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decisions.