1 Small Cap Auto And 1 Large Cap Real Estate Stock To Buy For Upside Upto 30%: ICICI Direct

In the current market turmoil, given the host of factors influencing Indian indices, while it shall be best not to try to catch the falling knife, brokerages given the fundamentals of the stock come with 'Buy' calls. Likewise, here are 2 stocks

Buy Pricol for a target price of Rs. 140; implying 30% potential upside

Pricol is an auto ancillary counter from the small cap category. The company based out of Coimbatore supplies various auto-components including instrument clusters, sensors & switches,pumps and mechanical products, telematics solutions and wiping systems.

Company's Q3Fy22 performance as per the brokerage: The company's operating income came in at Rs. 407 crore flat sequentially. EBITDA margin has been placed at 11.6%, down sequentially by 40 bps. PAT however recorded a surge of 18.5% QoQ at Rs. 17.3 crore tracking lower finance cost & tax rate

Stock's performance: The stock showed appreciation at a CAGR of 8.3%, rising from a price of Rs. 75 in March 2017 to currently Rs. 107.45, outperforming the overall Nifty Auto index.

Brokerage's rationale for a 'Buy': The brokerage has been bullish on the counter and maintains a 'Buy' owing to the management discipline with regard to capex as well as debut reduction. Also, the company's ambitious long term growth plans provide support to the company's earnings visibility going ahead. ICICI Direct values the stock of Pricol at Rs. 140 i.e.16x P/E on FY24E EPS of appx 8.7/share (earlier target price Rs. 95).

 

DLF: Buy DLF for a target price of Rs. 434; upside of 31.5% (considering the current market price of Rs. 330

ICICI Securities has upgraded the stock of DLF from 'Add' to a 'Buy'. However the target price has been retained at Rs. 434 per share after the stock has posted 13% price correction in the past one month.

DLF- Firing on all cylinders

The company has been faring well with 9MFy22 sales booking of Rs. 45.4 billion owing to the recent launch of the One Midtown Delhi project. Accordingly, the company has revised its FY22E devco sales guidance to Rs60-65bn (earlier Rs40bn). "With the recent plotted development launch in Chennai, we model for Rs66.4bn of FY22E devco sales and over Rs70bn each in FY23-24E. Further, with office re-openings and mall consumption picking up, we expect DCCDL's rental EBITDA to grow from Rs34.0bn in FY22E to Rs40.5bn inFY23E", said the brokerage report.

Disclaimer

The above stock picks are taken from the brokerage report of ICICI Direct. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. 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.