2 Best Stocks To Buy Today: Motilal Bets On Two Large Cap, Mid Cap Stocks For 41% Return

Leading brokerage firm Motilal Oswal has suggested investors to buy two best stocks for higher returns. These stocks are APL Apollo Tube and Piramal Enterprises Ltd. The brokerage firm has recommended investors to buy APL Apollo Tube with a target price of Rs 1340 apiece and Piramal with a target price of Rs 1160 apiece. If you buy Apollo Tube and Piramal today, you will get maximum return of 41%. Check vital details below:

1. Piramal Enterprise Ltd

The brokerage firm has recommended investors to buy Piramal Enterprises with a target price of Rs 1160 apiece and a potential return of 41%. The current market price of Piramal is Rs 825 apiece.

The company has a market capitalisation of Rs 19,689 crore. The large cap company, operating in diversified sector, has given a return of 2% in last 1 month. The stock has declined 69% in last 1-year.

According to Motilal Oswal, "We have cut our target multiple to 0.8x P/BV (earlier: 1x) for the Lending business. We arrive at our SoTP-based TP of INR1,160 (FY24E based) and maintain our Buy rating."

Over the past two years, PIEL has: a) strengthened its Balance Sheet by running down its Wholesale loan book; b) improved the texture of its borrowings, c) targeted lower cost borrowings; and d) fortified itself against contingencies, with ECL provisions at 8.6% of AUM, added Oswal.

2. APL Apollo Tube Ltd

Motilal Oswal has suggested investors to buy APL Apollo with a target price of Rs 1340 apiece and a potential return of 30%. The current market price of APL Apollo is Rs 1031 apiece.

The mid cap company has a market capitalisation of Rs 25,877.75 crore. The mid cap company, operating in Metals sector, has given multibagger returns with last 5-years return at 437%, and 3-years return at 624%.

According to Motilal Oswal, "We largely maintain our earnings estimates for FY23/FY24 on the back of a higher margin, with an increasing share of VAP and a ramp up at the Raipur plant. We maintain our Buy rating and value the stock at 33x Sep'24E EPS to arrive at our TP of INR1,340."

APAT reported a weak operating performance, with an 18%/26% YoY decline in gross profit/EBITDA per MT in 2QFY23. Margin was adversely impacted by an adverse sales mix (8pp YoY decline in VAP mix), channel destocking, and higher cost of the Raipur plant.

Disclaimer

The stocks have been picked from the brokerage report of Motilal Oswal. Greynium Information Technologies, the Author, and the respective 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 decision.