Kotak Securities Picked These 7 Quality Stocks To Buy & Add In January For Return Up To 58%

Kotak Securities, a renowned brokerage firm, has picked 7 stocks as its Top Picks for January 2023 with "Buy" and "Add" ratings. With an attractive valuation, the brokerage claims robust gains in the stocks in 2023. The listed 7 stocks are Century Plyboards (India) Limited, Cipla Limited, Cummins India Limited, Info Edge (India) Limited, PB Fintech Limited, PCBL Limited, and TCI Express Limited. Here we have listed these 7 stocks with the potential upside and other details:

1. Century Plyboards (India) Limited (Centuryply) - BUY 

The brokerage assigns a target price of Rs 687 apiece to the stock. With the given target price, the stock is likely to give 33% return in 12 months. On NSE, the stock last traded at Rs 517.60 apiece. The stock fell 9.07% in 1 month, and 17.84% in 3 months, respectively. It fell 18.13% in the past 1 year. It gave 213.03% multibagger return in the 3 years, and 50.33% positive returns in 5 years, respectively. 

Rationale

Q2FY23 - Centuryply's revenue and adjusted EBITDA came on expected lines. Centuryply aims to achieve revenue of Rs5,000 cr by FY26E. Company is investing in brownfield and greenfield expansion across segments. "We expect earnings per share (EPS) to grow by 9.7% in FY24E and 18.7% in FY25E. We value the stock at a PE of 30x on FY25E earnings," the brokerage has said. 

2. Cipla Limited (Cipla) - BUY

Kotak Securities has assigned a buy on the stock of Cipla with Rs 1,295 apiece target price. The brokerage claims a potential upside of up to 21% from its current level. The stock is currently trading at Rs 1,076.35 apiece on NSE. The stock has fallen 3% in 1 month and 5.12% in 3 months, respectively. It has given 16.74% in 1 year, 130.61% in 3 years and 74.97% in 5 years, respectively.

Rationale

Ex-gRevlimid, Cipla's Q2FY23 was largely in line with estimates. US pipeline provides confidence over medium-term growth. Compelling growth story beginning to unfold; Gaining ground across key markets. Raise FV to Rs1,295 (Rs1,215 earlier), includes NPV of Rs22/share from gRevlimid. Reiterate BUY; Roll forward to Sep24.

3. Cummins India Limited (CIL) - BUY

The brokerage has assigned a "Buy" on the stock of CIL with Rs 1,560 apiece target price, It claims 13% potential upside from its current market price. The stock last traded at Rs 58.70 apiece on NSE. The stock surged 3.69% in 1 week and fell 1.22% in 1 month, respectively. It has given 52% in 1 year and 150.81% multibagger return in 3 years, respectively. It gave 49.54% positive returns in 5 years. 

Rationale

CIL may alter its defensive stance on pricing after seeing gross margin improvement. There is positive outlook on margin from its key peer in Kirloskar Oil Engines (KOEL). "We factor in ~16.5% margin in FY25 and are ~10% higher on our standalone Earnings per share (EPS) estimates versus consensus. We factor in quick pricing moves & 60 bps higher EBITDA margin in our revised FV," the brokerage has said. 

4. Info Edge (India) Limited (INFOE) - ADD

The brokerage has assigned an "Add" call on the stock with a target price of Rs 4,900 apiece. According to the given target price, it could give 33% returns on investments. The stock last traded at Rs 3,687.05 apiece on NSE. The stock has fallen 33.82% in the past 1 year. However, in the past 3 years, it surged 46.432% and in the past 5 years it surged 160.66%, respectively.

Rationale

Non-IT hiring remains buoyant for Naukri despite some headwinds in IT hiring. Way forward: continue to invest in 99acres; fine-tune Jeevansathi strategy. We like its's market-leading position in - recruitments & real estate classifieds space. Value at Dec'24 P/E multiple of Naukri at 40x; P/Sales multiple of 99acres at 10x. 

5. PB Fintech Limited (POLICYBZ) - BUY

Kotak Securities recommends buy the stock for a target price of Rs 730 apiece. If you buy the stock at the current market price, it would give a potential return up to 59% considering the given target price. The current market price (CMP) of the stock on NSE is Rs 460.60 apiece. Since its date of listing the stock has fallen 61.69%, given a negative return. It was listed on 15 November 2021 on the stock exchange. It surged 2.74% in a week. However, it has fallen 48.28% in 1 year.

Rationale

Continued business momentum in Q2FY23; 79% growth in premium. The company continues to be on its path to profitability. "We are tweaking near-term estimates to build in current trends. Remain a bit more conservative than management's profitability guidance. Retain BUY; Fair value Rs. 730," the brokerage has said. 

6. PCBL Limited - BUY

The brokerage placed a buy on the stock with a target price of Rs. 180 apiece. According to the given target price, if you buy the stock at the current market price you can anticipate gains up to 43%. The stock on the NSE last traded at Rs 126 apiece. The stock has given 7.23% positive return in 1 year and 104.3% multibagger return in 3 years, respectively Whereas, it gave 1.06% negative return in 5 years. 

Rationale 

PCBL is India's largest & seventh largest carbon black producer globally. Strong demand supply dynamics to absorb new capacity. EBITDA/kg to increase gradually with change in product mix. Strong earnings, low leverage and improving return ratios. Initiate with a BUY rating and a target price of Rs180, valuing at 10x FY25E earnings. 

7. TCI Express Limited (TCIEXP) - BUY

The brokerage has assigned a buy on the stock with Rs 2,275 apiece target price. With the given target price, the brokerage claims a 26% potential upside from its current level. The last traded share price of the stock on NSE is Rs 1,816 apiece. The stock fell 14.51% in 1 year. However, it has given 156.9% multibagger return in 3 years and 215.69% multibagger return in 5 years, respectively. 

Rationale

TCIEXP is leading ground express player & claims market share of ~7%. Over the last 7 years TCIEXP has reported healthy growth. "We expect earnings to grow by 27.3% in FY24E & by 24.3% in FY25E. Stock is currently trading at 29.0x P/E FY25E earnings. We initiate coverage on TCIEXP with a TP of Rs 2275 at 37x FY25E earnings," the brokerage has said. 

Disclaimer

The stocks have been picked from the brokerage report of Kotak Securities. 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 consult with certified experts before making any investment decision.