Brokerages maintain 'buy' on these 10 stocks with 18-51% upside

On October 13 the benchmark indices ended flat with a positive bias in a volatile session. At close, the Sensex was up 31.71 points at 40,625.51, and the Nifty was up 3.50 points at 11,934.50.

ITC | Rating: Upgrade to buy from outperform | Target: Rs 220 | LTP: Rs 170 | Upside: 29 percent According to CLSA, the long-term positives were unfolding as revenue diversified. The FMCG segment is set to become a major value-driver. The cigarette business is providing cash to meet its ambitious goals. It expects FMCG to deliver an EBITDA CAGR of 30% in FY20-23, while value-accretive acquisitions and improving capital allocation will provide support, CNBC-TV18 reported.

L&T | Rating: Buy | Target: Rs 1,280 | LTP: Rs 896 | Upside: 42 percent. Research house Jefferies says that in two years, company should have surplus cash flows to reward shareholders. The management has not met its five-year target of 18% RoE by FY21, while prudent capital allocation, E&C revenue recovery and improving RoCE are the triggers, CNBC-TV18 reported.

Adani Ports | Rating: Buy | Target: Rs 420 | LTP: Rs 350 | Upside: 20 percent. Krishnapatnam Port acquisition was at EV of Rs 12,000 crore versus the previous value of Rs 13,572 crore and the new deal value accretive by Rs 10.40 for equity holders, said Nomura. The FY21 EBITDA estimates largely incorporate the COVID-19 impact. The management’s estimate of EBITDA of Rs 1,200 crore seems realistic, CNBC-TV18 said.

Bharat Forge | Rating: Buy | Target: Rs 580 | LTP: Rs 458 | Upside: 26 percent. According to CLSA, the business metrics for various end-markets is trending upwards and order data for US trucks (20% of revenue) is pointing towards acceleration. India Trucks (11% of revenue) have started to recover from a low base, while PVs vehicles are starting to recover in India as well as in export markets. CLSA expects revenue CAGR of 11% over FY20-23, CNBC-TV18 reported.

Sun TV | Rating: Buy | Target: Rs 568 | LTP: Rs 442| Upside: 28 percent. Nomura expects the company to report a 25 percent YoY fall in advertisement income in Q2. Its viewership trends suggest some slippage in market share in Tamil. On the subscription side, it expects a 17 percent YoY growth in revenues, while overall revenues should be up 2% YoY in Q2. The large part of IPL revenue/EBITDA benefits to accrue only in Q3, reported CNBC-TV18.

Bandhan Bank | Rating: Buy | Target: Rs 400 | LTP: Rs 320 | Upside: 25 percent. CLSA says the bank will see high growth and industry-leading return ratios in the medium term. The focus products are high yielding, operationally intensive and smaller in ticket size. The Gruh Finance acquisition gives a fillip to its affordable housing finance business. Its deposit franchise scale-up the fastest among private sector banks, CNBC-TV18 reported.

Container Corporation of India | Rating: Buy | Target: Rs 525 | LTP: Rs 363 | Upside: 44 percent. EXIM rail container cargo in September grows YoY for the first time since lockdown. The company’s volumes directionally mirror this trend. Jefferies' Q2 volume expectations are 25 percent YoY decline, which could see some upside. It believes the company has the potential to double over the next three years and stocks could re-rate as volumes pick up and news of DFC commissioning builds up, reported CNBC-TV18.

Vedanta | Rating: Buy | Target: Cut to Rs 130 from Rs 150 | LTP: Rs 99.65 | Upside: 30 percent. The delisting offer has failed and awaits commentary on further action, said research house Citi. It has cut FY21-23 EBITDA estimates by 1-4 percent. The balance sheet and minority shareholder worries will put downward pressure and expect underlying fundamental & dividend support, reported CNBC-TV18.

Zee Entertainment Enterprises | Rating: Buy | Target: 275 | LTP: Rs 182 | Upside: 51 percent. Research house Citi expects a relatively steady Q2 operational performance. The key is to get updates on receivables/guarantees w.r.t. Siti. The company has committed to manage incremental related-party dues/exposures better. Improvement in working capital and net cash generation critical to partial re-rating, reported CNBC-TV18.

Zee Entertainment Enterprises | Rating: Buy | Target: 275 | LTP: Rs 182 | Upside: 51 percent. Research house Citi expecting a relatively steady Q2 operational performance. The key is to get updates on receivables/guarantees w.r.t. Siti. The company has committed to manage incremental related party dues/exposures better. Improvement in working capital & net cash generation critical to partial re-rating, reported CNBC-TV18.