Elara Securities has initiated coverage on the chemicals sector and has picked five stocks that it believes may deliver decent returns going ahead. This is even as these stocks ran up 46-537 per cent in the past two years. They included SRF (up 199 per cent), Gujarat Fluorochemicals (up 537 per cent), Aarti Industries (up 46 per cent), Atul (up 55 per cent) & Navin Fluorine International (up 99 per cent). Here's what the brokerage said on the stocks:
iStock
2/6
SRF
The brokerage has a target of Rs 3,085 on the stock, implying over a 20 per cent upside from the current levels. The brokerage expects Ebitda CAGR of 15.4 per cent over FY22-25 and 12.8 per cent over FY25-30. The implied target is 21.8 times FY24 EV/Ebitda and 34.3 times FY24 PE. The stock currently is trading at 18.1 times FY24E EV/Ebitda and 28.3 times FY24 PE.
Agencies
3/6
Gujarat Fluorochemicals
The brokerage has an 'accumulate' rating on the stock with a target of Rs 3,809, implying a 14 per cent upside from the current level. We expect an Ebitda CAGR of 29.4 per cent over FY22-25E and 13.3 per cent over FY25-30. The implied target is 20.5 times FY24 EV/Ebitda and 30.3 times FY24 PE, it said. The stock currently is trading at 17.7 times FY24 EV/Ebitda and 26.8 times FY24 PE.
Agencies
4/6
Aarti Industries
5/6
Atul
The brokerage has an 'accumulate' on this stock, with a target price of Rs 10,614, implying a 16 per cent upside from current levels. The brokerage expects an Ebitda CAGR of 19.3 per cent over FY22-25 and 15.7 per cent over FY25-30. The implied target is 22.9 times FY24 EV/Ebitda and 35.3 times FY24 P/E. The stock currently is trading at 20.1 times FY24E EV/Ebitda and 31.1 times FY24 PE.
Agencies
6/6
Navin Fluorine International
Elara has an 'accumulate' rating on Navin Fluorine with a target of Rs 4,821 It expects an Ebitda CAGR of 35.4 per cent over FY22-25 and 38.0 per cent over FY25-30. The implied target is 34.2 times FY24 EV/Ebitda and 51.8 times FY24 PE. The stock currently is trading at 30.6 times FY24E EV/Ebitda and 45.9 times FY24E PE.
