November picks: 11 mid & smallcap ideas by Axis Securities for up to 31% returns

Axis Securities has a buy with a target price of Rs 1850, implying an upside potential of 16%, on this cement counter. Capacity expansion will sustain growth as well as a strong diversified hold in the markets of South, East and North East India make the brokerage bullish on the counter.

For the cable company, the brokerage has suggested a buy with a target price of Rs 3080, suggesting probable gains of up to 10%. There is strong demand and the margins are also seen improving going ahead. The brokerage believes growth will be driven by demand recovery, new product launches, product premiumisation, and increasing contribution of exports over the long run. We roll forward our estimates to FY25E and value the company at 27x FY2EE EPS of Rs 114 to arrive at a target price of Rs 3,080/share.

The private sector lender has been accorded a buy rating with a target price of Rs 155. This suggests an upside potential of over 16%. A few of the positives seen for the lender are improving deposit base, manageable asset quality as well as good growth in credit offtake. “The bank is cautiously building a loan mix towards high-rated corporate and retail loans. The bank’s liability franchise remains strong with CASA plus Retail TD of over 90% and one of the highest Liquidity Coverage Ratios (LCR) among banks. Restructuring levels are also under control,” noted the brokerage.

The bottling major Varun Beverages is another stock pick of Axis Securities and for this stock, the brokerage has set a target price of Rs 1,300. This suggests gains of over 15% gains. Volume gains, new plants, as well as better macros, improve the outlook for Varun Beverages.

On the commercial vehicle major, the brokerage has a target price of Rs 175, implying gains of over 17%. The company’s market share gains, CV upcycle as well as EV push through separate entity Switch Mobility will be lucrative for the company.

Axis Securities has a target price of Rs 2500 per share on Astral, implying 21% gains for the stock. “Astral reported Q4FY22 consolidated revenue growth of 23.3% YoY, majorly led by growth in segments plastic (+22.3% YoY) and Adhesive (+27% YoY). In the plastic segment, the company reported Q4FY22 and FY22 volume growth of 11% and 9.5%, respectively. The volume growth stood above the industry growth, indicating that Astral gained market share in FY22,” noted the brokerage.

For the footwear stock, Axis Securities has suggested a target price of Rs 2200, which implies gains of over 18%. The demand from consumers is expected to come out strong post Covid. Also, the company’s omni and digital channels of distribution shall offer a good boost.

For the tubes and pipes company, the brokerage has set a target price of Rs 1200, which means potential gains of over 10%. The company’s new plant will facilitate volume gains for the company. “The capex from internal cash accruals targeting capacity addition (Raipur plant with value-added portfolio), value addition at other low margin plants and cost savings augur well for the company,” said the brokerage.

For the healthcare company, the brokerage has set a target of Rs 330 that suggests gains of over 13%. The brokerage is of the view that the company is on the cusp of turning around its operating profitability with operating EBITDA margins expected to improve by 680bps over FY21-FY24E.

The multibagger heavy engineering stock is seen to gain another 31%, says the brokerage as it has a target of Rs 550 on the counter. “Praj is witnessing strong growth in its key segment Bioenergy in domestic business and increased interest in grain-based distilleries while decarbonization impetus augurs well for Praj. The development in other key verticals such as CPS, ZLD & High Purity is also gaining traction. Praj is a key beneficiary of multiple tailwinds provided by the bio-economic revolution, giving strong growth & revenue visibility for the next 3-5 years. The company's key growth levers remain strong & therefore we maintain our BUY rating,” noted the brokerage.

For the tea and coffee enterprise, the company has set a target price of Rs 600, suggesting gains of over 19% from the current price. The brokerage is bullish on the counter for a host of reasons, including strong footing in the international markets as it continues to gain market share and access new business, a cost-efficient business model, doubling of Vietnam's capacity from the current 13,500 MT to 30,000 MT and new capacity expansion in India, leading to strong volume growth visibility for the next 2-3 years, capacity addition in the value-added products (FDC and small packs), and foray into high margin branded retail business (Continental Coffee, Plant-based meat protein).
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)