11 stocks from different sectors that can offer up to 42% gains

Rating: Buy

TP: Rs 56

Upside Scope: 14%

Investment Rationale

Reverse merger procedures are expected to finish by the end of CY2023. As part of the reverse merger, approximately 3 crore shares are expected to be cancelled on a net basis. This merger will result in Ujjivan experiencing a BV accretion of around Rs2 per share. We expect Ujjivan to report strong numbers in Advances/NII/PPoP with CAGR of 30/23/19% respectively, over FY23-25E. Resultantly, Ujjivan is well-positioned to deliver a RoAA/RoAE in the range of 2.7-3.0%/22-24%, during FY24-25E.

Rating: Buy

TP: Rs 2400

Upside Scope: 28%

Investment Rationale

Strong AUM growth driven by business diversification. The company has started cross-selling products (2W, Gold and MSME loans) of erstwhile Shriram City Union Finance in Shriram Transport branches. We remain positive and expect AUM/NII/Profit to grow at a CAGR of 16%/15%/15% over FY23-25E, with RoA and RoE of 3.2% and 15.3% in FY25E.

Rating: Buy

TP: Rs 4,700Upside Scope: 4%
Investment Rationale
Winning large defence orders of Pinaka rockets, ammunitions etc. as well as large explosives orders in mining tenders are key upside triggers.

Rating: Buy

TP: Rs 435

Upside Scope: 12%

Investment Rationale

Further scale-up in quarterly order inflows will enhance revenue visibility. Plus, large-sized after-market orders, similar to the Rs 1 billion order from SADC, South Africa.

Rating: Buy

TP: Rs 1,525

Upside Scope: 34%

Investment Rationale

Early ramp-up of Mukutban plant leading to higher than expected volume growth. Normalization of cost structure with a reduction in startup costs related to Mukutban expansion. Better demand and pricing prospects in the Central region esp. Uttar Pradesh which is a key state for Birla Corp with higher market share. Positive free cash flow generation and deleveraging over the next 3 years remains a key upside trigger.

Rating: Buy

TP: Rs 265Upside Scope: 4%

Investment Rationale

After 8 quarters, the hair oil market grew on the back of stronger growth in the urban market yet rural recovery appears to be promising. ADHO product extensions witnessed strong traction in E-commerce platforms on the back of platform and digital spending, expect investment to continue. On ADHO extension, the company launched body lotion (priced lower than Vaseline) and Shampoo (lower than Dove and similar price to Pantene) - expect to build strong traction.

Rating: BuyTP: Rs 522

Upside Scope: 16%


Investment Rationale
The gradual turnaround in FMCG foods to drive EBITDA margins from 7-8% to 12-13% in two years in our view. Growth in cigarette volume with improved consumer mobility (+15.0%). Focus on using data analytics to aid distribution, optimize the supply chain, and smart manufacturing extracting operating leverage. ITC trades at a discount to the 10-year average, given improved ESG scores, attractive valuation, and strong continuous performance we expect a sharp re-rating soon.

Rating: Buy

TP: Rs 570

Upside Scope: 17%

Investment Rationale

Jubilant Food stepped up Its efforts to revive LFL growth by, (1) re-imaging 1400+ stores to upgrade customer experience, (2) launching four new spicy ranges of Pizzas, in addition to Pizza Mania, and (3) guaranteed 20-minute delivery promise in Bengaluru. It has delivered consistent FCF over the past 10 years, yet at this time it trades 15-20% discount to EV/EBITDA.

Rating: Buy

TP: Rs 1809

Upside Scope: 21%

Investment Rationale

We expect profitability to increase 3x over FY23-25 and will drive strong return ratios – RoE to 29.5% in FY25 and RoCE to 26.4%.

Rating: Buy

TP: Rs 530

Upside Scope: 24%

Investment Rationale

Significant capacity addition, venturing into a new product category, and favorable consumer demand are expected to provide the growth impetus over the next three years. La Opala RG is prepped up for its next leg of growth with its new greenfield plant (commercialized in June 2022) of 11,000 tn capacity in Sitarganj, Uttarakhand. The plant is expected to run at peak utilization rate by the end of FY24 with a potential to clock ~Rs 5.5 bn of sales.

Apart from this, the company is also planning for a greenfield unit in Sitarganj for Borosilicate glass with capex of Rs 0.7 bn having a sales potential of ~Rs 1.1 bn. We expect sales/EBITDA/PAT to grow at a CAGR of 14%/16%/18% respectively over FY23-25E.

Rating: Buy
TP: Rs 5055


Upside Scope: 42%

Investment Rationale
Under-penetrated market, well-targeted customer base, patient capital allocation, and sharp execution would allow DMART to grow its top line at 24% CAGR over the next seven years. Healthy store openings and e-commerce expansion will remain key positives for the company. DMART opened 148 stores during the 4 years of FY20 to FY23, taking the total store count to 324. Average store size has grown at a CAGR of 4% over FY20-23 to 41,350 sqft. DMART management will continue to open 40-50 news stores every year.