11 small and midcap high-conviction stock ideas from InCred Equities

InCred Equities has an Add rating on Ashok Leyland with a target price of Rs 205.

"The Government of India’s capex and FAME program extend strong growth visibility for tipper trucks and buses, which form 50% of the industry. StrongIIP growth and freight rates give visibility on sustenance of the uptrend for the haulage segment. We expect the commercial vehicle uptrend to sustain in FY24F-25F and scale a new peak," it said.

Brokerage firm InCred Equities maintained an Add rating on Bharat Forge with a target price of Rs 1110.

"In the defence segment, Bharat Forge indicated a good response for its gun display at the recent defence exhibition, which helped in winning component and consumable export orders, and the company feels it can help ramp up defence product sales by 50% to Rs 7 bn in next three years," it said.

Brokerage firm InCred Equities has an Add rating on Container Corporation of India with a target price of Rs 940."We expect the proportion of rail container cargo from the three ports (JNPT, Mundra and Pipavav or GPPV) to rise from 25% (FY22) to 44% (FY25F). Concor is well placed to benefit as 81% of its FY23 originating EXIM cargo is from JNPT, Mundra and GPPV combined. We expect Concor’s originating cargo to grow by 68% over FY23-25F and build in a 400bp fall in its market share in rail cargo from the three ports over FY23F-25F," Incred Equities said.

InCred Equities has an Add rating on Dalmia Bharat with a target price of Rs 2,220.

"We like the company’s industry-leading cost structure, leadership in its key markets, strong brands with a rising premium share, rising share of renewables in its power capacity, strong focus on ESG, and an aggressive growth plan that could take its capacity up by ~3x in 2031F," it said.

InCred Equities has an Add rating on KEI Industries with a target price of Rs 2,598.

"KEI Industries intends to take price hikes for HW as B2C sales surpass 50% share. Faster execution of capex and a higher B2C mix could lead to higher-than-estimated revenue growth and EBITDA margin, respectively," it said.

The brokerage firm has an Add rating on M&M Financial Services with a target price of Rs 430.

"MMFS is set to participate in improving credit demand growth momentum. We are factoring in ~23% CAGR in assets under management (AUM) backed by ~41% CAGR in disbursement over FY22-25F. We believe MMFS will improve its profitability to 2.5% ROA/16.2% ROE by FY25F," it said.

The brokerage firm has an Add rating on Thermax with a target price of Rs 3700.

"We expect higher return ratios in the solutions business, including in green utilities such as solar- and wind-based opex. Solar energy business and subsidiary Thermax Onsite Energy Solutions (TOESL) have a good long-term profit potential with higher margin and return ratios," it said.

InCred Equities has an Add rating on BCL Industries with a target price of Rs 925.

"The company’s new plant in West Bengal has commenced production. Strong tailwind in ENA business to aid growth in volume as well as value terms. The company moving from 200klpd to 600klpd in terms of ethanol/ENA capacity, respectively, in the current financial year," it said.

InCred Equities has an Add rating on Camlin Fine with a target price of Rs 300.

"We bake in vanillin benefits in our FY24F estimates to arrive at an EPS of Rs15.1 for FY24F and Rs21.8 for FY25F. We value the stock at 20x FY24F EPS to arrive at our higher target price of Rs 300 from Rs 180 earlier," it said.

Brokerage firm InCred Equities has an Add rating on Globus Spirits with a target price of Rs 2,929.

Expansion in gross profit margin due to a rise in the selling prices of Indian Made Indian Liquor (IMIL) and softening broken rice and energy costs. Foray into new markets in the Indian Made Foreign Liquor (IMFL) segment. Launch of new products in the IMFL segment.

Brokerage firm InCred Equities has an Add rating on Spandana Sphoorty Financial with a target price of Rs 1,000

"The worst is behind on the asset quality front with the overall collection efficiency now strong. Geographically diversified loan book, we feel, will protect the company during a downturn," it said

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)