Ajanta Pharma among top 10 midcap, smallcap high-conviction stock ideas for May

May 07, 2024, 10:23:44 AM IST1/11

Stock Tips

While Nifty and Sensex have been striking new highs for the past few months now, the midcap and smallcap index are also rising at a fast pace. BSE midcap index has jumped 13.7% YTD while the BSE smallcap index has risen nearly 9% this year alone. InCred equities has recommended adding small and midcap stocks to your holdings in the month of May. Here are the top 10 ideas:

2/11

Ajanta Pharma

A relatively slower growth in the US in FY26 assuming higher price erosion has been built for Ajanta. If current US dynamics prevail, in a bull case scenario, there can be an upside to the US numbers as well as margins. The stock trades with a strong margin profile, a debt-free balance sheet and consistent returns profile.The stock can rise up to Rs 3,000 in the next two years.

3/11

APL Apollo Tubes

Domestic growth due to local manufacturing outside India and exports sales volume from Indian plants can surprise the investors positively.Based on a P/E of 46x, the target price for Apollo Tubes has been set at Rs 1,814.

4/11

Ashok Leyland

Due to sustainability of the commercial vehicle upcycle from infrastructure spending push, market share gains in recent quarters and easing ASP discounts in the industry, InCred foresees a positive outlook for the stock.The brokerage firm states a target price of Rs 280 for the stock.

5/11

​Aurobindo Pharma

Strong earnings optionality from the MSD deal and margin upside should improvethe valuation and at 14.3x FY26F EPS, Aurobindo Pharma’s valuation is reasonable, according to Incred. The brokerage suggests buying the stock, with a target price of Rs 1,178.

6/11

BCL Industries

“BCL is an agro-energy giant in the making because of profitability moving up due to lower raw material and fuel costs, which benefits from higher prices of maize-based ethanol,” says Incred. Based on this, it is recommended to add the stock with a target price of Rs 95 and Rs 142 in a bull-case scenario.

7/11

Bharat Forge

Considering the industrial division’s acceleration seen in recent quarters and improved visibility on defence, aerospace and construction equipment orders, an 8% sales CAGR can provide an EPS of Rs.41 by FY26F. This may lead the stock to jump up to a target price of Rs 1,440.

8/11

Camlin Fine Science

“We are building in 3,000t of vanillin sales in FY24F, and consequently the loss from catechol sales to decline to US$5m (vs. US$9.9m in FY23) and lead to an increase in gross profit by Rs 3bn,” said Incred in its report. They further recommended adding the stock for a target price of Rs 300.

9/11

Concor

Indian Railways’ EXIM (export-import) container cargo rose by 25% YoY in Aug-Oct 2023. This may be due to commissioning of the Dadri-to-Rewari stretch of the Indian Railways’ Dedicated Freight Corridor or DFC in May 2023. Post DFC commencement, it is believed that rail wagons will be able to handle 4x volume vs now due to double-stacking and quicker speed.InCred states the target price of Rs 1,083

10/11

Cyient

We expect Cyient DLM’s EBITDA margin to increase from 10.6% in FY23 to 11.5% in FY26F led by improvement in the product mix from Build-2-Print (B2P) to Build-2-Specification (B2S). Cyient DLM is likely to register a 37% topline growth over FY23-26F with good margins coupled with 74% PAT CAGR. The brokerage has set a target price of Rs 1,049 for the stock.

11/11

​Data Patterns (India)

Data Patterns (India) is actively exploring possibilities in the export market and forging partnerships to supply components to foreign OEMs and win an annuity-based contract from a leading player in the civilian and defence aerospace industry. Adding the stock is recommended with a target price of Rs 3,850.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Read more on

For more details: Read More