FY24 proved to be an exceptional year for equity markets worldwide, with Indian equity markets exhibiting outstanding performance. Throughout the year, Indian equities consistently achieved new all-time highs, accompanied by continuous surges in market volumes. In April 2024, mid and smallcap indices rallied by 6% and 11% respectively while the Nifty 50 index went up by only 1.2%. Here are the top 8 small and midcap ideas from Axis Securities:
Agencies
Axis Securities foresees an upside potential of 10% for Aurobindo Pharma to a target price of Rs 1,265. The company has a number of levers to grow its topline like generic injectibles, Eugia ($520 million sales) may grow by low double-digit growth based on value-added approval, the launch of Trastzumab biosimilars in H1FY25 and Pen–G injectible in H1FY25, and a one-time opportunity in gRevlimid in the next 2-3 years.
Agencies
An upside potential of 10% to Rs 1,815 from its current market price at Rs 1,647 is estimated by Axis for Lupin. The company has a strong pipeline of niche products for the US markets with limited competition. In a few of these products, Lupin has a first-mover advantage. The brokerage firm believes these products would increase the company’s gross margins by 150 bps in the next two years. Moreover, further developments in the business could add value in its business.
Agencies
Federal Bank shares are seen rallying up to Rs 180 by the brokerage from its current price at Rs 168. Despite the increase in the share of new higher yielding products, the increase in CoF continues to eat into the bank’s margins. Going forward, margin pressures are likely to persist in the near term, while yield improvement would be gradual. Delayed NIM recovery, improving core fee income, improving efficiency, and steady credit quality will drive ROA improvement for the bank.
Agencies
Neeraj Chadawar, analyst at Axis Securities estimates that CreditAccess Grameen may give returns as high as 34% to Rs 1,970, from its current level at Rs 1,466. He prefers CAGrameen amongst the microfinanciers, despite its premium valuations as the company has continued to outperform its peers across parameters and is eligible to trade at a premium vs. its peers.
ETMarkets.com
Axis Securities indicate a 14% upside potential for JTL Industries with a price target of Rs 275. The current market price of the stock is Rs 240. FY24 sales volume stood at 3.4 lakh tonnes, up 42% YoY, ahead of earlier growth guidance of 30% YoY. In Q4FY24, the VAP share improved to 24% (29% for FY24) from 20% in Q3FY24, as the maintenance of the galvanizing pot is over. 0.56 MT to 1 MT expansion is on track and will be complete before FY25. DFT facilities of 2 lakh tonnes out of the total incremental capacity of 4 Lc tonnes will start from Q1FY25.
Agencies
7/9
CIE Automotive India
The stock is currently at Rs 486 and as per the brokerage estimates, it signals an upside of 16% to Rs 565. We like the company’s growth story driven by its operational performance and focus on building an EV product portfolio, healthy order book position, strong FCF generations capabilities and capacity building to meet demand from India OEMs.
Agencies
Axis has set a target price of Rs 930, estimating a potential upside of 12% for Westlife Foodworld, from its current market price at Rs 829. The confidence in the company’s bright future prospects is supported by its strong execution track record of revenue/EBITDA growth of 17%/51% over FY16-20, which was driven by new product launches and cost rationalization programs (100-200 bps cost reduction every year).
ETMarkets.com
While pointing out that the road sector is witnessing encouraging development owing to increased government thrust on infrastructure investment, Axis has a buy call on PNC Infra with a target price of Rs 510, indicating an upside of 14%. Furthermore, diversification into Railways augurs well for the company implying lower dependence on road projects. The company reported good operating performance in Q3FY24 with Revenue/EBITDA/PAT growth of 11%/15%/17% which were broadly in line with estimates.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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