In this period of decline in the stock market, investors are looking for stocks with strong fundamentals and giving consistent returns. In the current round, there are two such stocks, in which there is a possibility of giving good returns with strength. These stocks are Piramal Enterprises Limited and Biocon, let us see what are the chances of making profits in these stocks and what rating and target price have been given by the brokerage firm companies.
Pyramid (PEL)
Target Price – Rs 3,050
Rating – BUY
Brokerage Firm – Jefferies
The recent DHFL deal has re-balanced Piramal’s portfolio. With this deal, Piramal can get a strong lead in the housing sector. A favorable property cycle, strong retail growth and a strong recovery from DHFL could drive Piramal’s lending business (loan business) a 14 per cent annual growth during FY 2022-24. On the other hand, EBIDTA 29 (2022-24) is showing a growth of 29 percent from pharma, CDMO project and hospital generic recovery.
During this period, the profit of Piramal Group can also increase by 22 percent. Therefore, this stock is being given a BUY rating with a target price of 3,050. The proposed de-merger of Piramal’s pharma and financial business will simplify its corporate structure and increase the focus of the management on individual businesses. This will increase transparency in financial matters and its positive effect will be seen on the shares of the company.
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Biocon
Target Price – Rs 360
Rating – Neutral
Brokerage Firm – Motilal Oswal
After a decline in income for the last two years (FY 2019-20 and 2020-21), Biocon (BIOS) is now in a position from where its income can increase. The company is also going to start the Insulin Glargine (Semglee) contract in the fourth quarter of the current financial year after the steady growth in Biosimilar. This initiative of the company will also be helped by its product b-Aspart. However, it will require regulatory clearance. The company has recently tied up with Serum Institute of India (SII) for the marketing of its COVID-19 vaccine.
Motilal Oswal believes that the company will benefit from Insulin Glargine. With this, the company’s growth can increase by 36 percent in the financial year 2021-23. This will give it an opportunity to expand its biological business and research services in the emerging market. Keeping its neutral rating, the brokerage firm has kept its target price at Rs 360.
(The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)
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