Domestic inventory markets proceed to stay risky, confronted with a number of headwinds together with rising inflation and rate of interest hikes. On Friday, BSE Sensex was down 744 factors or 1.35%, hovering round 54,575 whereas the NSE Nifty 50 index tanked greater than 200 factors or 1.3% to surrender 16,200. Analysts have been recommending stock-specific motion to protect portfolios from uncertainty. “Aggressive rate hikes by global central banks on the back of continued inflationary pressures are the near-term risk while earlier than expected peaking of Inflation would drive the market,” Angel One stated in a observe. The brokerage agency has pinned 4 auto shares that they consider might rally, giving buyers as a lot as 60% returns.
Ashok Leyland: BUY
Target worth: Rs 164 per share
Upside: 20%
Shares of Ashok Leyland have gained 7% to this point this yr, outperforming benchmark Nifty 50 and Sensex together with the Nifty Auto index. Medium and heavy business automobiles (MHCV) business manufacturing volumes have been on the lowest ranges seen in near 12 years and analysts consider that the corporate is ideally positioned to seize the expansion revival within the CV phase. “We believe that Ashok Leyland will be the biggest beneficiary of the Government’s voluntary scrappage policy and hence rate the stock a BUY,” they added.
The inventory at present trades at Rs 137 per share, implying an upside of 20% for the inventory.
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Sona BLW Precision Forgings: BUY
Target worth: Rs 843
Upside: 40%
Sona BLW is one among India’s main automotive expertise firms, deriving near 40% of its revenues from Battery Electric Vehicles (BEV) and Hybrid Vehicles. So far this yr the inventory has not carried out nicely, falling 19%. However, analysts consider the tide will flip. “Given the traction in the BEV/Hybrid Vehicle space, we believe that Sona Comstar will continue to command a higher multiple, which is justified by ~49% earnings CAGR over FY21-24E,” Angel One stated. Sona BLW has a robust market share starting from 55-90% for differential gears for PV, CV, and tractor OEMs in India.
The set goal worth suggests a 40% upside from present ranges.
Ramakrishna Forgings: BUY
Target worth: Rs 162
Upside: 58%
The inventory has fallen 14% in 2022, underperforming the benchmark indices. Ramkrishna Forgings is a number one forging participant in India and amongst a choose few having the heavy press, stands to profit from a beneficial demand outlook for the Medium and Heavy Commercial Vehicle business in home and different key geographies within the close to time period, analysts stated. “The company has phased out its CAPEX over the past few years during which it was impacted by industry slowdown in certain periods. With the end to the CAPEX cycle, the favourable outlook in the medium term, and sufficient capacity in place, we believe Ramakrishna Forgings’ volumes would be able to post volume CAGR of 29% over FY21-23E,” they added.
The inventory trades at Rs 162 per share at present, which interprets to an upside potential of 58%.
Suprajit Engineering: BUY
Target worth: Rs 485
Upside: 60%
Suprajit Engineering is a big provider of automotive cables to the home OEMs with a presence throughout each 2Ws and PVs. The firm has diversified publicity, which coupled with its proposition of low-cost participant has enabled it to realize market share and extra enterprise from current clients. The inventory has tanked a large 33% to this point in 2022. “Suprajit Engineering has grown profitably over the years and as a result, it boasts a strong balance sheet (net cash). We believe it is a prime beneficiary of a ramp-up in production by OEMs across the globe and is well insulated from the threat of EV (is developing new products). Its premium valuations are justified in our opinion owing to its strong outlook and top-grade quality of earnings,” analysts stated.
To attain the goal worth, shares of Suprajit should zoom 60% from present ranges of Rs 303 per share.
Source: www.financialexpress.com”