Mahindra CIE, other 4 smallcap stocks to buy in June: Axis Securities
India’s benchmark indices Sensex and Nifty 50 started the June month on a volatile note. For June month, Axis Securities has selected a list of stocks that could be best picks. In the smallcap basket, the brokerage likes Mahindra CIE Automotive, Praj Industries, CreditAccess Grameen, and others. Last month, the resilience of the Indian market continued with the Nifty 50 outperforming majority of global indices.
Axis Securities May 2023 top picks have outperformed both Sensex and Nifty which gained by 2.07 per cent and 2.13 per cent respectively. In May, Axis Securities’ top picks basket inched up further by 4.2%. And the brokerage is back with another set of top picks for investors to buy in June.
“Axis Top Picks basket delivered impressive returns of 25% in the last one year, outperforming the benchmark Index NIFTY 50 (12% returns in one year) by a notable margin. In May’23, the basket inched up further by 4.2%. Furthermore, it gives us immense joy to share that our Top Picks basket has delivered an impressive return of 168% since its inception (May’20), which stands significantly higher than the 100% return delivered by NIFTY 50 over the same period,” said Axis Bank in its research notes.
The brokerage firm also believes that the Indian economy stands at a sweet spot of growth and remains the land of stability against the backdrop of a volatile global economy. It believes that the current setup is a ‘Buy on Dips’ market.
Here are the top 5 mid-cap stocks of Axis Securities to buy in June month.
Mahindra CIE (Target price: 535)
The brokerage firm has set a target price of ₹475 on Mahindra CIE Automotive, an upside of 19% from the- current market price (CMP.)
The brokerage recommendation rationale is based on (a) Outperformance in European operations (b) Healthy order book and steady growth in Indian operations (c) Strong FCF generations and negligible debt on the balance sheet.
Keeping these factors in view, we forecast Revenue/EBITDA/PAT CAGR of 14%/22%/24% over CY22-25E.
Praj Industries (Target price: ₹500)
Axis Securities maintained a Buy rating of Praj Industries with a target price of ₹500, i.e., upside potential of 30% from CMP of ₹384.
“Domestic business augurs well as Ethanol Blending continues with strong traction in FY23 and mostly like preponing its target, the overall demand-supply gap of Ethanol, increased interest in grain-based distilleries and decarbonization impetus is auguring well for Praj along with development in other key verticals such as CPS, ZLD & High Purity gaining traction. Praj is a key beneficiary of multiple tailwinds provided by the bio-economic revolution, giving strong growth & revenue visibility for the next 3-5 years,” it said.
CCL Products (Target price: ₹750)
Axis Securities has given a target price of ₹750 on CCL Products, which is upside potential of 18% from the current market price of ₹636.
“We remain positive on CCL Products given: 1) Strong footing in the International markets as it continues to gain market share and access new business, 2) Cost-efficient business model; 3) Doubling the capacity from 38,500 MT in FY22 to ~77,000 MT by FY25 across Vietnam and India; 4) Capacity addition in the value-added products (FDC and small packs) in Vietnam, and 5) Foray into high-margin branded retail business (Continental Coffee, Plant-based meat protein),” the brokerage firm said.
CreditAccess Grameen (Target price: ₹1,400)
Axis Securities recommended a buy rating CreditAccess Grameen with a target price of ₹1,400, which implies an upside potential of 14% from the current market price of ₹1,225.
“The retail finance portfolio is expected to be non-margin dilutive despite being largely skewed towards the secured products, thereby enabling CAGrameen to maintain its NIMs at 12-12.2% over the medium term. Even as competitive intensity in the MFI segment continues to intensify with banks and NBFCs chasing growth aggressively, we believe CAGrameen remains well-placed to tap the large unmet demand which would be supported by its large branch network, deep rural penetration, customized product product offerings, and competitive pricing,” it said.
PNC Infratech (Target price: ₹425)
The brokerage firm recommended a buy rating on PNC Infratech with a target price of ₹425, implying an upside potential of 34% from the current market price of ₹316.
“The Road sector is witnessing good development owing to increased government thrust on infrastructure investment. Furthermore, the tightening of norms in bidding on road projects by the NHAI augurs well for an organised player such as PNCIL,” Axis Securities said.
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Updated: 04 Jun 2023, 07:26 PM IST
