Buy 2 Mid Cap Stocks That Can Deliver Higher Return, ICICI Direct Lists Preferred Picks

1. Buy Sonata Software Ltd

Current market price of Sonata Software Ltd is Rs 715.05 apiece with intraday gain of 1.24%. ICICI Direct has suggested investors to buy Sonata Software Ltd with a target price of Rs 835 apiece. If you buy Sonata Software now, you can obtain 17%
potential return.

The company has a market capitalisation of Rs 10,025.89 crore. The stock's 52-week high is Rs 753.00 apiece and 52-week low is Rs 457.50 apiece, respectively.

The IT Software sector stock delivered 18% return in last 1-month, 29% return in last 3-months, 36% return in last 6-months, and 29% return in last 1-year. In last 2-years, the stock gave 99% return.
According to ICICI Direct, "Sonata's share price has grown by ~3x over the past five years (from ~Rs 238 in February 2018 to ~Rs 706 levels in February 2023). We maintain our BUY rating on the stock. We value Sonata at Rs 835 i.e., 18x P/E on FY25E EPS."

Sonata Software (Sonata) offers IT services (30%) and product licensing & deployment (70%).

2. Buy Apollo Tyres Ltd

The current market price of the mid cap Tyres sector stock is Rs 314.20 apiece with intraday fall of 1.47%. ICICI Direct has suggested investors to buy Apollo Tyres Ltd with target price of Rs 390 apiece and potential return of 24%.

The stock's 52-week high is Rs 343.00 apiece and 52-week low is Rs 165.40 apiece, respectively.

The company has a market capitalisation of Rs 19,945.35 crore. The stock gave 7% return in last 3-months, 28% in last 6-months, and 70% in last 1-year. The stock rallied 35% in last 2-years.

According to ICICI Direct, "We retain our BUY on ATL amid consistent focus on profitability amid surging OEM demand especially in the M&HCV domain, sweating of assets, calibrated capex spends and targeted revenue of ~US$5 billion by FY26E."

Introducing FY25E and rolling over our valuations, we now value ATL at a revised target price of Rs 390 i.e. 6x FY25E EV/EBITDA.

Disclaimer

The stocks have been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.