Stocks To Buy: Top Brokerage Suggests 2 Stocks To Invest On Strong Margin & Sharp Revenue

Indian equity markets traded flat today, as Sensex closed at 61,980.72 points and Nifty closed at 18,409.65 points. However, Emkay Global recommended these 2 stocks to buy for high short-term returns. The current market price of Suprajit Engineering is Rs. 331.80/ share. Emkay Global mentioned, We maintain a constructive view, driven by cyclical recovery in the underlying industry; market-share gains vs. the industry, thanks to decentralized plant locations and competitive pricing owing to scale advantages; and growth in content per vehicle (CPV), led by new products (~Rs50,000/unit opportunity). Key risks are slower acceptance of new products and adverse movement in currency/commodity prices. the firm reaffirmed the buy rating on the stock with a target price of Rs. 450, based on 20x Dec-24E EPS (Sep-24E earlier).Advertisement The companys revenue grew by 45% YoY (3-yr CAGR at 22%) to Rs. 7.2bn, driven by 10% growth in auto cables, 25% growth in non-auto cables, and addition of LDC revenue (Rs. 1.7bn). In comparison, lamps revenue declined by 2%. EBITDA declined by 2% (3-yr CAGR at 12%) to Rs. 787mn. Sequentially, EBITDA margin expanded by 260bps to 11%, owing to 40bps expansion in auto cables, 360bps improvement in non-auto cables, 200bps increase in lamps, and 360bps rise in LDC. Other income grew by 117% to Rs. 217mn. Overall, adjusted PAT declined by 15% (3-yr CAGR at +1%) to Rs. 457mn. The current market price of Apollo Tyres is Rs. 276.30/ share, fell by around 7 in trade on November 16. The brokerage firm said, Driven by better scale and improved net pricing, we expect EBITDA margin to expand, from 12.3% in FY22 to 12.7% in FY23E and to 14.7% in FY25E. Key downside risks: Lower-than-expected demand in key geographies, higher competitive intensity and adverse movement in currency/commodity prices. Emkay Global maintained the buy rating, with a revised target price of Rs. 345/share, applying 13x Dec-24E EPS. In Q2FY23, its revenue increased by 17% YoY (3-yr CAGR at 14%) to Rs. 59.6bn. EBITDA increased by 12% YoY (3-yr CAGR at 18%) to Rs. 7.1bn. EBITDA margin contracted by 60bps to 12%. APMEA EBIT margin contracted by 80bps to 4.8%, while Europe EBIT margin expanded by 40bps to 5.7%. Overall, adj. PAT grew by 9% YoY (3-yr CAGR at 33%) to Rs. 1.95bn, broadly in line with the brokerage firms estimate. Following the revision, Emkay Global expects FY23E revenue growth to be robust at 18%; this uptrend is likely to endure, with FY23-25E revenue CAGR at 9%. The above stocks were picked from the brokerage report by Emkay Global Direct. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.