10 stocks where analysts initiated coverage with a 'buy'
In January, so far, Sensex has risen around half a percent. But broader markets are still lagging front liners with the BSE Midcap index falling 1.6 percent and Smallcap index down a third of a percent. In comparison, Sensex gained 6 percent in 2018. BSE Midcap index fell 13.5 percent and Smallcap index was down 24 percent in 2018. Even after the recent recovery, the market is still down 7 percent from its peak hit in August 2018 and broader markets are far away from their historic highs but that gives analyst an opportunity to pick good quality stocks at right time. VIP Industries is India's leading luggage brand (around 55 percent organized share) player (value terms) in backpacks and making inroads into ladies handbags.
Distribution architecture, product quality and brand segmentation across price points drove 25 percent EBITDA CAGR over FY14-18. An experienced team investing in brand and now own capacities (Bangladesh) should drive 24 percent revenue CAGR over FY18-23.source- www.moneycontrol.com
Despite currency volatility and rising procurement costs, 29 percent EPS CAGR over FY18-23 should be led by, 24 percent revenue CAGR from the rising contribution of backpacks/handbags and, EBITDA margin improving to 16.9 percent (versus 13.7 percent) led by captive production, premiumization and operating leverage. We initiate coverage with buy call and target price of Rs 653 is built on high-teen revenue growth over the next decade as penetration and brand salience rise. Risks are management attrition and market share loss in the economy segment.
We believe that SURL valuations can get rerated on back of potential demerger of company’s consumer electrical and steel pipes business. strong growth in company’s estimated consolidated profits through FY18-20E driven by a) meaningful growth in fans & consumer appliance segments supported by improved penetration on the current lower base b) stability in LED prices, recovery in the pipes business driven by improved public spending in infrastructure.
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