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Business News/ Photos / Cyient, SBI and more: Axis Securities lists 9 stock picks for 2024 with up to 33% potential upside

Cyient, SBI and more: Axis Securities lists 9 stock picks for 2024 with up to 33% potential upside

9 Photos . Updated: 28 Dec 2023, 01:56 PM IST Pranati Deva

As 2023 comes to an end, brokerage house Axis Securities has come out with its top stock picks for 2024. It said that with current valuations offering a limited scope of further expansion, bottom-up stock picking would be a key to generating satisfactory returns in the next one year. 

Pitti Engineering: The brokerage is bullish on the stock and has a target price of <span class='webrupee'>₹</span>915, implying a 33% upside. Axis believes its recommendation is supported by Pitti's robust capex and capacity addition directly resulting in strong improvement in the company’s order book.

1/9Pitti Engineering: The brokerage is bullish on the stock and has a target price of ₹915, implying a 33% upside. Axis believes its recommendation is supported by Pitti's robust capex and capacity addition directly resulting in strong improvement in the company’s order book.

Cyient: The brokerage is positive on this mid-cap IT stock with a target price of <span class='webrupee'>₹</span>3,000, which implies a 28% upside. Axis likes the stock on the back of accelerated demand for ER&D services, new growth areas witnessing strong traction, and the firm capitalising on growing investments in the Transportation vertical. It also added that robust order intake for core services during the quarter stood at $183.9 million, which is also positive for the firm.

2/9Cyient: The brokerage is positive on this mid-cap IT stock with a target price of ₹3,000, which implies a 28% upside. Axis likes the stock on the back of accelerated demand for ER&D services, new growth areas witnessing strong traction, and the firm capitalising on growing investments in the Transportation vertical. It also added that robust order intake for core services during the quarter stood at $183.9 million, which is also positive for the firm.

Archean Chemical Industries: The brokerage is bullish on the stock with a target price of <span class='webrupee'>₹</span>810, indicating an upside of 25%. Axis believes ACIL is well placed in the bromination space given its strong industry growth drivers, rise in its share of expert, its forward integration into niche high-value business with strong demand from the largest geographies in the world, and its well-nurtured long-term relationship with customers. (Bloomberg )

3/9Archean Chemical Industries: The brokerage is bullish on the stock with a target price of ₹810, indicating an upside of 25%. Axis believes ACIL is well placed in the bromination space given its strong industry growth drivers, rise in its share of expert, its forward integration into niche high-value business with strong demand from the largest geographies in the world, and its well-nurtured long-term relationship with customers. (Bloomberg )

Amber Enterprises: The brokerage is positive on the stock with a target price of <span class='webrupee'>₹</span>3,700, implying a 22% upside. Axis' recommendation is supported by robust order book in the firm's railway sub-systems & mobility division, increasing value-added products, improving operating leverage resulting in improving ROE and ROCE (to 15% and 16% respectively) and operating margins (by 130bps to 7.3%) by FY26. Axis has increased the firm's revenue and operating margin estimates backed by strong revenue visibility in its robust order book. Moreover, the company’s value-added products and operating leverage in its R&M division will result in an improvement in profitability on a YoY basis, added the brokerage.

4/9Amber Enterprises: The brokerage is positive on the stock with a target price of ₹3,700, implying a 22% upside. Axis' recommendation is supported by robust order book in the firm's railway sub-systems & mobility division, increasing value-added products, improving operating leverage resulting in improving ROE and ROCE (to 15% and 16% respectively) and operating margins (by 130bps to 7.3%) by FY26. Axis has increased the firm's revenue and operating margin estimates backed by strong revenue visibility in its robust order book. Moreover, the company’s value-added products and operating leverage in its R&M division will result in an improvement in profitability on a YoY basis, added the brokerage.

Westlife Foodworld: The brokerage is positive on the stock with a target price of <span class='webrupee'>₹</span>1,000, implying an upside of 22%. Axis' confidence in the company’s bright future prospects is supported by its strong execution track record of Revenue/EBITDA growth of 17%/51% over FY16-20, which was driven by new product launches and cost rationalisation programs (100-200bps cost reduction every year). Moreover, multi-year growth wind in the QSR space and attractive valuations also keep the investor sentiment positive. It expects the company to deliver healthy Revenue/EBITDA growth of 28%/43% CAGR over FY22-25E led by the growth's strong tailwinds. (Hemant Mishra/Mint<br />)

5/9Westlife Foodworld: The brokerage is positive on the stock with a target price of ₹1,000, implying an upside of 22%. Axis' confidence in the company’s bright future prospects is supported by its strong execution track record of Revenue/EBITDA growth of 17%/51% over FY16-20, which was driven by new product launches and cost rationalisation programs (100-200bps cost reduction every year). Moreover, multi-year growth wind in the QSR space and attractive valuations also keep the investor sentiment positive. It expects the company to deliver healthy Revenue/EBITDA growth of 28%/43% CAGR over FY22-25E led by the growth's strong tailwinds. (Hemant Mishra/Mint
)

State Bank of India: The brokerage is bullish on India's largest lender with a target price of <span class='webrupee'>₹</span>800, indicating an upside of 25%. Among PSU banks, SBI remains the best play on the gradual recovery of the Indian economy on account of its healthy PCR, robust capitalisation, strong liability franchise, and improved asset quality outlook. Axis believes SBI remains well-poised to deliver RoA/RoE of 1%/16% over FY24-26E, supported by stable credit costs and steady cost ratios. (REUTERS)

6/9State Bank of India: The brokerage is bullish on India's largest lender with a target price of ₹800, indicating an upside of 25%. Among PSU banks, SBI remains the best play on the gradual recovery of the Indian economy on account of its healthy PCR, robust capitalisation, strong liability franchise, and improved asset quality outlook. Axis believes SBI remains well-poised to deliver RoA/RoE of 1%/16% over FY24-26E, supported by stable credit costs and steady cost ratios. (REUTERS)

Sansera Engineering: The brokerage is bullish on the stock with a target price of <span class='webrupee'>₹</span>1,210, indicating an upside of 22%. Axis likes the stock on the back of its robust order book, healthy product diversification, entry barrier for new players in the Aerospace business as well as positive company-specific triggers. These factors give Axis confidence that the company's consolidated EBITDA margins will accelerate towards a targeted 18-19% by FY26E from ~16% in FY23 and its ROE will improve to 18.5% by FY26E from 13.3% in FY23.

7/9Sansera Engineering: The brokerage is bullish on the stock with a target price of ₹1,210, indicating an upside of 22%. Axis likes the stock on the back of its robust order book, healthy product diversification, entry barrier for new players in the Aerospace business as well as positive company-specific triggers. These factors give Axis confidence that the company's consolidated EBITDA margins will accelerate towards a targeted 18-19% by FY26E from ~16% in FY23 and its ROE will improve to 18.5% by FY26E from 13.3% in FY23.

Manappuram Finance: The brokerage is bullish on the stock with a target price of <span class='webrupee'>₹</span>205, implying a 19% upside. Axis believes its attractive valuations, improving gold loan growth, healthy RoA/RoE profile, and improving AUM growth are some key positives for the stock. Manappuram continues to make efforts to diversify the portfolio in order to reduce the cyclicity of the gold loan business and reduce the share of gold loans to 50%. Axis believes current valuations are attractive for a RoA/RoE delivery of 4.9%/20% over the medium term. (Non-banking finance company (NBFC) Manappuram Finance lends against gold. <br />)

8/9Manappuram Finance: The brokerage is bullish on the stock with a target price of ₹205, implying a 19% upside. Axis believes its attractive valuations, improving gold loan growth, healthy RoA/RoE profile, and improving AUM growth are some key positives for the stock. Manappuram continues to make efforts to diversify the portfolio in order to reduce the cyclicity of the gold loan business and reduce the share of gold loans to 50%. Axis believes current valuations are attractive for a RoA/RoE delivery of 4.9%/20% over the medium term. (Non-banking finance company (NBFC) Manappuram Finance lends against gold.
)

JK Lakshmi Cement: The brokerage is bullish on the stock with a target price of <span class='webrupee'>₹</span>1,000, implying a potential upside of 14%. Attractive valuations, macroeconomic tailwinds, encouraging growth opportunities, and strong company-specific triggers keep Axis positive on the stock. The company’s topline and margins are expected to enhance on account of its superior positioning in the key markets of North, West, and East India, along with higher cement demand and several strategic initiatives undertaken by the company in recent times. Axis expects its Revenue/EBITDA/APAT to grow at a CAGR of 10%/24%/26% respectively over FY23-26E.

9/9JK Lakshmi Cement: The brokerage is bullish on the stock with a target price of ₹1,000, implying a potential upside of 14%. Attractive valuations, macroeconomic tailwinds, encouraging growth opportunities, and strong company-specific triggers keep Axis positive on the stock. The company’s topline and margins are expected to enhance on account of its superior positioning in the key markets of North, West, and East India, along with higher cement demand and several strategic initiatives undertaken by the company in recent times. Axis expects its Revenue/EBITDA/APAT to grow at a CAGR of 10%/24%/26% respectively over FY23-26E.

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