Jagannadham believes buying will sustain in quality mid-caps and small-caps.

Ahead of Lok Sabha elections, the investors are shifting focus to political developments. The market is hoping that Modi will come back to power and the recent rally has been on the back of foreign investors pumping in money.

In March itself, the Nifty50 is the best performer globally and overall Indian equities attracted more Rs 27,000 crore of FII inflow since February, which is highest in last many months.

Many stocks are so attractively valued (after falling 20-50-60 percent from all-time or 52-week highs) that brokerages started looking at them closely and revised their ratings, price targets and some even initiated coverage on select stocks.

Here are top 10 stocks where brokerages initiated coverage in March with a buy call:

Brokerage: ICICI Securities

M&M Financial Services: Buy | Target: 500 | Return: 14%

Buoyancy in rural India and MMFS’ focus on rural financing are expected to support valuations.

MMFS has ingredients to sustainably command premium valuation – 1) rural reach providing huge opportunity with pricing power, 2) robust AUM growth (AUM, earnings CAGR of 20 percent, 25 percent, respectively, in FY18-21E), 3) higher rural income led by farm loan waivers and cash flow receipt during election, 4) strong management and 5) adequate risk management with limited losses.

Brokerage: Yes Securities

Capacite Infraprojects: Buy | Target: Rs 330 | Return: 39%

Revenue visibility of more than 25 percent CAGR over FY18-21 is backed by strong order book; preferred contractor for Super/high-rise buildings. Niche in construction of complex structures aids better margins which are likely to sustain at more than 14 percent at operating level.

Brokerage: Reliance Securities

Hindustan Unilever: Buy | Target: Rs 2,000 | Return: 15%

We are initiating coverage on Hindustan Unilever (HUL) with a buy recommendation and a target price of Rs 2,000. Looking ahead, we expect HUL to witness the fastest earnings growth among the major FMCG companies, notwithstanding the size and scale of operations.

Brokerage: Edelweiss Securities

GMDC: Buy | Target: Rs 105 | Return: 15%

We initiated coverage with a buy call on the stock and price target of Rs 105 apiece.

The conviction is underpinned by two Vs i.e. volume & valuation. We sees imminent volume uptick post production ramp-up at new mines, despite stagnant prices.

rokerage: Arihant Capital Markets

Oberoi Realty: Buy | Target: Rs 634 | Return: 31%

Oberoi Realty (ORL) is a Mumbai focussed premium real estate developer, primarily catering to the ultra-luxury and luxury segment.

With city-centric operations well spread out across the Mumbai region, ORL has a project portfolio of around 34 million square feet (msf) spread across 24 projects. With a strong brand name and a dominant position in each of its micro market, ORL has a strong visibility of future cash flows.

Brokerage: JM Financial

Ashoka Buildcon: Buy | Target: Rs 170 | Return: 19%

With a life time high orderbook, we believe ABL is at an inflection point, which can trigger at least 20 percent plus revenue CAGR in FY19-21E (versus guidance of 40 percent).

Despite assuming slow execution (20 percent sales growth) and 11 percent fall in NHAI ordering (versus FY18) in FY20-21, we find ABL delivering 12 percent CAGR in earnings (FY18-21) while stock trades at P/E of 6x FY21 (core EPC business).

Brokerage: Elara Capital

Container Corporation: Buy | Target: Rs 590 | Return: 18%

We initiate on CONCOR with a buy rating and a target price of Rs 590 based on 23x FY21E P/E (at par with past five-year average one-year forward P/E).

It posted a revenue CAGR of 3 percent over FY15-18, with muted return ratios, due to an increase in rail haulage charges by Railways Ministry in FY15. Although risk remains, diversification to multi-modal logistics player would help add new revenue streams.

Future Supply Chain Solutions: Buy | Target: Rs 743 | Return: 17%

We initiate on Future Supply Chain Solutions with a buy rating and a target price of Rs 743. Our TP is based on 23x FY21E P/E and currently we have not factored in any value from the Vulcan subsidiary.

We expect a revenue CAGR of 37 percent over FY18-21E and an earnings CAGR of 24 percent. Superior EBITDA margin led by a sturdy business mix act as key differentiator.

VRL Logistics: Buy | Target: Rs 314 | Return: 15%

We initiate on VRL Logistics with a Buy rating and a TP of INR 314 based on 23x FY21E P/E. Our TP implies 22% potential upside. We expect a revenue CAGR of 11 percent over FY18-21, with increasing EBITDA margin.

Mold-Tek Packaging: Buy | Target: Rs 312 | Return: 12%

Mold-Tek Packaging (MTEP), one of the leading manufacturers and suppliers of high quality airtight and pilfer proof containers/pails in India for Paints, Lubricants, Food and FMCG.

MTEP’s revenue grew by 12 percent CAGR whereas PAT grew by whopping 41 percent CAGR over FY13-FY18. EBITDA margin expanded by 830bps to 18.7 percent over FY13-18. Strong profitability growth was led by margin expansion on account of increasing share of in-mold volumes.

source: moneycontrol.com