HCL Tech, Bharat Electronics among five stocks to watch out in the next 12 months

 BT Online   New Delhi     Last Updated: August 10, 2016  | 12:27 IST
HCL Tech, Bharat Electronics among five stocks to watch out for the next 12 months
Photo: Reuters

A day after Reserve Bank of India (RBI) maintained status quo on interest rates in its third bi-monthly monetary policy review, the S&P BSE Sensex fell over 200 points to dip below its crucial 28,000 level, while broader Nifty also slipped below its key 8,600 mark.

As market trudges along its last leg of earning season, we have compiled five stocks that may offer returns up to 47 per cent in the coming 12 months:

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HCL Tech

HCL Technologies surpassed Street estimates to report 14.8 per cent year-on-year (YoY) growth and 6.3 per cent quarter-on-quarter (QoQ) growth in June quarter net profit at Rs 2,047 crore.

Brokerage Angel Broking expects HCL Tech to post a dollar and rupee revenue CAGR of 16 per cent and 18 per cent, respectively, over FY2016-18E. On back of strong order book and given the attractive valuations, the brokerage recommended a 'buy' on the stock with a target price of Rs 1000, an upside of over 22 per cent against Tuesday's closing.

CARE Ratings

Credit Analysis and Research (CARE) Ratings posted a net profit of Rs 24.67 crore for first quarter ended June 30, up 41 per cent from year ago.

Brokerage Centrum Broking retained 'buy' on CARE Ratings (CARE), with a revised target price of Rs 1,340 (23x Mar'18E EPS), an upside of 17.54 per cent against Tuesday's closing.  

"June quarter results surprised on upside on both volume and profitability fronts. This is even as pricing pressure prevails and reaffirms our belief in market share gain for the company," said Centrum Broking.


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Techno Electric

Techno Electric & Engineering Company is a leading provider of high quality engineering, procurement and construction services to India's core sector industries. The company reported a consolidated total income from operations of Rs 270.93 crore and a net profit of Rs 48.00 crore in the June quarter.

Brokerage Centrum Broking believes the outlook appears robust for the company, with nearly Rs 30 billion order book having over Rs 10 billion of order bid pipeline and margin guidance slightly ahead of estimates.

The brokerage retained 'buy' rating on the stock with a revised target price of Rs 890, an upside of 31.50 per cent against its Tuesday's closing.

Bharat Electronics

The company has reported a fall of 52.94 per cent in its net profit at Rs 36.09 crore in the June quarter as compared to Rs 76.69 crore for the same quarter in the previous year.

However, brokerage Prabhudas Liladhar believes the company will offer good investment opportunities to investors who want to invest in the Indian Defence sector with a long-term view. The brokerage expects stock to deliver earnings CAGR of 11 per cent over FY15-18E and maintained 'accumulate' rating on the stock with a target price of Rs 1,454, an upside of over 17 per cent against its Tuesday's closing.

Gateway Distriparks

Gateway Distriparks reported 84.9 per cent year-on-year fall in the net profit to Rs 9.7 crore in the June quarter. Brokerage Motilal Oswal said the company is a direct play on India's EXIM growth and beneficiary of increasing containerization which will be boosted by DFCs completion.

Management's focus on reinvesting in the core business along with upgrading to value-added services has ensured continual margin improvement, it added.

Motilal Oswal maintained 'buy' on the stock with a target price of Rs 393, an upside of 47 per cent against its Tuesday's closing.

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