Buy LG Electronics, Astral, Greenply, says Axis Securities; one stock target hints at 72% upside

Axis Securities has identified a few consumer durable players, such as LG Electronics India Ltd, Astral Ltd and Greenply Industries Ltd. In their latest sector update, the brokerage maintained a bullish stance on these three stocks and others, forecasting nearly up to 72% gains. 

Axis noted that the ongoing geopolitical tensions are sending severe ripples across the consumer durables and building materials sectors. 

“The ongoing war-driven environment—characterised by rising crude oil prices, supply chain disruptions, and sharp increases in freight (especially air freight)—is creating a broad-based cost inflation shock across building materials and consumer-facing sectors,” the brokerage said.

However, Axis noted that certain market leaders possess the underlying strength to weather this storm. Greenply Industries emerges as the stock with the most upside potential. Currently trading at Rs 192.15, Axis has a 'Buy' rating on the counter with a target price of Rs 330, nearly 72% upside from current levels. 

“Margin compression is a direct risk, as a 10% increase in crude-linked energy and resin costs could cause a 30-60 bps drop in EBITDA margins. Strong brands like Greenply and Century can have a better hold on passing the costs ahead,” the brokerage said.

Axis is positive about LG Electronics. With the stock currently hovering around Rs 1,495, the brokerage has a 'Buy' call alongside a target price of Rs 1,815, implying upside of over 21%.

Unlike consumer durables, the plastic pipes industry typically benefits from relatively better pricing flexibility, allowing companies to transfer raw material cost bumps to buyers with a short lag, particularly in B2B and institutional segments, it said

Axis Securities remains positive on Astral. From its current market price of Rs 1587.70, the brokerage believes the stock may climb to a target price of Rs 1,750, an upside of over 10% for investors from current levels.