Four stocks from BSE500 index have delivered double digit returns consecutively for the last five calendars. They included Abbott India, Tube Investments, Varun Beverages and Esab India. Three of these stocks, however, have average price targets that suggest potential downside ahead.
Among these stocks, Varun Beverages delivered multibagger returns in 2022. The scrip jumped 123.76 per cent in 2022, in addition to a 45.26 per cent return in 2021, a 29.31 per cent return in 2020, 34.91 per cent return in 2019 and 20.85 per cent return in 2018. An average target of Rs 1,159.25 on the counter, as per data publicly available with Trendlyne, suggests a 12.35 per cent potential downside ahead.
Last month, Keynote Capitals initiated coverage on Varun Beverages. It noted that compared to FMCG companies, Varun Beverages is a capital-intensive business that leads to lower return ratios. It values Varun Beverages at a 10 per cent discount to an average FMCG company. Motilal Oswal expects this company to log a 23 per cent growth in revenue, 28 per cent growth in Ebitda and 45 per cent growth compounded annually over calendars 2021-24.
Tube Investments of India delivered a 58.22 per cent return in 2022. This stock gained 118 per cent in 2021, 66.73 per cent in 2020, 35.01 per cent in 2019 and 32.84 per cent in 2018. An average target price on this stock at Rs 2,074 suggests a potential 25 per cent downside ahead for the stock.
On a consolidated basis, Motilal Oswal expects this company to log a revenue growth of 17 per cent, Ebitda growth of 23 per cent and PAT growth of 25 per cent compounded annually over FY22-25, on a high base of FY22. It expects the company's consolidated RoCE to improve by 7.7 percentage points to 40.1 per cent by FY25.
Abbott India's average target price at Rs 15,767.50 suggests a 26.21 per cent potential downside. This stock delivered a 10 per cent return in 2022 against a Sensex rise of 4 per cent for the calendar.
The scrip climbed 23.55 per cent in 2021 and a similar 20.56 per cent in 2020. In 2019, it soared 73.86 per cent and 36.49 per cent in 2018. Sharekhan, which has a buy rating on the stock, expects revenues and earnings for the company to grow at 12 per cent and 16 per cent CAGR over FY22-FY25E, led by healthy growth prospects, a debt-free balance sheet and strong brand equity built over the years.
No targets are available for MNC Esab India. This stock has risen 22.69 per cent in 2022, 77 per cent in 2021, 47 per cent in 2020, 41 per cent in 2019 and 14.3 per cent in 2018.
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