DMart, BEML, Sula, DOMS among 10 stocks that saw brokerage initiations with up to 107% potential upside

Select stocks including BEML, Avenue Supermarts (DMArt), Sula Vineyards, Pricol, Motilal Oswal Financial Services, Shriram Pistons & Rings, Shriram Properties, Electrosteel Castings, Happy Forgings and DOMS Industries have seen fresh interest from the various brokerage firms, who have recently initiated their coverage on these companies.

The host of brokerages including Prabhudas Lilladher, CLSA, Monarch Networth Capital, Emkay Global, Sunidhi Research, Anand Rathi Research and JM Financial have launched their maiden reports on these stocks. All of these stocks have 'buy' ratings on them with an upside potential of up to 107 per cent. Here's why these analysts are positive on them:

JM Financial on DOMS Industries
Rating: Buy | Target Price: Rs 1,710 | Upside Potential: 15%
DOMS is an impressive story that highlights how innovations evolve industries and how a company that aims to remain product and consumer-centric can emerge as a winner. It widened the portfolio and established capabilities with a strategy to start their own brand and build a business for the long term.

"The backbone of DOMS’ strategy lies in extensively focusing on innovation and leveraging end-to-end manufacturing capabilities to get the product & pricing right. Its proven track record provides assurance on execution machinery; further, share gains in core categories and faster scale-up in Pens/Art material will drive overall earnings," it said, initiating with a 'buy' and a target price of Rs 1,710.

Emkay Global on Shriram Pistons & Rings
Rating: Buy | Target Price: Rs 2,455 | Upside Potential: 40%
Emkay believes that Shriram Piston is further strengthening of its dominant positioning in core products and content per vehicle in upcoming ‘greener’ and competitive ICE engine variants; its emergence; extended growth visibility for ICE amid emerging challenges to EV penetration; its diversification into specific and powertrain-agnostic components, said Emkay Global.

"We build-in 13 per cent FY24E-26E sales CAGR on above-industry-growth on higher content; high aftermarket focus; ramp up of recent acquisitions; our EPS CAGR is 17 per cent. We value SPRL at 18 times FY26E PER, 20 per cent premium to peers for superior franchise and growth outlook. We initiate coverage on Shriram Pistons with 'buy' and 70 per cent upside," it said.

Monarch Networth Capital on Sula Vineyards
Rating: Buy | Target Price: Rs 740 | Upside Potential: 38%
As a household name in the wine industry, Sula commands a sizable market share, establishing a significant competitive advantage through its brand recognition. Leveraging unique initiatives such as Sula Fest and wine tour experience, the company has played a pivotal role in cultivating and building the wine culture in India, said Monarch Networth Capital.

"With substantive entry barriers, like in sourcing raw materials and challenges of shifting government regulations, Sula is well-positioned to maintain its leadership. With the wine industry all set for significant growth, driven by demographic shifts, Sula's new initiatives and ongoing premiumization trends can catapult it to the next level," it said with a buy and target price of Rs 740.

CLSA on Avenue Supermarts (DMArt)
Rating: Buy | Target Price: Rs 5,107 | Upside Potential: 23%
We initiate coverage of Avenue Supermarts (DMart) at 'buy'. DMart is a discount retailer with the lowest operating costs, which have driven the lowest consumer prices, in turn leading to high sales velocity and better scale, further reducing costs - a virtuous loop that allows DMart to gain market share in a price-sensitive market, said CLSA in IC report.

DMart is one of the lowest-cost retailers globally, operating on an everyday low cost, everyday low price model. Historically, DMart has underplayed the private-label opportunity so as not to be seen competing with large suppliers and key brands. They will drive the next leg of share gains, said CLSA.

Prabhudas Lilladher on BEML
Rating: Buy | Target Price: Rs 3,345 | Upside Potential: 12%
BEML is in a sweet spot to capitalise on 'Make-inIndia' and the country’s flourishing metro, railway & defence capex story led by defence order pipeline of Rs 40,000 crore; order potential of Rs 10,000 crore in metro projects; Rs 36,500 crore opportunity in rolling stock for Vande Bharat trains; and healthy order book (Rs 12,400 crore) with Rs 800 crore capex planned, said Prabhudas Lilladher.

"We estimate revenue and adjusted PAT CAGR of 16.4 per cent and 50.3 per cent, respectively over FY23-26E, with significant margin expansion of 420 bps owing to revenue scale-up and falling manpower. The stock is currently trading at a P/E of 29.4times and 22.3 times on FY25 and 26E earnings, respectively. We initiate coverage on BEML with a ‘buy’ rating at a target price of Rs 3,345," it said.

Monarch Networth Capital on Pricol
Rating: Buy | Target Price: Rs 465 | Upside Potential: 30%
Pricol, with a towering market share for cluster instruments in multiple sub-segments of the auto industry, is at a transformational stage after an extended period of uncertainty created by several endogenous and exogenous factors. All stars appear to be aligned: it should grow faster than industry on the back of a premiumization trend, said Monarch Networth Capital.

"Even excluding any impact of new products and acquisitions, we expect margin expansion, a net cash balance sheet and very strong growth together elevating return ratios, buttressing a possible re-rating. We initiate coverage on Pricol with a 'buy' and target price of Rs 465," it added.

Emkay Global on Motilal Oswal Financial Services
Rating: Buy | Target Price: Rs 2,000 | Upside Potential: 25%
Emkay's bullish stance on Motilal Oswal (MOSFL) is underpinned by three factors- capital markets (Broking and IB) are built around solid economic moats that have withstood various crises/shocks, disruptions of the discount broking model and have still seen impressive compounding of revenue & profitability over the mid-to-long term, said Emkay Global.

"The Asset & Wealth Management businesses are hinged on MOFSL’s ‘equity expertise’, having attained critical mass, and are well-propped to deliver superior profitability growth and MOFSL's net-worth is Rs 8,300 crore, of which 70 per cent is in Equity & MF treasury assets, thus providing an added safety margin to valuations of core operating businesses," it added with a buy tag and a target price of Rs 2,000.

Sunidhi Research on Shriram Properties
Rating: Buy | Target Price: Rs 224 | Upside Potential: 108%
Shriram Properties has a strong balance sheet with a net debt of Rs 450 crore as of December 2023. Given ongoing projects and launch pipeline, the company is confident of strong growth momentum sustenance for pre-sales to the tune of 20 per cent CAGR over the next 3 years.

"For FY24E, sales volume is expected to be 4.8msf, while pre-sales to grow at 26 per cent YoY to 2,300 crore and collection to grow at 47 per cent YoY to Rs 1,600 crore. Its Ebitda margins are likely to be in the range of 20-25 per cent going forward. We initiate coverage on Shriram Properties with a ‘buy’ rating and target price of Rs 224," it said.

Anand Rathi Research on Electrosteel Castings
Rating: Buy | Target Price: Rs 185 | Upside Potential: 20%
Electrosteel Castings is an India-based pipeline solution provider. The Company is engaged majorly in the business of manufacturing ductile iron pipes, ductile iron fittings and cast iron pipes. Its products also include ductile iron flange pipes, restrained joint pipes, cement and ferro alloys. The Company operates through pipes and fittings segment, said Anand Rathi.

"The company has shown improvement in performance. EBITDA margin has been in double digit over the years which shows its resilience and competitive edge over its peer group. Going ahead, the company plans to make surplus investment towards capacity expansion, supported by backward integration and sector tailwind. We initiate the coverage with a 'buy' rating with a target price of Rs 185," it said.

JM Financial on Happy Forgings
Rating: Buy | Target Price: Rs 1,100 | Upside Potential: 27%
Happy Forgings (HFL) is one of the leading manufacturers of safety-critical, complex, heavy-forged and high-precision machined components to CV, Farm, OHV, Industrial and PV segments. HFL’s integrated and advanced manufacturing capabilities, track record of developing diverse portfolio of products, ability to cater to customers’ varying requirements and its longstanding customer relationships bolstered by stringent quality standards gives it an advantage over its peers, said JM Financial.

"The company has emerged as a leading manufacturer of crankshafts and supplies to most of the leading MHCV and Farm OEMs in India. HFL has been consistently outperforming growth of its underlying CV/Tractor industry led by expansion in product portfolio, addition of new customers and increase in wallet share with existing customers," it added with a 'buy' and target price of Rs 1,100.

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