Praj Industries, NOCIL, Affle India, Chola Invest, Safari Ind and more: B&K lists top 10 stock picks for July
B&K Securities releases top stock picks for July, including Affle India, Cholamandalam Investment, Neuland Laboratories, NOCIL, Praj Industries, Prudent Corporate Advisory, Safari Industries, and Samvardhana Motherson.
June closed with a notable 6 percent gain for the Indian market, its highest monthly increase in 2024 and the largest since December 2023. This surge reflects strong investor confidence bolstered by positive economic signals, expectations of policy consistency, and renewed foreign investments.
Looking forward, experts anticipate the bullish momentum in the Indian market to persist. If you're uncertain about your investment choices, B&K Securities has released its top 10 stock picks for July. Let's explore them:
Affle India: B&K has maintained a Buy rating on the stock with a target price of ₹1,474, implying an over 9% potential upside. The brokerage anticipates any disruptions to be temporary, with RMG (real money gaming) expected to recover in the upcoming quarters. Management's efforts in revitalising developed markets have shown positive results, offsetting revenue declines in the Indian market. Valuation-wise, the stock trades at a FY26E P/E of 42x. Projected growth rates include a revenue, EBITDA, and EPS CAGR of 22%, 26%, and 24% respectively from FY24 to FY26E. It advises utilising dips or corrections to accumulate more of the stock.
Cholamandalam Investment and Finance Company: The brokerage has a ‘Buy’ rating on the stock with a target price of ₹1,600, indicating an over 14% potential upside. B&K forecasts CIFC to achieve a 26.4% AUM growth CAGR from FY24 to FY26E, with management guiding for 25-30% growth in FY25. They anticipate a 23 basis points expansion in Net Interest Margin (NIM) over FY24-26, expecting margins for the VF (vehicle finance) business to improve from current levels. Credit costs are projected to normalise to 1.1% over FY25-26, supported by multi-year low-stress book asset quality. Return on Assets (RoAs) and Return on Equity (RoEs) are forecasted to range between 2.6% and 2.7% and approximately 21%, respectively, with AUM and Profit After Tax (PAT) achieving CAGRs of 26% and 33% over FY24-26E.
Neuland Laboratories: The brokerage upheld a Buy rating with a target price of ₹7,500 per share (2% downside). In its bullish scenario, incorporating the BMS molecule KarXT, B&K's target rises to ₹10,250 (33% upside). Although the current target price suggests limited upside, the brokerage remains optimistic about achieving its bullish target due to the compelling long-term prospects of the stock.
It also noted that Neuland has established a strong foundation with 1) a robust pipeline in its CMS division, 2) a shift in sales mix towards more profitable CMS supplies, and 3) healthy free cash generation totaling ₹1.2 billion (net cash position), enabling capacity and capability expansions. B&K projects a 12% PAT CAGR from FY24 to FY26, with EBITDA margins expected between 28% and 30%. Key molecules in CMS include Bempedoic acid for Espirion, with Neuland consistently supplying and expecting revenues to ramp up to $40-60 million over the next two to three years, added B&K.
NOCIL: The brokerage has a Buy rating on the stock with a target price of ₹354, indicating a 24% upside. From a modest FY24 base, earnings are projected to nearly double (1.8x), with Core Return on Capital Employed (RoCE) expanding from 10.5% in FY24 to 18.9% by FY26E, predicted B&K. It added that the company is expected to sustain its debt-free status and enhance free cash flow generation, driven by robust operational profits and no debt repayment commitments.
Praj Industries: B&K retained a Buy rating on the stock with a target price of ₹831 (11.5% upside). As per the brokerage, Praj Industries' progress in ethanol and engineering has bolstered its order book. With a focus on customer-centric strategies, technology leadership, and strong execution capabilities, the company aims to seize growth opportunities. It noted that Praj's technology supports 10% of global ethanol production. Key growth drivers include expanding 1G ethanol markets in India and overseas, international low-carbon opportunities, robust CBG market presence in India, diversification into bioproducts beyond fuels, and a vision for tripling revenue by 2030, stated B&K. It continues to believe that Praj is the best proxy play on sustainability and the decarbonisation theme.
Prudent Corporate Advisory Services: B&K maintains a Buy rating with a bullish target price of ₹2,186 (15% upside), factoring in consistent performance inflows, stable markets, and accelerated growth in insurance distribution. During the quarter, the firm's Average Assets Under Management exceeded ₹80,000 crore, with SIP monthly bookings surpassing ₹700 crore, noted the brokerage. The mutual fund business achieved a gross yield of 90 bps, reflecting robust execution across all segments and enhancing profitability. Despite a rich valuation of 35.5x FY26E earnings, sustained momentum in mutual fund flows and PRUDENT's focus on SIP-driven net flows are expected to drive significant PAT growth and support stock price appreciation, it added.
Safari Industries (India): The brokerage has a ‘Buy’ rating on the stock with a target price of ₹2,468 (18% upside). As per the brokerage, The mass segment is booming as consumers shift from unbranded to entry-level branded products, driven by competitive pricing, robust after-sales service, and diverse design choices. SII capitalised on this trend, rapidly expanding its market share in the organised sector, nearly doubling it from FY15 to FY24. It further noted that the firm is doubling its capacity to 1.15 million bags per month at a cost of ₹2.15 billion. Production will start at 0.3 million bags per month initially, ramping up by Diwali to meet future growth needs over the next few years.
Moreover, SII sees substantial potential in the backpack segment due to its dominance in the organised market, which contrasts with the predominantly unorganised sector at slightly higher price points. SII plans to achieve approximately ₹2000 crore in revenue from backpack sales over the next 8-10 years. It expects SII’s Sales/EBITDA/PAT to grow at 22.2%/23.2%/23.9%, respectively.
Samvardhana Motherson International: B&K maintains a Buy rating on the stock with a target price of ₹226 (15% upside). The brokerage remains optimistic about the stock's outlook, driven by sustained growth momentum. At the current market price of ₹190, the stock trades at 24.3x FY25E EPS of ₹7.8 and 18.5x FY26E EPS of ₹10.3. The anticipated growth in revenue, margin enhancement, diversification beyond automotive sectors, new order acquisitions, development of powertrain agnostic components, and synergies from recent acquisitions are key factors supporting B&K's positive view.
Usha Martin: The brokerage has a Buy rating on the stock with a target price of ₹471 (17% upside). Usha Martin is set for intermediate-term growth driven by increased production of value-added wire ropes from the Ranchi plant expansion, market penetration into higher-priced regions, including Saudi Arabia, and margin expansion, said B&K. Over the longer term, margins are expected to reach around 21%, with an improvement of approximately 300 basis points expected from FY24 to FY26E, alongside a projected 30% EPS compound annual growth rate, it predicted.
Vinati Organics: B&K has retained a Buy rating with a target price of ₹2,147 (13% upside). Vinati is one of the few companies that has successfully navigated the de-stocking cycle ahead of its peers, aiming for 25-30% volume growth in FY25, noted B&K. With a committed FY25 capex of ₹500 crore, focusing on expansions like ATBS, MEHQ, Guaiacol, ISO Amylene Derivatives, and antioxidants, the company anticipates a significant top-line increase, projecting a 26/31/31% CAGR in sales, EBITDA, and PAT from FY24 to FY26E. The stock is valued at 40x FY26E earnings, reflecting its strong market position and growth prospects, added the brokerage.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.