Investment Ideas: Globe Capital lists 5 stock picks with potential upside of up to 51%

Following a 6.5 percent surge in June, Indian markets have continued their bullish trend, adding another 2.6 percent in July. Positive election results, stable inflation, a return of FPI inflows, and hopes for a rate cut have bolstered investor sentiment. With the upcoming budget and Q1 earnings in focus, analysts anticipate continued market growth but recommend a more stock-specific approach. In this context, brokerage house Globe Capital has identified five investment ideas with a 12-month perspective, offering potential upsides of up to 51 percent. Let’s take a look.

Indus Towers: The brokerage has a ‘buy’ call on the telecom stock with a target price of ₹515, implying an upside of 27 percent. The stock has surged 149 percent in the last 1 year and over 103 percent this year so far. Indus has strong fundamentals backed by the largest and fastest-growing conglomerate, Bharti Group, said Globe. Indus Towers, one of India's largest telecom tower companies, offers tower and infrastructure sharing services to wireless telecommunication providers under long-term contracts. As of Q3 FY24, it operates over 211,775 towers and 360,679 co-locations across all 22 telecom circles, up from 179,225 towers and 322,438 co-locations in FY21. The company plans a capex of ₹9,500 cr in CY24 for the nationwide 5G rollout, compared to ₹4,121 cr in FY23. Indus Towers anticipates growth in tower additions, driven by rural expansion and 5G rollouts, noted the brokerage.

Bank of India: The brokerage has a target price of ₹165 for the banking stock, implying an upside of almost 37 percent. The stock has jumped 54 percent in the last 1 year and over 7 percent this year so far. The stock is trading at P/BV multiple of only 0.77 times which lowest within PSU banks, stated Globe. Bank of India, one of the largest PSU banks, has a deposit base of Rs. 7,40,611 crore and over 5,100 branches across India, managed through 69 Zonal Offices and 13 NBG Offices. In FY24, the bank's net profit rose by 57% YoY to Rs. 6,318 crore, with a global NIM of 2.97% and domestic NIM of 3.34%. The gross NPA ratio improved to 4.98%, and net NPA ratio to 1.22%. With a focus on digital initiatives, growth in deposits and advances, and improved financial metrics, the stock is recommended as a 'BUY', said the brokerage.

SAIL: The brokerage has a target price of ₹215 for the steel stock, implying an upside of over 51 percent. The stock has rallied 63 percent in the last 1 year and over 15 percent this year so far. SAIL, a Maharatna company and one of India's largest steel producers, operates five integrated plants and three special steel plants primarily in the eastern and central regions. The firm plans a capex of INR 6,300 crores this year, aiming to increase capacity to 35 million tons by 2030-31. It targets production of over 20 million tons and sales of 90 million tons this year, focusing on inventory reduction and anticipating positive growth in FY 2025 despite challenges from Chinese steel imports.

With optimism about sustained domestic consumption growth, SAIL's outlook remains positive. At the current price of ₹152, the stock trades at a P/E multiple of 16.18. Given a reasonable P/E multiple of 15 times against the industry P/E of 32 times, the stock price is projected to reach around ₹215 in 12 months.

Motherson Sumi Wiring: The brokerage has a target price of ₹105 for the auto ancilliary stock, implying an upside of over 45 percent. The stock has advanced over 27 percent in the last 1 year and over 17 percent this year so far. Leading the Indian wiring harness industry with over 40% market share, MSWIL supplies 10 of the 12 top-selling passenger vehicle models and 2 of the top 3 electric vehicle PV OEMs in India. The top 10 customers contribute 70-75% of overall revenues.

Benefiting from the strong parentage of Samvardhana Motherson International Limited and Sumitomo Wiring Systems, which hold 33.4% and 25.1% stakes respectively, MSWIL has significant financial flexibility. With customers expanding production capacities and new facilities coming online, MSWIL anticipates robust growth. The company aligns with major OEMs' expansion plans and new vehicle launches. At the current price of ₹74, the stock trades at a P/E multiple of 51 times its current EPS. A ‘BUY’ rating is recommended with a target price of ₹105 in 12 months, said Globe.

Great Eastern Shipping: The brokerage has a target price of ₹1,735 for the shipping stock, implying an upside of over 31 percent. The stock has gained 71 percent in the last 1 year and over 35 percent this year so far. As India's largest private sector shipping company, GE Shipping reported its highest-ever net profits of Rs. 2,614 crores consolidated. Future plans include a subsidiary in GIFT City for shipping, investing in ships at favorable prices, and repricing vessels to boost EBITDA. With a strong balance sheet and stable economy, the stock, trading at a P/E of 8.63x at Rs. 1,440, is recommended as a 'BUY' with a target price of Rs. 1,735 in 12 months, Globe noted.

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.