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Business News/ Photos / NTPC, Star Cement and more: ICICI Direct lists 4 high conviction picks

NTPC, Star Cement and more: ICICI Direct lists 4 high conviction picks

Nifty50 hit a new record high in intra-day dels today (February 19) following gains in Asian peers. Most analysts expect the markets to continue gaining ahead of the elctiona with bouts of volatility. Brokerage ICICI Direct has come out with 4 high conviction picks for investors. Let's take a look:

Bharat Dynamics: The brokerage has a buy call on the stock with a target price of  <span class='webrupee'>₹</span>2,010, indicating a potential upside of 21 percent. ICICI believes BDL is strongly placed to benefit from increasing capital outlay for indigenised defence platforms like missiles, torpedoes & Counter-measure dispensing systems. It estimates revenue, EBITDA and PAT to grow at 29.4%, 41.4% and 46.9% CAGR respectively over FY23-26E. Valuation at 27.3x P/E on an FY26E basis looks attractive given the strong growth ahead led by multiple sectoral tailwinds. It recommends BUY on BDL with a target price of  <span class='webrupee'>₹</span>2010 per share (based on 33x FY26E EPS), recommended the brokerage. The stock has jumped 96 percent in the last 1 year and around 3 percent in 2024 YTD. BDL is one of the leading defence PSUs in India, is engaged in the manufacture of surface-to-air missiles (SAMs), anti-tank guided missiles (ATGMs), air-to-air missiles (AAMs), underwater weapons, launchers, countermeasures and test equipment. 

1/4Bharat Dynamics: The brokerage has a buy call on the stock with a target price of 2,010, indicating a potential upside of 21 percent. ICICI believes BDL is strongly placed to benefit from increasing capital outlay for indigenised defence platforms like missiles, torpedoes & Counter-measure dispensing systems. It estimates revenue, EBITDA and PAT to grow at 29.4%, 41.4% and 46.9% CAGR respectively over FY23-26E. Valuation at 27.3x P/E on an FY26E basis looks attractive given the strong growth ahead led by multiple sectoral tailwinds. It recommends BUY on BDL with a target price of 2010 per share (based on 33x FY26E EPS), recommended the brokerage. The stock has jumped 96 percent in the last 1 year and around 3 percent in 2024 YTD. BDL is one of the leading defence PSUs in India, is engaged in the manufacture of surface-to-air missiles (SAMs), anti-tank guided missiles (ATGMs), air-to-air missiles (AAMs), underwater weapons, launchers, countermeasures and test equipment. 

NTPC: The brokerage has a buy call on the stock with a target price of  <span class='webrupee'>₹</span>400, indicating a potential upside of 21 percent. An aggressive renewable capacity addition plan to the tune of 16000 MW over FY24E-FY26E, will scale up the green portfolio of the company and lead to the rerating of the stock. It values the stock at 2.2x P/BV of FY26E. NTPC is India’s largest power generation company with a total installed capacity of 73847 MW at the group level as of 9MFY23. NTPC has 17% of the total installed capacity in India with a 24% generation share. The company’s vision is to become a 130 GW+ company by 2032 of which 60 GW would be contributed by renewable energy. The brokerage has surged 101% in the last 1 year and over 9 percent in 2024 YTD.

2/4NTPC: The brokerage has a buy call on the stock with a target price of 400, indicating a potential upside of 21 percent. An aggressive renewable capacity addition plan to the tune of 16000 MW over FY24E-FY26E, will scale up the green portfolio of the company and lead to the rerating of the stock. It values the stock at 2.2x P/BV of FY26E. NTPC is India’s largest power generation company with a total installed capacity of 73847 MW at the group level as of 9MFY23. NTPC has 17% of the total installed capacity in India with a 24% generation share. The company’s vision is to become a 130 GW+ company by 2032 of which 60 GW would be contributed by renewable energy. The brokerage has surged 101% in the last 1 year and over 9 percent in 2024 YTD.

Gabriel India: The brokerage has a buy call on the stock with a target price of  <span class='webrupee'>₹</span>440, indicating a potential upside of 20 percent. The brokerage has assigned a BUY rating on Gabriel India amidst structural levers in place for industry-leading topline growth, double-digit margin endeavor, capital-efficient business model, healthy cash-rich B/S, EV agnostic product profile, gaining prominence in PV-SUV space, foray into premium segment offering (i.e., sunroof systems) and leadership position in E-2W/3W space. Gabriel India (GIL) is a global top-10 shock absorber manufacturer serving 2-W, 3-W, PV, CV, railway and aftermarket segments. The stock has rallied over 127 percent in the last 1 year but has lost 5.5 percent in 2024 YTD.

3/4Gabriel India: The brokerage has a buy call on the stock with a target price of 440, indicating a potential upside of 20 percent. The brokerage has assigned a BUY rating on Gabriel India amidst structural levers in place for industry-leading topline growth, double-digit margin endeavor, capital-efficient business model, healthy cash-rich B/S, EV agnostic product profile, gaining prominence in PV-SUV space, foray into premium segment offering (i.e., sunroof systems) and leadership position in E-2W/3W space. Gabriel India (GIL) is a global top-10 shock absorber manufacturer serving 2-W, 3-W, PV, CV, railway and aftermarket segments. The stock has rallied over 127 percent in the last 1 year but has lost 5.5 percent in 2024 YTD.

Star Cement: The brokerage has a buy call on the stock with a target price of  <span class='webrupee'>₹</span>240, indicating a potential upside of 23 percent. ICICI estimates a revenue CAGR of 12% over FY23-26E while EBITDA and PAT CAGR at 22% and 24%. The balance sheet position remains healthy (net cash in FY26E) despite significant capex. With improvement in asset turnover and margins, return rations are also expected to improve, said the brokerage. Valuation at 8.8x EV/EBITDA on FY26E basis looks attractive considering the company’s strong growth ahead with further strengthening its market position in NE, it added. Star Cement (SCL) is the leading cement company in north-eastern India with having presence in some of the eastern Indian states as well. The company has a total cement capacity of 5.7 million tonnes (mtpa) at present. The stock has gained 87 percent in the last 1 year and 19 percent in 2024 YTD.

4/4Star Cement: The brokerage has a buy call on the stock with a target price of 240, indicating a potential upside of 23 percent. ICICI estimates a revenue CAGR of 12% over FY23-26E while EBITDA and PAT CAGR at 22% and 24%. The balance sheet position remains healthy (net cash in FY26E) despite significant capex. With improvement in asset turnover and margins, return rations are also expected to improve, said the brokerage. Valuation at 8.8x EV/EBITDA on FY26E basis looks attractive considering the company’s strong growth ahead with further strengthening its market position in NE, it added. Star Cement (SCL) is the leading cement company in north-eastern India with having presence in some of the eastern Indian states as well. The company has a total cement capacity of 5.7 million tonnes (mtpa) at present. The stock has gained 87 percent in the last 1 year and 19 percent in 2024 YTD.

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