Three Mid-Cap Stocks To Buy Now (Sharekhan Recommendations)

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Ravi
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Three Mid-Cap Stocks To Buy Now (Sharekhan Recommendations)

Post by Ravi » Tue Sep 17, 2019 11:56 am

Sharekhan has picked up three distinctive mid-cap stocks from diverse sectors, which have strong fundamentals and offer very attractive potential returns. Moreover, these stocks are available at attractive valuations and give comfort for investment.

Bharat Electronics manufactures electronics, communication and defence equipment and stands to benefit from enhanced budgetary outlay for strengthening and modernising India’s security. The company has bagged the Akash Missile System order worth Rs. 5,357 crore from the government. The order is a turnkey contract with specialist infrastructure, expected to be delivered in three years and will be commissioned at seven air force locations spread across India. The cumulative order intake for FY2019-20 till date increases to Rs. 7,342 (Rs. 1,985 crore in Q1FY2020). The company’s robust order book of Rs. 51,715 crore, at 4.3x of FY2019 revenue provides healthy revenue visibility. We expect revenue and earnings to clock CAGRs of 14.4% and 7.7% during FY2019-2021E. We maintain our Buy rating on Bharat Electronics Limited (BEL) with an unchanged PT of Rs. 140.

Federal Bank has been strategically been re-orienting its business portfolio by building incremental book in better-rated borrowers (on corporate side) and granular and higher-yielding book (CV, cards and PL) on the retail and business banking side. The bank’s efforts to diversify its income source by investments in related businesses, adding new streams to fee and other income are also bearing fruits. Federal Bank has been conspicuously absent from any recently news on troubled corporate loans which is a positive, and provides confidence on credit cost and growth potential.

KEC International has a presence in the verticals of power transmission and distribution, railways, civil, solar, smart infrastructure and cables. It is expected to perform well, backed by its sound execution and strong order book. Based on the continued strong growth momentum across its verticals and a healthy growth outlook we maintain our Buy rating on the stock.

Sharekhan

Recommendation CMP (Rs.) Price target (Rs.) Action

Bharat Electronics 109.30 140 Invest Now

Federal Bank 85.30 120 Invest Now

KEC International 247.50 375 Invest Now
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