1 / 5IFGL Refractories | The stock is massively undervalued and has a large room for re-rating, according to Monarch Networth Capital. The brokerage house likes the company’s strong revenue growth due to product addition, continuous customer addition supported by capital expenditure for capacity expansion. It also likes the company’s net cash balance sheet along with the best in industry Free Cash Flow (FCF) yield and large cash balance leading to high dividend yield and appetite for inorganic expansion. The brokerage house recommends ‘buying’ the stock with a target price of Rs 585 implying an upside of about 87 percent.
2 / 5FIEM Industries | The brokerage firm likes the company’s high wallet share with key two-wheelers and original equipment manufacturers. The company’s well-diversified product portfolio of auto lighting, plastic parts, sheet metal parts, canisters and bank angle sensors, along with best in class margin profile as compared to peers in auto lighting also bodes well. Further, aggressive debt reduction in FY21 and FY22 is also a positive. Monarch Networth Capital sees the addition of new clients especially in electric vehicle space and growing revenue from new geographies as near-term triggers. The brokerage house has a ‘buy’ rating on the stock with a fair value of Rs 1,400 which means around a 21 percent gain.
3 / 5GATI | Gati is the best-placed in logistics sector as an Express B2B player, which is the fastest-growing logistics segment. The brokerage house sees about 15 percent run and has a fair value of Rs 220. Express B2B is characterised by a high margin, besides that, there has been a significant transition in business strategy with the transition from asset-heavy to asset-light operation. Aggressive debt reduction also augurs well, Monarch Networth Capital said.
4 / 5Saksoft | The company’s niche capabilities such as the Internet of Things in logistics, telemedicine in healthcare, card and payments in fintech gives it an edge over generic players which is evident from Saksoft winning deals against larger players. Robust financials, healthy balance sheet, net debt-free with cash of Rs 940 million are some other key positives. This might lead to higher dividend and inorganic growth opportunities, the brokerage house said. Monarch Networth Capital has a fair value of Rs 1,190 which means an upside of close to 20 percent.
5 / 5CRISIL | Strong parentage, superior margin profile, healthy return ratios with return on equity at 30 percent and dividend payout ratio provides comfort. The brokerage house sees about 30 percent upmove with a target price of Rs 3,700.
