A target price is an analyst’s projection for the future price of a stock, which the analyst believes stock at a reasonable price.
Based on the company’s previous achievements as well as future goals and strategy. A lower price target, on the other hand, may indicate that the analyst believes the stock will fall in value.
Here are two reality sector stocks with an upside of up to 39%
Sunteck Realty Ltd
Sunteck Realty Limited is engaged in real estate and construction of residential projects mainly focused on developing premium residential and commercial properties across the Mumbai Metropolitan Region.
On Friday, the shares were trading at Rs 458.20 per share, down 2.75 percent on the National Stock Exchange.
The company’s shares have delivered returns of 54 percent in six months and 31 percent in a year.
The company’s revenue decreased by 69 percent year on year, from Rs 81 crore in Q2FY23 to Rs 25 crore in Q2FY24. During the same time, net losses have increased from Rs 1 crore to Rs 14 crore.
Motilal Oswal has initiated a ‘buy’ rating on Sunteck Realty with a target price of Rs 640 per share, representing an upside potential of up to 39% from Friday’s close price of Rs 458.20 apiece.
The brokerage believes that the company is likely to post a 25% CAGR over FY 23-26 (reaching INR31b), as it is gearing up for 2-3 new project launches. Further, Sunteck’s strong balance sheet (D/E of 0.1x), and robust cash flows (cumulative OCF of Rs 16b over FY23-26E).
Motilal Oswal believes the company’s strong balance sheet, strong cash flow, and recent partnership with IFC would help in project additions and drive a sustainable growth trajectory.
Dalmia Bharat Ltd
Dalmia Bharat is engaged in the business of Manufacturing and Selling Cement and it is the 4th largest cement manufacturer by installed capacity in India.
On Friday, the company shares closed at Rs 2,390.70 per share, up 1.26 percent on the National Stock Exchange.
The company’s revenue increased by 6 percent year on year, from Rs 2,971 crore in Q2FY23 to Rs 3,149 crore in Q2FY24. In the same time frame, net profit has increased by
162 percent from Rs 47 crore to Rs 123 crore.
The company’s shares have delivered returns of 8.8 percent in six months and 27 percent in a year.
Motilal Oswal has initiated a ‘buy’ rating on Dalmia Bharat Ltd with a target price of Rs 2,800 per share, representing an upside potential of up to 17% from Friday’s close price of Rs 2,390.70 apiece.
The brokerage is bullish on the company’s long-term prospects, based on its ambitious expansion goals and emphasis on execution. By 2031, the business intends to raise its capacity to 110-130 million tonnes per annum (MTPA) at a 14-17% CAGR.
Motilal Oswal predicts a consolidated revenue, EBITDA, and PAT CAGR of 11%, 24%, and 34%, respectively, during FY 23-26, driven by greater sales volume, cost-cutting measures, and a reduced tax rate.
Written by Omkar Chitnis
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