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 stocks with an upside of up to 25%
Federal Bank Ltd
The Federal Bank Limited (was incorporated in 1931 as Travancore Federal Bank Limited). It provides retail and corporate banking, parabanking activities such as debit cards, third-party product distribution, etc., treasury, and foreign exchange business.
Federal Bank Ltd. shares gained 7% in the last six months and 20% in a year. The company has a market capitalization of ₹37,553 crore.
The company’s revenue increased by 30 percent year on year, from ₹4,698 crore in Q3FY23 to ₹6,085 crore in Q3FY24. During the same time, net profit has increased by 25 percent, from ₹856 crore to ₹1,067 crore.
Nomura has initiated a ‘buy’ rating on Federal Bank Ltd. with a target price of ₹ 190 per share, representing an upside potential of up to 24% from Wednesday’s trading price of ₹154 apiece.
Nomura anticipates a 22% CAGR in the bank’s Pre-Provisioning operating profit from 2024 to 2026. Federal Bank is valued at 1.2 times its December 2025 price-to-book value, including an 8 per share contribution from its subsidiaries.
Federal Bank MD & CEO Shyam Srinivasan, who has been at the helm since 2010 will be moving on in September 2024 and Nomura believes that the move will be a key near-term monitorable for the stock going forward.
Nomura says that there is an ongoing CEO search at Federal Bank, with a final candidate list expected by March 2024. Speculation surrounds KVS Maniyan as a potential candidate.
Despite liquidity challenges and deposit disputes, the bank remains in a favorable position. No significant pressure from unsecured retail loans, and positive growth observed in business banking, microfinance, agriculture, rural, and gold loans.
Cello World Ltd
Cello World is a leading Indian consumer product company, mainly dealing in writing instruments and stationery, molded furniture, consumer housewares, and related products. Cello World Ltd. shares have gained 10% in the last six months.
The company’s revenue increased by 32 percent year on year, from ₹1,359 crore in FY21-22 to ₹1,797 crore in FY22-23. During the same time, net profit has increased by 30 percent, from ₹220 crore to ₹285 crore. The company has a market capitalization of ₹18,587 crore.
Motilal Oswal has initiated a ‘buy’ rating on Cello World Ltd. with a target price of ₹1,100 per share, representing an upside potential of up to 25% from Wednesday’s trading price of ₹877 apiece.
The brokerage anticipates strong annual growth for the company, projecting an 18% revenue increase, 23% EBITDA growth, and 25% profit after-tax growth from FY23 to FY26. This growth is attributed to the expansion of products and distribution, along with significant growth in the glassware segment after the commissioning of a new plant in Rajasthan.
The margin is projected to rise from 23.4% to 26.7% by FY26, driven by economies of scale, improved manufacturing and distribution efficiency, and a growing proportion of value-added products. Broker added.
Motilal states that Cello has established a robust brand portfolio, featuring “Cello” and “Unomax” along with numerous sub-brands. The company is dedicated to innovation and expansion, regularly launching new products across diverse categories, amounting to approximately 15,841 SKUs, to meet evolving consumer needs.
Written by Omkar Chitnis
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