Blue chip companies are those companies that are well-established, stable and recognized. Investors consider investments in these companies to be stable and reliable. These companies usually sell high-quality, widely accepted products and services and are known to operate profitably in the face of adverse economic conditions.
Here are three blue chip companies in which brokerages see an upside of up to 22%:
Eicher Motors Limited
Eicher motors, the parent company of Royal Enfield zoomed more than 3% on Tuesday’s early trades as global brokerage CLSA raised its target price on the stock to ₹ 4154.00.
The auto major’s scrip hit a 52-week high of ₹3479.45 on the Bombay Stock Exchange on Tuesday. The shares are currently trading at ₹ 3451.00 and this suggests a potential upside of 20.37%.
CLSA said that the company is seeing a strong replacement demand which is likely to support Royal Enfield’s volume growth. It said that Royal Enfield volumes grew at 33 per cent compounded annual growth in FY12-19. It added that most of these customers will be looking to replace their bikes over the next 7-8 years.
Better market and consumer sentiment, along with an improvement in supply chain and part availability, would also help, Eicher Motors had said while detailing June quarter earnings.
Titan Company Ltd
Titan has transformed itself from a watchmaker to an enviable lifestyle company. In fact, its jewellery business is the leading vertical that contributes about 85% of its revenues as per ICICI Securities.
The brokerage in its research report dated August 06, 2022, said that Titan has been an exceptional performer in the discretionary space with stock price appreciating at ~32% CAGR in the last five years.
They have maintained a buy rating on the stock with a target price of ₹ 2800 apiece. This implies an upside of 13.59% as compared to its current market price of ₹ 2465.00
ICICI Securities highlighted that Titan’s robust balance sheet and asset-light distribution model have enabled it to outpace peers in terms of store addition (to add 40+ Tanishq stores in FY23). The company currently has a market share of 6% in a ₹ 4 lakh crore market and this indicates that it has huge headroom for growth.
Reliance Industries Limited
Broking firm CLSA has maintained a buy rating on the shares of Reliance Industries and raised the target price to ₹3,180 from the previous target of ₹2,955 per share. This indicates an upside of 19.77% as compared to its current share price of ₹2655 apiece.
It mentioned that the big jump in cash flow was aided by the working capital. Further, CNBC TV 18 reported that there was an improvement in its return on equity and a fall in its leverage ratios.
Written by Simran Bafna
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