value stocks: These value stocks offer up to 116% upside potential in

With the Sensex jumping 130% in the past 18 months to 60,000, the hunt is on for stocks which have not participated in the recent rally and companies that could benefit from the revival of business activity. Analysts at top brokerages think shares of select housing finance, auto, sugar companies, and multiplex operators fit this criteria. These stocks could offer up to 116% upside, they say. ET takes a look at these value picks of leading brokerages.

Motilal Oswal


LIC HOUSING
CMP: Rs 434.9 Target Price: Rs 525

Change Since Jan 1: 20.4%

Siddhartha Khemka, head- retail research, at Motilal Oswal sees another 20.7% upside in LIC Housing Fin. He expects the capitalisation or leverage concerns for LIC Housing to be ironed out once they are able to resolve the stalemate on the equity capital raise with the exchanges. “We draw comfort from LIC Housing’s ability to source low-cost liabilities, favorable housing finance cycle and the 11-12% return on equity,” says Khemka.

MAHINDRA & MAHINDRA
CMP: Rs 811.45 Target Price: Rs 950

Change Since Jan 1: 12.6%

Estimating a 17% upside in M&M, Khemka says valuations are still at a substantial discount to its 5-year average, capturing both the pain points of deterioration in utility vehicle market share and the performance of the subsidiaries. “M&M has reoriented its focus on growth after tightening its capital allocation policies. The auto segment is expected to see strong momentum in CVs and sports utility vehicles.”

Kotak Securities


PVR
CMP: Rs 1,596.8 Target Price: Rs 1,700

Change Since Jan 1: 21%

Shrikant Chouhan, head of research (retail), Kotak Securities, expects PVR’s business to recover over the second-half of FY22 as Covid restrictions ease. “Pent-up demand can potentially drive a surprise. PVR is trading at 14% discount to its pre-Covid valuations while several consumption stocks have re-rated. So there is room for some re-rating as operating metrics recover,” says Chouhan. The target price of Rs 1,700 implies a 6.5% upside.

LIC HOUSING
CMP: Rs 434.9 Target Price: Rs 600

Change Since Jan 1: 20.4%

The target price means that the stock has another 38% upside potential. An improving real estate cycle driving higher disbursements and possible gradual improvement in collections are in favour of LIC Housing Finance, says Chouhan. The recent capital issuance is also a comforting factor, he adds. The brokerage has recently upgraded the stock to ‘buy’ from ‘add’.

ICICIdirect

TRIVENI ENGINEERING
CMP: Rs 171.85 Target Price: Rs 270

Change Since Jan 1: 140.7%

The sugar sector has seen a steep rally but Pankaj Pandey, head of research at ICICIdirect, still sees value in the sector, estimating that Triveni Engineering can go up another 57%. “Sugar is one sector which we like because the ethanol story looks quite strong. Sugar stocks have rallied, but they are not pricey or expensive compared to the rest of the market. Triveni Engineering is what we like the most,” says Pandey.

BALRAMPUR…