Stocks to buy: DMart, Cera, La Opala among preferred retail stock picks for up to 33% upside
Relaxo Footwears, Campus and Bata India. Grocery segment is expected to register recovery led by Avenue Supermarts (DMart), while the luggage sector will continue to grow at a strong pace led by a healthy travel trend with Safari Industries and VIP registering +18 and +7% sales growth. “From our building materials universe, we expect PVC pipes manufacturers – Supreme Industries followed by Astral to report healthy pipes volume growth (+22/18%).
EBITDA margins for PVC pipes players are expected to improve sequentially led by benign RM prices. Cera Sanitaryware is expected to report growth of 10% on a stable margin profile," Centrum Broking said in a report. Also Read: Stock picks: Coforge, Mastek, Birlasoft among Sharekhan’s preferred midcap IT stocks to buy ahead of Q2 results Centrum Broking’s preferred picks are Avenue Supermarts, Safari Industries, Cera Sanitaryware and La Opala RG.
The brokerage firm has a ‘Buy’ rating on the Radhakishan Damani-led Avenue Supermarts, the DMart retail chain operator, and has a target price of ₹5,055 per share, implying an upside potential of 33% from Monday’s closing price. Avenue Supermarts is expected to report an 18.5% year-on-year (YoY) revenue growth at ₹12,307.7 in the quarter ending September 2023. The company’s net profit is likely to fall 7.5% YoY to ₹675.9 crore in Q2FY24.
Safari Industries, the luggage and travel bags manufacturer, is expected to report a net profit of ₹36.9 crore in the second quarter of FY24, registering a growth of 42.9% YoY. The company’s revenue may rise 18% YoY to ₹371.6 crore, as per Centrum Broking’s estimates. The brokerage firm has a ‘Buy’ call on the stock with a target price of ₹3,995 per share.
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