Top picks for 2023: IIFL suggests these smallcap, midcap and largecap stocks to buy

   2022-12-25 17:12

Sharing its top picks exclusively with Livemint, domestic brokerage and research firm IIFL has suggested smallcap stock – EPL, midcap stock – PB Fintech (PolicyBazaar), and largecap stock – Reliance Industries Ltd (RIL) that investors can look to buy for the New Year 2023.



IIFL’s top stock picks

EPL: “Margins are poised for recovery from current levels, driven by further price hikes, a general improvement in the operating environment across geographies and operating leverage. 2QFY23 witnessed the consumption of the highest-priced inventory for EPL; unless raw materials were to further inflate hereon, EPL’s gross margin should witness an improvement sequentially. We forecast revenue/Ebitda/EPS Cagr of 12%/14%/21% over FY22-25ii. Maintain BUY with a target price of 205,” the brokerage suggested.

As per IIFL, 2QFY23 witnessed the consumption of the highest-priced inventory for EPL; unless raw materials were to further inflate hereon, EPL’s gross margin should witness an improvement sequentially. Price increases in both contractual and non-contractual customers, an improving operating environment in the Americas, Europe, and China as well as operating leverage from strong top-line growth — should further lift margins from current levels, it added. 

Reliance Industries Ltd: “RIL’s net debt stands at 933 bn, vs 348 bn in 4QFY22, on the back of CAPEX, spectrum payments, and WC expansion.. Rapid scaleup in clean energy may present an upside. Maintain buy with a 12M target price of 2914.”

PB Fintech: “PB Fintech reported 2QFY23 revenue growth of 105% YoY to ~Rs5.7bn, 9% above IIFL estimates. PBFI maintained guidance of overall EBITDA positive by 4QFY23 and remains on track to deliver it. We now forecast a quicker path to profitability, estimating a 12% lower PAT loss of 5.3 bn in FY23ii. Maintain 12 month target price of 650 and reiterate Buy.”

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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