The Bombay Stock Exchange (BSE) logo is displayed in front of a bronze bull statue at the Bombay Stock Exchange in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg) 

Brokerages Say These 3 Stocks May Rise Another 30%

Stocks of technology services firm Persistent Systems Ltd., coal tar pitch manufacturer Himadri Speciality Chemical Ltd. and hair care products maker Bajaj Corp Ltd. received their most bullish price targets after three brokerages initiated coverage.

Here’s what the brokerages had to say:

Credit Suisse On Persistent Systems

  • Initiated ‘Outperform’ with target price of Rs 960, implying a potential upside of 29.1 percent from yesterday’s close.
  • Persistent is an attractive digital play; the company has transformed itself to address the larger enterprise digital opportunity.
  • Expect digital exposure to be at least 40 percent and non-linear revenue to be 25 percent.
  • Increasing share of high-growth businesses to drive overall growth.
  • Product DNA, partnerships with growing platforms, and internet of things are key differentiators.
  • Expect strong earnings revival over the financial years through March 2020.
  • Expect revenue and earnings per share to grow at a compounded rate of 12 percent and 18 percent, respectively, over the financial years through March 2020.
  • For best in industry growth, stock trades at reasonable valuations.

Axis Securities On Himadri Speciality Chemical

  • Initiated ‘Buy’ with target price of Rs 238, implying a potential upside of 30 percent from yesterday’s close.
  • New products to drive growth. Himadri deals in products widely used in high growth sectors. Foray into speciality product to add value.
  • Entry barriers exists in form of technology and experience.
  • Coal Tar Pitch - the flagship product has robust demand.
  • Carbon Black - the new earnings driver.
  • Value-added products to help improve margins.
  • Expect revenue and net profit to grow at a compounded annual growth rate of 23 percent and 58 percent over the financial years through March 2020.
  • Deserves premium valuations because of robust growth potential.
  • Company has plans to raise capital using QIP route.

Macquarie On Bajaj Corp

  • Initiated ‘Outperform’ with target price of Rs 637, implying a potential upside of 28.4 percent from yesterday’s close.
  • Bajaj Corp. is a major play on a rural recovery in India.
  • Strengthened core to help accelerate meaningful new launches; aid long-term growth potential.
  • Bajaj can potentially have a portfolio of hair-oil brands.
  • Bajaj Almond Drops remains a cash cow, but company to reduce dependence.
  • Expect significant ramp-up in NoMarks over the financial years through March 2020.
  • Expect volume, revenue, operating income and net profit to grow at a compounded rate of 7 percent, 17 percent, 19 percent and 15 percent, respectively, over the financial years through March 2020.
  • Rural recovery to help boost volume.
  • Bajaj Corp re-rating imminent on earnings pick-up and diversification.