4 stocks that YES Securities recommended to buy for 20-30% gains in 12 months

YES Securities has recommended 'Buy' recommendations on four stocks namely Electrosteel Castings Ltd, United Spirits, Natco Pharma Ltd and Sharda Motors. The domestic brokerage sees 20-30 per cent potential upside on these counter over the next 12 months. Electrosteel Castings may deliver 30 per cent return, followed by Sharda Motors 25 per cent, Natco Pharma 23 per cent and United Spirits 20 per cent, over Friday's closing price, the brokerage said.   
 
Electrosteel Castings | Target price: Rs 214

Electrosteel Castings Limited (ECL), a producer of Ductile Iron Pipes and Flange Pipes in India with a capacity of 700,000 tonnes per annum, operates in over 110 countries. It offers various joint types, linings, and coatings tailored to diverse markets. ECL aims for an EBITDA margin of 17-18 per cent and targets a production output of 850,000 tonnes for FY24-25. The current order book value stands at Rs 4,500 crore, with visibility for 9 to 10 months. ECL benefits from the Jal Jeevan Mission and anticipates further gains from the budget allocation and mission expansion, YES Securities said. It also stands to benefit from the AMRUT 2.0 scheme, aiming to provide water tap and sewage services, it said.

"With the recent reaffirmation of its long-term AA-/Stable and short-term A1+ ratings by Crisil, coupled with opportunities like the Jal Jeevan Mission and AMRUT 2.0, and the industry's demand outpacing supply, ECL is well-positioned to scale its operations. This strategic positioning promises organic growth, enhancing shareholder value and hence we recommend a Buy on ECL," the brokerage said.

Sharda Motors | Target price: Rs 2,000
Sharda Motor Industries Limited (SMIL) manufactures auto components and  white goods parts, serving as a Tier I vendor for major automobile and electronics OEMs. YES Securities said an increasing content per vehicle in both PV and CV segment, improvement in JV profitability and operating leverage should help the company grow its revenue and PAT consistently and at a faster pace for the next couple of years. 

"It also boasts a strong debt-free balance sheet, holding substantial cash and cash equivalents, with healthy return ratios and available at attractive valuations make it a steal, hence we recommend a Buy on SMIL," it said.

United Spirits | Target price: Rs 1,570 
United Spirits, India’s largest alcoholic beverage company and a Diageo Plc subsidiary, boasts a diverse portfolio spanning various price points, including popular brands like McDowell's and prestigious ones like Johnnie Walker, YES Securities said.
 

"With net revenues exceeding Rs 1,000 crore for top brands and Rs 500 for others in FY24, UNSP has experienced a significant shift towards premium segments, with the Prestige & Above (P&A) segment now contributing around 87 per cent to its sales. With favorable demographics and a focus on the P&A segment, UNSP is poised for growth. We recommend a BUY on United Spirits," it said.

Natco Pharma | Target price: Rs 1,330

Natco Pharma Limited, an India-based pharmaceutical company, excels in R&D, targeting niche markets with limited competition. With a debt-free status, a cash reserve of Rs 2,000 crore, and no major capex planned, it aims for over 20 per cent growth in both top and bottom lines for the next 3-4 years.

"Sharda Motor Industries Limited (SMIL) manufactures auto components and white goods parts, serving as a Tier I vendor for major automobile and electronics OEMs," Natco Pharma said.