New Delhi. Brokerage firm Jeferies has chosen four major companies in the engineering and construction sector as the top pics. These stocks are- Hindustan Aeronautics Limited (HAL), Siemens, Larsen & Toubro (L&T) and Kei Industries. Keeping in mind the strong order books, defense and power sectors, and operating leverage, Jeferies have taken a bullish stance on these stocks.
Hal
The bull case of Jefferies regarding HAL (if the market has a lot of rise) target is ₹ 7,500, which is 50% above the current price, while the base case (if the increase is normal) is the target ₹ 6,475 (30% upside). The firm is confident of order pipeline up to ₹ 1.7 lakh crore with HAL, which supports medium term growth. At the same time, under “Make in India”, the increase in domestic order share will make the company’s status stronger.
Siemens
The bull case target of jefferies on Siemens is ₹ 4,500, which shows a 36% increase. According to this, if India becomes a manufacturing hub for the parent company and the margin crosses the old levels, then the stock is possible. However, in the base case, only 12% upset is estimated with a target of ₹ 3,700.
Larsen & Toubro (L&T)
Larsen & Taubro (L&T) shares have already gained 9% in the last one month, but Jeferies see the possibility of a 9% increase in the base case. The base target of ₹ 3,965 includes 18% CAGR revenue growth and improvement in margin. The target of ₹ 4,310 in the bull case will be possible when there is a fast recovery in the macro investment cycle.
Kei Industries
Jefferies have shown the biggest upside on Kei Industries. The bull case target of ₹ 5,625 is 59% higher than the current price. Brokerage believes that the company’s income during FY25-FY27 may increase at a rate of 31% annually. At the same time, the base case target is ₹ 4,000, which includes an estimated growth of 25%.
Different risk in the four stocks are also kept in front such as delay in ordering in defense, margin pressure, decline in exports or improving inventory bicycle. Nevertheless, strong fundamentals and sector tailwinds of these companies make them attractive for long -term investment.
(Disclaimer: The stocks mentioned here are only aimed at giving information. If you want to invest in any of these, consult the first Certified Investment Advisor. News18 will not be responsible for any kind of profit or loss of you.)
