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3 stocks to buy, accumulate with potential upside of up to 50%

Amid the recent stock market volatility, analysts at brokerages Jefferies, Axis Securities and Geojit Financial are bullish on three stocks that include pharma stock Dr Reddy’s, bank stock DCB Bank, and FMCG stock L&T Foods respectively, as per their respective recent stock recommendations reports.

Three stocks to buy

Dr Reddys Laboratories (DRL): Dr Reddy’s aims for sustainable double-digit top-line growth, & plans to expand existing business and seek new opportunities such as Biologics CDMO & CGT, highlighted global brokerage Jefferies, which has a Buy rating on the pharma stock with a target price of 5,036 apiece.

DCB Bank: Despite operating primarily in the self-employed segment, DCB has been able to manage the asset quality stress fairly well. The collections have held up well and with the trend likely to sustain, the secured nature of the bank’s restructured book hints at credit costs moderating going forward, said Axis Securities in a note.

“The positive trends in terms of a strong recovery pipeline and moderation in slippages will aid in asset quality improvement. With asset quality stress and credit costs having peaked out, the balance sheet growth and improving return ratios should drive valuations for DCB. At 0.5x FY24E ABV, valuations are undemanding,” the note stated.

The brokerage has maintained its Buy recommendation on the bank stock with a target price of 115 per share, implying an upside of over 50% from the current stock level.

L&T Foods: LTF’s consistent efforts on strengthening the brands, widening distribution network, along with region & product diversification through organic & inorganic routes has been the strategy for growth, as per brokerage Geojit.

“The recent acquisition in Jasmine rice segment will strengthen market share. The re-opening of HoReCa channels is also aiding growth while LTF’s strong focus on value-added products will improve margins. LTF currently trades at 7x 1Yr Fwd P/E,” it said. The brokerage has accumulate rating on L&T Foods shares, factoring the current margin pressure,  with a target of price of 82.

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

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