Axis Securities has recently highlighted six midcap stocks with promising potential in the chemicals and engineering sectors. These stock picks include Aarti Industries, Gravita India, VA Tech Wabag, Kirloskar Brothers, Pitti Engineering and Mold-Tek Packaging.
Aarti Industries
Aarti Industries is a well-known player in the chemical industry. Axis Securities sees it as a strong conviction pick.
Gravita India
Gravita India has gained traction following Axis Securities' initiation of coverage with a "Buy" recommendation. On September 25, 2024, the stock surged 4.18% to an intraday high of Rs 2,600 on the NSE, driven by robust trading volume. Axis Securities analysts recommend buying Gravita India shares with a target price of Rs 3,000 per share, suggesting a potential 20% upside from the previous day's closing price. The brokerage firm is confident in Gravita's potential, citing its dominant market position, improving profitability, a favorable regulatory landscape, and diversified offerings. Gravita aims to diversify into lithium, steel, and paper recycling under its 'Vision 2028' strategy. This expansion is expected to enhance revenue growth and improve cash flows significantly. The company is targeting over 30% non-lead business contribution, a 25% volume CAGR, and a 35% profitability CAGR.
VA Tech Wabag
Axis Securities has a positive outlook on VA Tech Wabag, a water technology company. On November 27, 2024, Axis Securities gave a "buy" call for VA Tech Wabag stock, setting a target price of Rs 1,860, a 10% increase. The company's Q2 results showed improved total income and profits. VA Tech Wabag is focusing on higher-profit projects and improving its product mix for better margins and long-term sustainability. Axis Securities maintains a "buy" rating on VA Tech Wabag, with a target price of Rs 1,930 per share. The brokerage firm expects a 15-20% revenue CAGR over the next 3-5 years, with EBITDA margins in the range of 13-15%. In the first half of FY26, the company secured fresh order inflows of approximately Rs 3,477 crore, ending the quarter with a diversified order book of around Rs 16,020 crore. VA Tech Wabag has been strategically enhancing the quality and predictability of its revenue in recent years.
Kirloskar Brothers
Kirloskar Brothers is also among Axis Securities' top conviction ideas.
Pitti Engineering
Pitti Engineering is included in Axis Securities' list of midcap stock picks.
Mold-Tek Packaging
Mold-Tek Packaging completes the list of Axis Securities' midcap recommendations.
