Larsen & Toubro - 19% upside
Valuation:The Company continues to focus on profitable execution of the large Order Book, selective order picking, on-time deliveries & operational excellence through digitalization. The management is also emphasizing on cost competitiveness, continuous optimization of working capital, restructuring of its business portfolio and value creation with an aim to enhance its Return on Equity. Implementation of GST is expected to have far reaching effects by bringing large parts of the informal economy into the formal system where compliance and accountability standards are of a higher order. Thus, it is expected that the stock will see a price target of Rs2061 in 8 to 10 months time frame on a 2 year average P/ Ex of 28. 98x and FY18 EPSof Rs71.11.
JB Chemicals & Pharmaceuticals - 24% upside
Valuation:The company, has a consistent, strong free cash flow annually, has positioned high focus on contract manufacturing for projects awarded by multinationals globally and growth of niche branded generics to strengthen stable revenue. Thus, it is expected that the stock will see a price target of Rs419 in 8 to 10 months time frame on a target P/ E of 17x and FY18 (E) EPS of Rs24. 62.
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