As the festive season of Diwali approaches, investors are eagerly looking for stock picks that could generate significant returns in the upcoming financial year. Nirmal Bang has identified several companies that have strong growth potential and unique market strategies.
Archean Chemicals is facing challenges in its bromine segment but remains optimistic about growth opportunities in bromine derivatives and its recent acquisition of Oren Hydrocarbon. Despite delays in shipments impacting its Q1FY25 performance in industrial salt, the company is expected to recover. Analysts project a 16% growth in revenue from FY24 to FY27, with a target price of Rs 823 per share. Archean Chemicals' focus on diversifying its product offerings and improving operational efficiencies positions it well for future growth. The anticipated sales from a second-grade SOP pilot plant, expected to start in Q3, could further boost the company's revenue streams.
Fineotex Chemical is experiencing robust growth and plans to expand its production capacity by 40,000 MTPA in two phases by FY25. The company has raised Rs 343 crore to support its long-term expansion strategy, which includes both organic and inorganic growth avenues. With a strong emphasis on sustainable products, Fineotex aims to increase its market share while maintaining healthy financial metrics, including a return on capital employed (ROCE) of 34.3% and a return on equity (ROE) of 29.9%. The company's commitment to sustainability and innovation is expected to drive future profitability, making it an attractive option for investors.
Five Star Business Finance is strategically positioned to tap into the underserved business loan market, focusing on secured loans for unbanked, self-employed individuals. With an average loan size of Rs 3.5 lakh, secured by self-occupied residential properties, the company has developed a resilient business model that thrives in a challenging lending environment. Analysts project a robust 28% compound annual growth rate (CAGR) in assets under management (AUM) from FY24 to FY27E. Five Star Business Finance's strong return on assets (RoA) of 8% and return on equity (RoE) of 19% for FY25E highlight its profitability potential. With a recommendation to 'BUY' and a target price of Rs 1,165, the company is poised to deliver significant returns.
Garware Hi-Tech Films is well-positioned to benefit from the expanding premium vehicle market in India. The company has a wide network of OEM dealerships and channel partners, which will help it capitalize on the increasing demand for premium protective films, especially driven by SUVs, luxury cars, and electric vehicles (EVs). GHFL is also adapting to the China-plus-one strategy for shrink film manufacturing, enhancing its competitive edge. With ongoing capacity expansion and a shift towards higher-margin, value-added products, GHFL is expected to generate 89% of its revenue from premium offerings in FY24. Analysts recommend a 'BUY' with a price target of Rs 4,848, indicating a potential upside of 20%.
These stock picks offer a combination of growth potential and strategic positioning, making them worthy of consideration in a diversified investment portfolio as investors prepare for the upcoming financial year.