Top Mid-Cap Stock Recommendations Of UBS

UBS Mid-Cap Stocks

Top Mid-Cap Stock Recommendations Of UBS
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Mid-Cap Stock buy recommendations by UBS

UBS has recommended the following six stocks as their top Mid-cap picks:

Multi Commodity Exchange of India (MCX):

We believe MCX is well poised to deliver strong growth as commodity-hedging is a secular penetration-driven growth opportunity in India, with MCX being a leader (-100% market share in key commodities). We think the high growth potential in ADV and thus revenues/earnings for MCX from introduction of options is not priced in. Traded ADV (Average Daily Value) increasing despite commodity prices correction, new products pipeline makes outlook positive

PVR Limited:

We believe PVR’s strong brand and the prime location of its properties are key competitive advantages. Though revenue/EBITDA may slow, we believe EPS growth may remain robust over FY16-19E, aided by maturing screens and operating leverage. We believe PVR is at an inflection point and could start generating free cash flow from FY16E, which will likely be sustained.

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Makemytrip:

Leader in India OTA market and a key beneficiary of travel industry growth, expanding capacity in Indian aviation, increasing online penetration and an improving economy. We expect mix change towards higher margins Hotels & Holiday Packages and operating leverage to drive earnings.

Voltas:

We like Voltas for its:

1) solid balance sheet;

2) high return ratios; and

3) nearly net cash profile.

Company looks set to maintain its market leadership, aided by new product launches. Premium valuation justified, in our view.

InfoEdge:

We see market’s concerns about Info Edge’s job portal growth sustainability as providing a good buying opportunity. Our analysis suggests limited downside to Info Edge’s growth from the IT sector slowdown, as more than 65% of hiring is for attrition and thus not at risk from slowing growth and falling employee intensity.

Dish TV (Analyst: Sanjena Dadawala):

We expect Dish TV to benefit from phases III and IV of digitisation and forecast 15% CAGR in subscription revenue and EBITDA over FY16-19E. We expect sustained high EBITDA margins of c34% to help Dish to turn net-cash-positive by FY18E.

UBS has stated that these mid-cap stocks are quoting at reasonable valuations presently and are a good buy. However, the target price for the stocks is not stated.




Comments (2)

  1. n k prasad

    is Makemytrip listed ???

    Reply
    1. michael (Post author)

      Make My Trip is listed on Nasdaq. UBS’ clients are FIIs and non-residents and so the advice may be directed to them.

      Reply

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