Ace Investors Portfolio Stocks :If you are looking for a stock with strong fundamentals for investment, then pay attention. Different brokerage houses are bullish on two stocks of Rakesh Jhunjhunwala’s choice and now included in his wife Rekha Jhunjhunwala’s portfolio. These include Metro Brands and Star Health Insurance. The brokerage house has advised investment in both these stocks. Both the stocks are trading at a good discount from their peaks and can yield further returns of up to 29 percent. Rekha Jhunjhunwala holds 9.6 percent stake in Metro Brands and 3.1 percent stake in Star Health Insurance.
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Metro Brands
Brokerage house Motilal Oswal has advised to invest in Metro brands. The brokerage house has given a target of Rs 1460 with Buy rating, which is 20 percent above the current price of Rs 1217. The brokerage says Metro Brands is trading at a rich valuation, trading at 70 times FY26 EPS. The main reasons for this are-
A) Superior store economics, industry leading store productivity and strong cost controls, and b)A long runway for growth given the strong balance sheet and healthy RoIC of 30%+, largely funded from internal accruals. Although the ramp-up of FILA and Foot Locker has been delayed due to challenges arising from the implementation of BIS, FILA and Foot Locker are key growth drivers for the company in the mid-term.
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According to the brokerage, our earnings estimates for the company remain largely unchanged. We estimate 14% revenue CAGR over FY24-27, driven by 12% footprint CAGR and 17%, 20% EBITDA and PAT CAGR over FY24-27. It continues to be supported by strong cast control. It is at a good discount from its 1 year high of Rs 1430. Due to which this stock has remained almost flat in the last one year and has increased by only 3 percent.
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Star Health Insurance
Brokerage house Yes Securities has advised to invest in Star Health. The brokerage house has given a target of Rs 625 with Buy rating, which is 29 percent above the current price of Rs 486. The brokerage has listed four major reasons behind this. It is at a good discount from its 1 year high of Rs 647. Due to which this stock has weakened by about 11 percent in the last one year.
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(1) While the loss ratio is currently increasing, it will be reduced through several factors, including a self-correcting business model.
(2) Star Health operates a judicially structured business strategy that leads to better, differentiated outcomes.
(3) Star Health will continue to benefit from a unique physical distribution network that cannot be easily replicated by competitors.
(4) Star Health has demonstrated strong expense control and has the lowest expense ratio among standalone health insurance companies.
(Disclaimer: The advice to invest or sell stocks has been given by the brokerage house. These are not the personal views of Financial Express. There are risks in the market, so take expert opinion before investing.)
