Brokerages initiate coverage on these 10 stocks, see up to 72% upside

Kalyan is embarking on an aggressive expansion plan in the rest of India where higher margins are on offer, by building both its own stores and through a franchise model. This plan could transform Kalyan and pave the way for 10-15 per cent long-term annual revenue growth, and unlock operating leverage. This will lift PE multiple and propell higher valuations.

“We believe consistent execution will continue to drive a further multiple expansion and lead to compounding returns over the next three years. We initiate a buy with a target price of Rs 125, and present bull and bear case scenarios,” it said.

Agencies

Angel’s client acquisition rate has been very strong over the last couple of years. Angel one has been investing in enhancing its digital capabilities. However, its client activation rate is slightly lower than the industry average but the ARPU is reasonable. Over the last 2 years, it has seen more than 100 per cent CAGR in gross client base and number of orders executed.

It will not be absolutely correct to say that market downturns have no impact on Angel’s business, we feel that the impact is much lower than what we sometimes anticipate. “We expect strong operating leverage to continue with cost of acquisition to be steadily improving,”it said, initiating coverage on Angel One with an ‘outperform’ and a target price of Rs 2,130.

Agencies

“We conducted an exhaustive analysis of the Indian Life Insurance sector that includes a detailed comparison of 7 key life insurers and a careful examination of the industry’s macro-level aspects. Based on our analysis, we initiate coverage on Life Insurance Corporation (LIC) with a buy rating and a target price of Rs 850,” it said.

Explaining its rationale, it said that LIC has nurtured an agency force whose productivity is far higher than that for private sector peers. LIC has assembled the largest bancassurance network in the industry. Focus hitherto on Par business led to several business model advantages for LIC and it has a sticky customer profile reflected in superior persistence.

FSN E-Commerce Ventures’ omni channel play, Nykaa, is set to grow its beauty and personal care (BPC) revenue at a higher 32.4 per cent clip in CY20- 25E even as India’s online BPC market likely posts a lower 17.3 per cent CAGR, in the same period. Nykaa may maintain its dominance with a 26.8 per cent market share in online BPC, led by a high repeat customers base.

Fashion is also an emerging segment for Nykaa, with a 3.3 per cent market share in the online fashion space.Nykaa’s revenue CAGR may be 60.4 per cent in FY23E-25E, on a smaller base. India’s online penetration is lower for online BPC and fashion, versus global counterparts. Thus, the scope for India to move to online shopping is immense, it initiated coverage with a buy with a target price of Rs 2,211.

ETtech

It specializes in providing solutions for Smart Grid. SEIL’s solutions are used by electrical distribution (utilities) and power generation companies along with the electro-intensive industry. SEIL is poised to perform well given the government’s power sector reforms along with initiatives like grid modernization and investments in sustainable energy (renewables).

Company’s strong presence in infrastructure, power, building, industry and IT segments, coupled with its ability to offer services cutting across these segments, provides a distinctive advantage and strong order book provides healthy revenue visibility going forward, it said while kicking off the coverage on the stock with a target price of Rs 236.

Reuters

Rolex Rings clocked revenue and PAT growth led by repayment of high cost debt and improved capacity utilisation. With an experienced management team at its helm, we estimate the company to clock strong revenue and EPS CAGR given strong order book visibility, and reduction in cost structure due to addition of solar energy assets (16MW) and repayment of CDR debt, it said in its initiating report with a target price of Rs 2,500.

Its core strengths are customer conversions through its superior/flexible manufacturing setup, in-house designing of tools, and locational advantage, ability to capture higher wallet share through strong client relationships as seven out of its top 10 customers are more than a decade old, and transition to new tech products such as gen-3 bearing rings, EV platform products.

Agencies

With the world poised for a shift towards Electric Vehicles (EV), KPIT has set itself in a strong position for the coming years. It has forecasted a revenue growth of 19.5 per cent CAGR until FY24E where we expect revenue at Rs 3,534.2 crore, EBITDA at Rs 807.6 crore at an EBITDA margin of 22.9 per cent, and adjusted PAT of Rs 490.9 crore.

“Given the strong revenue and earnings outlook, we estimate FY24E EPS at Rs. 17.9, and assign a PE multiple of 44x to arrive at a target price of Rs 788. We initiate coverage on KPIT Technologies with a buy rating, over an investment horizon of 18-24 months,” said the brokerage.

Agencies

We initiate on Greenpanel Industries with a buy rating having a target price of Rs 533 because of its market leadership in the MDF industry which is set to grow at a CAGR of 15 to 20% over the next few years. Greenpanel MDF is the market leader in India with a share of 28 per cent and is also the leading exporter of MDF panels from India.

The company undertook a debottleneck activity in FY22 and increased its capacity to 6,60,000 CBM in MDF. To further aid the growth, the company announced a brownfield expansion of its MDF capacity by 35 per cent at a capex of Rs 600 crores which will go into commercial production in H1FY25 having a potential revenue of Rs 770 crore.

Agencies

Mahindra Group’s Mahindra Lifespace Developers is one of the leading residential developers with a strong presence in Mumbai and Pune. It is gradually expanding its footprint in Bengaluru. The company also operates the integrated city and industrial cluster (IC&IC) segment in which it monetises the land bank by providing plug and play industrial infrastructure for manufacturing units.

“We are confident of the company’s ability to add projects in the future, given its strong visibility and recent success, and robust cash flow potential from both the residential and IC&IC businesses,” it said, initiating coverage with a buy rating and a target price of Rs 550 on the stock.

Agencies

It is one of the leading transformer players in the industry. The company has two business segments: power systems and industrial systems. The company has a robust financial profile with negligible debt and strong cash flows. The likely increase in capex and supportive Government schemes such as DDUGJY and UDAY may benefit the long term growth in the power sector.

“The company has an equity investment of Rs.644 cr and ICDs of Rs 245 crore as on 31 March, 2022. We believe the investments and ICDs have been present since more than a decade and the management may not liquidate. Going forward, we expect the company to deliver an EPS of Rs 116.6 in FY24,” it said with a target of Rs 2,652 and buy rating on the stock.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)

IANS