Select stocks including Bajaj Finance, Glenmark Life Sciences, Mahindra CIE Automotive, Anand Rathi Wealth, Muthoot Finance, Max Healthcare Institute, Surya Roshni and Ganesha Ecosphere saw a host of brokerage firms initiating coverage on them. Bajaj Finance has got a 'sell' tag by Investec, while Muthoot Finance has been rated as an 'add' by Equirus. The remaining other stocks have a 'buy' call with an upside potential of up to 36%. Here's what brokerage firms said on these counters:
Ventura Securities on Anand Rathi Wealth Rating: Buy | Target Price: Rs 1,125 | Upside Potential: 36% The mutual fund AUM is expected to scale to about Rs 41,000 crore by FY26, partly led by growth in new money and partly from the compounding of the existing AUM (10-12 per cent historical CAGR growth of the last 2 decades), said Ventura Securities while initiating coverage with a target price of Rs 1,125 in the next 24 months.
"Revenues to grow faster than the market at a CAGR of 21.2 per cent driven by mutual fund distribution income from AMCs at 23.7 per cent CAGR to Rs 360 crore, sale of market linked debentures at 19.3 per cent CAGR to Rs 523.75 crore technology-driven revenue streams, digital wealth (DW) and omni financial advisors (OFA) 4.4 per cent CAGR to Rs 5.7 crore," Ventura said.
HDFC Securities on Ganesha Ecosphere Rating: Buy | Target Price: Rs 1,010-1,088 | Upside Potential: 15-18%
Ganesha Ecosphere (GEL) has an experienced promoters and management team along with dominant position of the company in RPSF business with its presence in both fibre and yarn leading to integrated nature of operations. It also has an efficient raw material procurement system, established relationship with diversified customer profile and established product distribution networks resulting in increased penetration in the export market, said HDFC Securities.
"Considering the company’s strong financial profile, led by healthy profitability levels and return indicators, volume growth from the commissioning of new facilities and a comfortable capital structure, we have a positive view on the stock. Base case fair value of the stock is Rs 1,010 and the bull case fair value of the stock is Rs 1,088 over the next 2-3 quarters," it said.
Axis Securities on Mahindra CIE Automotive Rating: Buy | Target Price: Rs 475 | Upside Potential: 27% "We initiate coverage on Mahindra CIE Automotive price target of Rs 475 per share, implying an upside of 27 per cent. Considering the market capability to generate strong operating cash flows, we believe the stock is currently trading at a reasonable 1-year forward consensus PE multiple of 13x against its long-term average of 15x," said Axis Securities in its IC report.
It believes MCIE will continue to source capex funding from its robust internal operating cash flows. Its recommendation is based on improved share of business in India operations, improving the outlook of the PV business in Europe and hiving off of a lower-EBITDA margin trucking segment and Strong FCF Generations and negligible debt on the Balance Sheet.
Investec on Bajaj Finance Rating: Sell | Target Price: Rs 4,800 | Downside Risk: 18%
Bajaj Finance's execution over the past decade across growth, asset quality and profitability has been impeccable, said Investec in its maiden report on the stock with a 'sell' rating and a target price of Rs 4,800. It believes listing of its subsidiary Bajaj Housing and the possibility of a regulatory push to transition to a bank could spur a de-rating.
"However, we see challenges in the current decade due to its size is a constraint, competition picking up in unsecured credit, barriers to entry in unsecured shrinking, BAF’s super normal profits in the unsecured may not be sustainable and incremental capital allocation is happening in lower RoE segments," it said.Anand Rathi on Surya Roshni Rating: Buy | Target Price: Rs 860 | Upside Potential: 19%
Despite the Covid-19 pandemic, Surya Roshni's EBITDA margin remains intact at 7 per cent which depicts its operational efficiency and command over its pricing power. Surya is the largest GI pipe manufacturer in India and second largest player in Lighting with a robust track record, said Anand Rathi with a 'buy' rating and target price of Rs 860.
"We forecast its EPS to grow at CAGR of 27% over FY22-24E and ROE to improve to 15% in FY24. Going ahead, we expect the company to continue its strong growth trajectory with its Revenue, EBITDA and PAT growing at a CAGR of 10 per cent, 21 per cent and 35 per cent, respectively over FY22-24E with continuous improvement in margins and return ratios," it said.Kotak Institutional Equities on Glenmark Life Sciences Rating: Buy | Target Price: Rs 500 | Upside Potential: 24% Glenmark Life Sciences, a subsidiary of Glenmark Pharma, is a pure-play API company focusing on high-value APIs. It lies at the cross-section of API companies such as Divi’s, which have absolute dominance in their key products, and companies such as IOL Chemicals and Solara, which have a largely commoditized portfolio, with a selective edge. "The relative resilience of the business is captured in GLS’ outperformance over the past two years, which have been tough for the entire Indian API industry. Despite risks, after the steep 46 per cent correction since listing in August 2021, the valuation is undemanding, it said with initiating coverage on the with a 'buy' rating and a target price of Rs 500.Motilal Oswal Financial Services on Max Healthcare Institute Rating: Buy | Target Price: Rs 530 | Upside Potential: 10%
Motilal Oswal expects Max Healthcare to deliver 16 per cent and 17 per cent revenue and EBITDA CAGR over FY23-25 to Rs 7,700 crore and Rs 2,150 crore, respectively and an ROIC of 20 per cent in FY25 due to reducing share of institutional patients, higher international patients flow driven by a strong brand recall, and ongoing cost management measures.
The roadmap of more than doubling its operating beds over the next five years remains on track largely due to strong internal accruals. The inorganic initiative would also be another potential driver of earnings growth, given its strong turnaround capability. The demand factors for the hospital industry in India remain favorable aided by rising income, healthcare needs and higher health insurance penetration, it said in its maiden report with a buy call and target price of Rs 530.Equirus Securities on Muthoot Finance Rating: Add | Target Price: Rs 1,115 | Upside Potential: 9% Muthoot Finance, India’s largest gold financing NBFC, has seen a gold loan/gold tonnage CAGR of 14 per cent/3 per cent over FY17-9MFY23 to Rs 56,800 crore/1.75 lakh crore, said Equirus It believes Muthoot focuses the below Rs 2 lakh ticket size wherein feasibility/viability is a challenge for these players and is leveraging the unorganized-to-organized transition story. It cited solid brand recall, low attrition, best-in-class operating metrics, focus on processes/policies and transparency, proven management and healthy credit rating (ICRA AA+), and pan-India rural reach as its key positive in its maiden report on the stock with an 'Add' rating and a target price of Rs 1,125. "While the balancing act between spreads and loan growth would be tracked," it added.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)
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