Select stocks including Archean Chemical Industries, Poly Medicure, Varun Beverages, Mankind Pharma, Vinati Organics, Rossari Biotech, R Systems International, MTAR Technologies and Bikaji Foods International have seen fresh interest from the various brokerage firms, who have recently initiated or re-initiated their coverage on these companies.
The host of domestic brokerages including Monarch Networth Capital, B&K Securities, Bonanza Portfolio, Anand Rathi, Motilal Oswal Financial Services and InCred Equities. All the other stocks have 'buy' ratings on them with an upside potential of up to 42 per cent each. Here's what brokerage said on these stocks:
Anand Rathi Investment Services on Bikaji Foods International
Rating: Buy | Target Price: Rs 900 | Upside Potential: 24%
Bikaji retails over 300 products across six key categories – bhujia, namkeen, sweets, papad, Western snacks, and other snacks including gift packs (assortment), frozen food, mathri range and cookies. The company is currently the third-largest ethnic snacks company in India and is among the fastest growing companies in its segment, said Anand Rathi Investment Services.
"Bikaji delivered healthy volume growth, margin expansion on the back of capacity expansion and operating efficiency. Bikaji with its strong portfolio, established distribution network backed by preferred brands are well placed to report profitability. We believe that company’s revenue, ebitda and PAT is expected to grow at a CAGR of 20 per cent, 24 per cent and 25 per cent, respectively over FY24-26E," initiating coverage with a 'buy' and a target price of Rs 900.
InCred Equities on MTAR Technologies
Rating: Buy | Target Price: Rs 2,644 | Upside Potential: 42%
MTAR Technologies is a precision machining company with exposure across niche sectors like fuel cells for Bloom Energy, nuclear, defence and space. The rising power costs in the US due to grid problems, coupled with rising cost competitiveness of Bloom Energy, will result in significant tailwinds for MTAR, said InCred in its IC report.
"We expect MTAR to register an 80 per cent PAT CAGR over FY24-26F and value the stock at 45 times FY26F EPS of Rs 59 to arrive at a target price of Rs 2,64," it added. However, the brokerage sees exposure to a single client (Bloom Energy) for almost 60 per cent of its revenue as the key downside risk.
Monarch Networth Capital on R Systems International
Rating: Buy | Target Price: Rs 555 | Upside Potential: 9%
With a rich history of over three decades in product engineering, R Systems has evolved into a prominent player with strong partnerships with Microsoft, AWS & Google. Its advanced capabilities in Cloud, AI, and Automation highlight its innovative edge. The new promoter, Blackstone group, adds great heft to the company, said Monarch Networth Capital.
"With Nitesh Bansal at the helm as CEO, the company is poised to take a gigantic leap. We believe R Systems is a credible play on the likely revival of global IT spends over CY25-26 and accelerating shift to cloud and AI adoption across industries, strengthening trend despite an overall funding winter. We initiate coverage with a buy and target price of Rs 555," it said.
Anand Rathi Shares & Stock Brokers on Rossari Biotech
Rating: Buy | Target Price: Rs 950 | Upside Potential: 24%
Rossari Biotech is a leading specialty chemicals manufacturing company, focusing on four core chemistries of enzymes, silicones, acrylics and surfactants. It caters to industries such as home and personal care, and performance chemicals (HPPC), textile specialty chemicals (TSC) and animal health and nutrition (AHN) products, said Anand Rathi Shares & Stock Brokers.
It is likely to deliver 17 per cent, 20 per cent and 24 per cent revenue, Ebitda and PAT CAGRs due to swelling demand over FY 24-26, respectively. capacity expansion and mounting exports. The stock has traded at an average P/E of 45 times in the last four years and 32 times FY24 earnings. We see a consistently better performance aided by the capacity expansion, product launches and better margins, it said with a 'buy' rating a target price of Rs 950 on the stock.
B&K Securities on Vinati Organics
Rating: Buy | Target Price: Rs 2,147 | Upside Potential: 16%
Vinati Organics is a distinguished specialty chemicals company, meticulously selects products poised for scalability through cost leadership strategies. It is one of the few companies to have navigated through the destocking cycle faster than its peers and eyes 25-30 per cent volume growth in FY25E, said B&K Securities.
"Vinati's peers are trading at premium due to focused market leadership, healthy return ratios and sustainable growth. Valuing the company at 40 times FY26E earnings, we reflect on its strong market position and growth potential. We ascribe a 'buy' rating with a 40 times p/e target multiple to our FY26E EPS of Rs 53.7 per share and a target price of Rs 2,147," it said.
Motilal Oswal Financial Services on Mankind Pharma
Rating: Buy | Target Price: Rs 2,650 | Upside Potential: 18%
Mankind Pharma has built a robust domestic formulation franchise and become the fourth largest player by market share. Contrary to common wisdom, Mankind has followed a disruptive strategy to establish its DF business by approaching customers and influencers in tier II and below cities, becoming the industry leader in terms of the number of prescriptions, said Motilal Oswal.
"Mankind is working on multiple levers to boost growth over the next three to five years, increasing the scope of business in chronic therapies by expanding niche products in portfolio, enhancing its presence in metro/Tier-I cities, and investing in brand building in the prescription and consumer healthcare segments," it said with a 'buy' rating a target price of Rs 2,650.
Anand Rathi Investment Services on Varun Beverages
Rating: Buy | Target Price: Rs 1,900 | Upside Potential: 16%
Varun Beverages is a significant entity in the beverage sector and one of the largest franchisees of PepsiCo globally. The company produces, distributes, and markets an extensive range of carbonated soft drinks and a broad selection of non carbonated beverages (NCBs), including packaged drinking water under PepsiCo's trademarks, said Anand Rathi Investment Services.
"It is set to see a strong growth on the back of such as strategic investment in enhancing production capabilities and making new acquisitions which have strengthened their global presence, successful completion of the strategic acquisition marking their entry in African region, increasing its presence in the domestic market and looking for exports opportunities, strong heatwaves prevailing across India during the summer quarters," it added re-initiating coverage with buy rating a target price of Rs 1,900.
Bonanza Portfolio on Poly Medicure
Rating: Buy | Target Price: Rs 2,100 | Upside Potential: 10%
Poly Medicure is one of the largest players in the medical devices space in India. The company has built a large manufacturing footprint and is backed by GoI’s ‘Make in India’ aspiration. Very few indigenous medical device players can match its capabilities. The company may deliver 20 per cent and 24 per cent revenue and ebitda CAGRs over FY24-27E, said Bonanza Portfolio.
"The company is diversifying itself with entry into the high entry barrier segments – renal and diagnostic consumables. It is also constantly expanding its product portfolio in the core segment – infusion therapy & vascular access – that differentiates it from other peers. We initiate coverage on Poly Medicure, with a buy rating with a target price of Rs 2,100," it said.
B&K Securities on Archean Chemical Industries
Rating: Buy | Target Price: Rs 864 | Upside Potential: 29%
Archean Chemical is a manufacturer of Elemental Bromine in India enjoys significant advantages of its proximity in the Rann of Kutch. Bromine, as an element, can be classified as a marine commodity chemical. Bromine extraction is fraught with challenges due to its low natural abundance and intricate processes required for extraction, rendering the emergence of new suppliers a hurdle, said B&K Securities.
"We thus ascribe Bromine as a commodity that is not accessible to everyone and presents a natural entry barrier owing to its discrete availability. ACIL can generate superlative free cash flows even while considering the bottom of Bromine’s realisations. Entry into Bromine derivatives provides value addition which can improve existing return ratios," it added with a target price of Rs 864 with a 'buy' call.
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