Bank of Baroda | Rating: Buy | Target Price: Rs 300 | Upside Potential: 30% Bank of Baroda (BoB) is one of the better placed PSBs (after SBI) with a loan book of Rs 10.26 lakh crore (4th largest bank in India after SBI, HDFC and ICICI). Stress recognition in the banking industry was the maximum during the period 2016-21; during this period BOB’s slippages averaged at 4.3 per cent compared to 5.3 per cent for PSBs. Asset quality has consistently improved with NNPA declining to 0.76 per cent on asset quality. The impact of restriction by RBI for onboarding of new clients on the ‘BoB World’ app has been minimal as the portion of new account opening through the app was low. The issue is likely to be resolved soon. Growth in total advances is expected to be at 15 per cent. Although credit costs have bottomed out, we expect FY25E RoA/RoE to increase backed by stabilisation of NIM, higher growth in fee income and moderation in opex.Dollar Industries | Rating: Buy | Target Price: Rs 300 | Upside Potential: 20% Dollar Industries is a leading player in the branded innerwear category with over 2000 products across all segments. The company holds 15 per cent market share in the Indian hosiery space. Currently, It is strong in North, East and West together contributing 92 per cent of the total business of the company. Southern India contributes 8 per cent of the business and is the key target market for growth. It is in the process of implementing Project Lakshya under which the company is revamping its distribution network and working towards transition from push approach to pull approach. The number of distributors under project Lakshya has increased from 142 in FY22 to 271 by end of Q2FY24. Project Lakshya will help improve direct engagement with retailers and increase market penetration, Increase primary sales and will help in efficient product planning and inventory management. Number of DFS dealers stood at 309 & EBOS 18 at the end of Q2FY24. The company plans to increase EBOS to 125 by 2026. A long term, Management guides revenue to grow to 2000 cr by FY26. High Margin Product contribution to increase to 33 per cent by FY26. Higher sales growth, lower raw material price with high margin product contribution will lead to improvement in margins. Management expects debtor days to improve to 70 to 75 days due to the Lakshya project and the dealer financing scheme that they are running. RoE of the company stood at 7 per cent in FY23 which is expected to improve going ahead. The stock is trading at a PE of 16.7 times FY 25E EPS which we feel is attractive.Sai Silks (Kalamandir) | Rating: Buy | Target Price: Rs 344 | Upside Potential: 25% Sai Silk , with presence majorly in Southern states including Andhra Pradesh, Telangana, Karnataka, and Tamil Nadu. Through its 4 store formats- Kalamandir, VaraMahalakshmi Silks, Mandir and KLM Fashion Mall- offers various products including premium ethnic fashion, ethnic fashion for middle income and value-fashion and other fashion products suitable for weddings, parties and daily wear. As of September 2023, the company has a store network of 54 stores, and its customer base exceeded over 5.98 million. The company being amongst the top 10 retailers of ethnic apparel, particularly sarees, in south India in terms of revenues and profit and Saree contributing 68.4% to FY23 revenue. With presence in South India, Sai Silk intends its deepen its penetration in those areas, by opening 30 additional stores over 2 years for which the company will utilize Rs 125 crore of IPO net proceeds And also propose to open 5 additional stores in the franchise model. With growth and margins coming back , we feel stock is available at attractive valuation and is trading at EV/EBITDA of 12.6 times FY25E Ebitda. We recommend a Buy on the stock with a target price of Rs 344.SAMHI Hotels | Rating: Buy | Target Price: Rs 257 | Upside Potential: 54% SAMHI Hotels is a branded hotel ownership and asset management platform. SAMHI Hotels has a portfolio of 4,801 keys across 31 operating hotels in 14 cities. It operates under well-recognized hotel operators such as Courtyard by Marriott, Hyatt Place, Sheraton, Hyatt Regency, Renaissance, Fairfield by Marriott, Holiday Inn Express. The company operates in upper upscale, upscale, upper middle, and middle scale categories of hotels and not present in luxury hotels. SAMHI mainly focuses on business Hotels. Its inventory is generally used by retail 47 per cent, corporate 34 per cent, group and conferences 13 per cent and airlines – 4 per cent. Before its recent IPO, SAMHI acquired 6 hotels with 962 keys with share swap deal and issued 3.75 crore shares. It acquired 3 hotels in Fairfield by Marriott and 3 hotels in Four Points by Sheraton. We are positive on the company's long term performance with substantial debt reduction and its ability to generate positive cash flow from FY25. We assign EV/EBITDA multiple of 18 times to FY25 EBITDA to arrive at a target of Rs 257.Venus Pipes & Tubes | Rating: Buy | Target Price: Rs 1,920 | Upside Potential: 37% Venus is the only pure-play listed player focused on the high value stainless steel pipe industry. Stainless steel pipes are used in critical, high pressure & temperature applications like pressure vessels, heat exchangers, condensers and others. It has industry exposure as 50 per cent in cap-goods, 33 per cent in chemicals, 17 per cent in other industries. Thus ASP of stainless steel pipes is Rs 4 lakh per ton, while carbon steel is Rs 70,000 per ton. Industry has tailwinds like BIS certification, China discontinued export incentive, anti dumping duty. Venus offers strong growth visibility with sales and PAT CAGR of 49 per cent and 68 per cent over FY23–25E, driven by capacity expansion of 3 times to 38,000 tons by FY25E plus operating leverage; backward integration into manufacture of hollow pipes; sales through stockists which is 30 per cent mix today is expected to dip in favor of direct sales; entry in larger diameter pipes. We assign a target price of Rs 1,920, valuing the company at 27 times Sep 2025E.
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