A couple of brokerages have come out with updates on stocks such as Jindal Steel & Power Ltd, ICICI Prudential Life Insurance Company Ltd, Cyient Ltd and National Aluminium Company Ltd (Nalco). Among them, the first three are rated 'Buy'. Nalco, on the other hand, has seen an upgrade in rating, given its attractive risk reward.
Jindal Steel & Power Ltd | MOFSL: Buy | Target price: Rs 1,200 MOFSL said Jindal Steel's ongoing capacity expansion at Angul (Odisha) will boost the crude steel capacity by 65 per cent to 15.9 mtpa and finished steel capacity by 83 per cent to 13.75 mtpa. It is expected to complete by Q1FY27. JSPL is also undertaking cost-effective measures to expand the operating margin through the strengthening of raw material integration, increase in the captive power plant share and higher flat steel mix to 55 per cent. Besides, it is focusing on VAP, whose prevailing share stands at 67 per cent.
"The company deleveraged its B/S from the net debt of Rs 39,100 crore in FY19 to Rs 10,400 crore as of 1QFY25, translating into 1x the net debt/Ebitda. The company targets to maintain it below 1.5x, considering the ongoing capex. The robust steel demand and increased capacity place JSP in a strong position. At CMP, the stock trades at 6.2x EV/Ebitda on FY26 estimate. We reiterate our BUY rating on JSPL with a target price of Rs 1,200, based on 7x FY26E EV/Ebitda," MOFSL said.
Nalco| Kotak Institutional: Add | Target price Kotak Institutional Equities said Nalco is best placed to benefit from the ongoing supply tightness in the alumina market, given its net long position and the consequent tailwind in the aluminum prices. Commissioning of captive coal mines has helped reduce costs in FY2024 and a further ramp-up should keep costs on a downtrend, it said.
"The 1 mtpa alumina refinery expansion is progressing at a slow place and we estimate volume contribution from 2HFY27E. We upgrade alumina/aluminum price forecast and earnings for Nalco. Our FV increases to Rs 235 per share (from Rs 160). Upgrade to ADD (from SELL), given attractive risk-reward," it said.
ICICI Prudential Life | Sharekhan: Buy | Target: Rs 920
Sharekhan said higher APE growth from agency it direct channel is leading to market share gains and drive strong APE growth (higher than industry) for ICICI Prudential for the third consecutive quarter, albeit on a low base. The management expects to continue to grow APE ahead of the industry, as it has made considerable efforts to improve its multi-channel and multi-product approach to optimise growth.
"A lower share of non-par reduces the impact of revised surrender penalty guidelines on VNB margins. VNB growth would largely be a function of product mix, thus VNB margin would remain range bound. We maintain BUY with a revised target price of Rs 920, considering the increase in the multiple, given healthy growth outlook and rollover. The stock trades at 2.3x/2.0x/1.8x its FY25/FY26/FY27 EVPS," it said.
Cyient | Kotak Institutional: Buy | Target price: Rs 2,050
Kotak hosted Cyient’s management— Executive Vice Chairman and MD Krishna Bodanapu, CFO Prabhakar Atla, Head of Strategy Ramya Mohan and Delivery Head of Semiconductor Satish Kumar Ganesan to gather more details about the IT firm's semiconductor initiatives. The key highlights are the ASIC market is expected to see 10-12 per cent CAGR over 2023-31, 3 times of general purpose chips, driven by IT-OT integration. Cyient, Kotak said, is expanding its play across the ASIC development value chain, leveraging its IP and ecosystem partnerships in focus verticals. Cyient (DET) would continue to focus on engineering services while Cyient Semiconductor would operate independently, reporting to Krishna, Kotak said.
Turnkey engagements include design and production phases. The design phase would be a 2-3 year cycle, with revenues recognized on the basis of the achievement of milestones. In the production phase, revenues are recognized on the basis of unit sales. Cyient plans to leverage its IP suite to accelerate development. A few engagements might also include royalty-based payments depending on the usage of IP, Kotak said.
For now, the brokerage has 'Buy' rating and a fair value of Rs 2,050 for the stock.