Inox Wind, CESC, Trent, Jubilant FoodWorks: Nuvama shares target prices for these 4 stocks
Four companies including Inox Wind Ltd, CESC Ltd, Trent Ltd and Jubilant FoodWorks Ltd have recently announced their June quarter results. Nuvama has maintained 'Buy' rating on two of these stocks, gave 'Hold' recommendation on Jubilant FoodWorks and 'Reduce' rating on CESC. For Inox Wind and Trent, it sees 14-15 per cent potential gains. For CESC and Jubilant FoodWorks, Nuvama sees up to 12 per cent downside ahead.
Inox Wind | Target price: Rs 201 | Potential upside: 15% Nuvama said Inox Wind reported strong Q1FY25 results with operating margin at 21.3 per cent against the brokerage's estimate of 15 per cent, as sales mix was heavier on WTG supply while EPC costs will get booked in the future.
Nuvama said PAT for Inox Wind beat its estimate by 35 per cent. Inox Wind executed 140MW which was in line with its estimates. The full-year margins, it said, are likely to normalise at 16–17 per cent.
"Inox is one of the two wind-EPC suppliers in India, riding tailwinds of RTC + FDRE + C&I demand. We are tweaking FY25–27E, raising margins and lowering realisation/MW, yielding a target price of Rs 201 (15 per cent upside potential) at 30 times FY27E WTG EPS + DCF of O&M; reiterate ‘BUY’," Nuvama said.
Trent | Target price: Rs 7,136 | Upside potential: 14% Nuvama said Trent saw yet another industry-beating performance in Q1, clocking double-digit same-store sales growth (SSSG) in its fashion portfolio along with 35 per cent retail area addition, Trent delivered on its guidance of expanding the Star footprint.
The Star portfolio clocked 22 per cent SSSG. Given the store size requirement of 18-20ksqft for Star Market and Trent’s ability to iterate fast, Nuvama believes Star warrants a much higher multiple. It introduced a DCF-based value of Star Bazaar, taking inspiration from Zudio’s rapid scale-up.
"We are tweaking FY25E/26E revenue by 6.7 per cent/20.5 per cent and PAT by 31.1 per cent/44.2 per cent, yielding a revised target price of Rs 7,136 (upside potential of 14 per cent; earlier TP: Rs 5,365) at implied P/E of 80 times FY26E, including 49 per cent share of Inditex and 50 per cent stake in Star," it said.
CESC | Target price: Rs 154 | potential downside 12% CESC reported in-line Q1FY25 profit growth of 5 per cent YoY, aided by higher regulatory deferral, Nuvama said. While profitability improved in generation entities (30 per cent YoY), Malegaon losses widened 27 per cent YoY and Rajasthan franchise’s profit dipped 65 per cent YoY, Nuvama said.
CESC shares have rallied two times since November 2023 on 3.25GW RE capex plans and 10,500t of green hydrogen plans (PPA pending for both).
"However, we find 4 per cent downside to our bull case while our base case (2GW RE + recovery of Rs 2400 crore RA over six years) implies 12 per cent downside potential. Maintain ‘REDUCE’ with a base-case target price of Rs 154 (earlier Rs 121) based on a rollover to FY27E and a marginally tweak to FY25E/26E on account of higher PLF-led profitability; ‘REDUCE’," Nuvama said.
Jubilant FoodWorks | Target price: Rs 568 | Potential downside: 5% Jubilant FoodWorks reported positive like-for-like Q1FY25 growth, driven by the delivery channel. Dine-in continued to contract. Nuvama said there is a sequential improvement in the business with Domino’s launching new value meals, not to mention product innovations to remove brand fatigue. The group entity reported 45 per cent uptick driven by DP Eurasia consolidation, which is PAT-accretive with margins stronger than the standalone entity.
"We are consolidating DP Eurasia in our estimates and, hence, raising FY25E/26E revenue by 30.8 per cent/35.4 per cent and PAT by 0.3 per cent/19.2 per cent. Rolling over the valuation to Q1FY27 and valuing the business at 45 times PE yield a revised target price of Rs 568 (earlier Rs 487); maintain ‘HOLD’," Nuvama said.