Brokerage YES Securities released its report on select stocks on Tuesday and downgraded Dixon Technologies Ltd shares to 'Sell' after the December 2024 quarter (Q3 FY25) results, citing an unfavourable risk-reward ratio. "Positives price in: Dixon will continue to deliver strong growth in the medium term as it has been able to add new customers on consistent basis; new product category like refrigerator has seen strong performance and management is looking to expand capacity and make further investments in frost-free refrigerators; IT hardware like laptops and tablets will be next growth driver as company has already started trial production of laptops for large global brands. The company is confident of significant revenue from telecom vertical current fiscal as order-book is extremely healthy; and investing in backward integration to improve efficiency. On the margin front, company is looking to improve its margin by increasing scale, backward integration," it stated.
"We continue to value the company at 55x FY27 EPS as on strong growth continuing for next couple of years. We however downgrade the stock to SELL with a revised price target of Rs 15,138 as risk reward is not favorable," the domestic broking firm added.
In contrast, YES Sec suggested to 'Buy' APL Apollo Tubes Ltd, Can Fin Homes Ltd and Karur Vysya Bank Ltd. "APL Apollo recorded stellar performance amidst the ongoing challenging environment. We expect APL to deliver a volume CAGR of ~19 per cent over FY24-FY27E, with improvement in macro environment, shift in demand towards primary steel, and ramp-up of Dubai & Raipur operations. We have revised our EPS estimates upwards by 10 per cent/6 per cent/6 per cent for FY25E/FY26E/FY27E respectively. At CMP, the stock trades at P/E(x) of 32x on FY27E revised EPS of Rs 49.6. We continue to value APL Apollo Tubes at P/E(x) of 40x on FY27E EPS. Hence, we retain our BUY rating on the stock with target price of Rs 1,984," it said.
The brokerage gave a 'Buy' recommendation on Can Fin shares despite an 'underwhelming' quarter. "We have cut FY26/27 earnings estimates by 7-10 per cent on moderating our growth assumptions and tweaking the opex and credit cost. Our loan growth estimate of 12-13 per cent p.a. for the next two years is meaningfully below management’s expectations, and we would eagerly await sustained recovery in disbursements volumes for raising our view. Even on the asset quality front, a durable reduction in the delinquent pool would offer comfort. Stock trades at 9.8x P/E and 1.4x P/BV on FY27 revised estimates and investor’s moderated growth and RoE expectations would keep valuation under check. While we retain BUY recommendation, the 12m PT has been cut to Rs 870," it stated.
For Karur Vysya, it said the lender recorded a reasonably steady outcome. "Asset Quality – Gross slippages decline materially on sequential basis, indicative of sound underlying asset quality. Net Interest Margin – NIM declined on sequential basis as cost of deposits continued to rise. Balance sheet growth – Loan growth outcome and outlook remained broadly stable. We maintain 'Buy' rating on KVB with an unchanged price target of Rs 270," YES Sec mentioned.
Separately, the brokerage assigned 'Add' calls for Paytm and Supreme Industries and maintained a 'Neutral' stance on Mangalore Refinery & Petrochemicals Ltd (MRPL).