Overseas brokerage firm Jefferies has initiated coverage on as many as three companies including Waaree Energies, Sai Life Science and Patanjali Foods. Out of them, the former two made their stock market debut in the last six months and the brokerage has a hold rating on them, while the last one has seen a 'buy' initiation from the global broker. Here's what Jefferies said about these three stocks:
Sai Life Science | Rating: Hold
According to Jefferies, Sai Life Sciences Ltd is an innovator-focused integrated CDMO, its integrated model and healthy track record differentiates it from peers. Favourable industry dynamics, healthy molecule pipeline (3 potential blockbuster) and adequate capacities should drive revenue and Ebitda CAGR of 15 per cent and 29 per cent over FY25-27E, respectively.
"We value Sai at 27 times FY27 pre-Ind AS Ev-Ebitda, which is at a 20% premium to its nearest peer Syngene to arrive at a Rs 720 target price. We believe Sai deserves premium valuation over Syngene due to superior growth profile and return ratios. While the outlook for Sai is strong, its valuations are punchy (trades at 30 per cent premium to the sector) and thus leaves limited upside potential," Jefferies added.
Patanjali Foods | Rating: Buy
Jefferies said that Patanjali Foods Ltd has evolved into a diversified consumer franchise, scaling up organically and via acquisition of margin-accretive portfolios from parent at attractive valuation. Higher-margin Foods & HPC is now 60 per cent of Ebitda and about 70 per cent of SoTP value.
With focus on distribution, premiumisation and brand building, Patanjali is well-placed to expand its Foods & HPC franchise and become a more diversified FMCG play. We value PFL on SoTP basis, ascribing 20 times PE to edible oil and 40-45 times to foods and HPC. This implies a 37 times PE multiple on consolidated FY27e EPS. Initiate with a 'buy' and Rs 2,050 target price, the brokerage added.
Waaree Energies | Rating: Hold
Jefferies has valued Waaree Energies Ltd, a renewable power play, at 15 times FY30 EBITDA, wherein it builds sustainable margins (16 per cent) and discounts it back to 1-year forward earnings. India’s solar installations are set to grow at 24 per cent CAG over FY24-30. Govt policy favouring domestic modules and US policy shunning Chinese modules have created attractive economics for Waaree, it said.
It expects profitability to normalize starting FY28E. Demand, policy changes are key risks. Stronger domestic solar installations is a key upside trigger. Relaxation of DCR rules in India, removal of IRA benefits in the US and/or reduction in duties on Chinese modules are key downside risks," it added initiating coverage with a 'hold' rating on Waaree and a price target of Rs 2,030.