Federal Bank, IKS Health, Baazar Style: 5 Jhunjhunwala stocks saw brokerage initiations; check price targets

Select stocks from Jhunjhuwala's portfolio has seen fresh interest from various brokerage firms recently, who have initiated coverage on these stocks. Domestic brokerage firms have cherry picked at least five stocks, which have a cumulative valuations of more than Rs 15,000 crore, comprising more than one fourth of Jhunjhunwala's Rs 54,600 crore equity empire.

A couple of these counters including Inventurus Knowledge Solutions Ltd (IKS Health) and Baazar Style Retail Ltd- made their stock market debut recently, while the likes of Federal Bank Ltd, Canara Bank and Va Tech Wabag Ltd drew analysts' interest after the sharp correction in these stocks.

Among these five names, Jhunjhuwala owns 49.3 per cent stake, or 8,46,68,326 equity shares in IKS Health, which is worth Rs 12,608 crore as of Tuesday. The healthcare solutions provider was listed at the bourses in December 2024, when the company raised about Rs 2,500 crore via IPO route.

IKS’ platform has 16 key features, spanning across chores in a physician’s value chain, bundled into admin offerings and clinical offerings, said ICICI Securities. With strong financial credentials, synergistic large acquisition (Aquity) and US healthcare industry-led tailwinds in its favour, the delta for IKS lies in the cross-selling-led potential arising from the 800 customers added via acquisition, it said.

We model FY25–28E revenue and EPS CAGRs of 20 per cent and 34 per cent . While we like IKS business for its superior financial performance, technology prowess and attractive large scale opportunity; valuations at 33 times FY27E P/E are rich. We recommend 'hold' with target price of Rs 1,820," ICICI Securities added.

IKS operates in a crowded healthcare provider space , it differentiates itself through extensive use of tech platforms and a non-linear revenue model, said JM Financial. Lower interest expense – as debt taken for AQuity acquisition is repaid – could drive 33 per cent EPS CAGR over FY24-27E, said the brokerage, which currently has a 'hold' tag for the stock and a target price of Rs 1,840.

Jhujhunwala owned more 12,86,93,000 equity shares of Canara Bank, which as of the latest is valued at Rs 1,080 crore. He also held 3,45,30,060 equity shares in Federal Bank as of December 30, 2024, valued over Rs 620 crore. Jhujhunwala held 1.42 per cent stake in both the lenders.

Federal Bank appears fairly cheap compared to its peer group with a similar growth trajectory. All round improvement in return and other financial ratios is likely over FY26e and FY27e, said Chola Securities. Management's strategy for PAN India expansion of branch network, technology led operating and business improvement, new product offerings with an aim of becoming a Universal bank augurs well, it added with an 'accumulate' rating and a target price of Rs 222 on the stock.

Canara Bank is a diversified lending bank and also operates through subsidiaries like Canara Robeco AMC, Canara HSBC Life Insurance Company, Can Fin Homes and others providing asset management, insurance and housing finance solutions respectively, said Ventura Securities. It initiated a 'buy' for a price target of Rs 143. "With its subsidiaries expected to get listed, significant value unlocking potential exists over and above our price target," Ventura added.

JM Financial expect Style Baazar to deliver revenue/Ebitda/PAT CAGR of 30 per cent/36 per cent/50 per cent over FY24-27E, respectively and RoE and ROIC to improve to 22 per cent and 19 per cent by FY27 led by improving profitability and reducing working capital days. The EPS in FY25 is expected to increase due to higher ROU depreciation and lease liability interest on aggressive store addition plans and buyout of 3 lease stores in FY24 leading to lease reversal, said its IC report on the stock.

Jhunjhunwala held 5,000,000 equity shares, or 8.04 per cent, stake in Va Tech Wabag, valued at Rs 682.5 crore as of Tuesday. The stake owned in recently listed Baazar Style Retail stood at 27,23,120 equity shares, or 3.65 per cent, worth Rs 66 crore. These stakes are as of data shares for Q3FY25.

"We believe, this is also one of the key reason for Style Baazar’s low valuations as reported numbers optically look weak but are strong on Pre Ind AS basis. We initiate coverage on Style Baazar with a BUY rating and a target price of Rs 400. Consistent execution, improving profitability and working capital days can lead to further re-rating of the stock," JM Financial added.

YES Securities initiated coverage on Va Tech Wabag with a 'buy' rating on the back of well positioned to capitalize on robust growth in India and Middle East, order book of Rs 14,300 crore provides revenue visibility for the next 3-4 years; margins to improve towards the top end of 13-15 per cent guide by FY27; successful turnaround in FCF generation with net cash position; and technological leadership with high bid-hit ratio. YES Securities has a target price of Rs 1,750 on the stock.