Jio Financial, Cello World, Utkarsh SFB among 5 stocks that saw brokerage initiations with up to 31% potential upside

Select stocks including Utkarsh Small Finance Bank, Jio Financial Services, Happiest Mind Technologies, Cello World and Macrotech Developers have seen fresh interest from the various domestic and global brokerage firms, who have recently initiated their coverage on these companies.

The host of brokerages including ICICI Securities, KR Choksey, Axis Securities, JM Financial and B&K Securities have launched their maiden reports on these stocks. All of these stocks have 'buy' ratings on them with an upside potential of up to 31 per cent. Here's why these analysts are positive on them:

KR Choksey on Jio Financial Services
Rating: Buy | Target Price: Rs 290 | Upside Potential: 24%
Jio Financial Services is an important non-deposit-taking Non-Banking Financial Company registered with the Reserve Bank of India. It is a holding company and will operate its financial services business through its consumer-facing subsidiaries namely Jio Finance (JFL), Jio Insurance Broking (JIBL), and Jio Payment Solutions (JPSL) and joint venture Jio Payments Bank (JPBL), said KR Choksey.

The NBFC had reported a net profit of Rs 31.3 crore as of FY23. Jio Financial comprehensive suite of products is aimed towards meeting the diverse financial needs of customers with an ability to leapfrog traditional legacy systems and leverage the new age cloud-based solutions, it added initiating coverage with a 'buy' rating and target price of Rs 290 per share.

ICICI Securities on Utkarsh Small Finance Bank
Rating: Buy | Target Price: Rs 70 | Upside Potential: 31%
ICICI Securities initiated on Utkarsh Small Finance Bank with 'buy' and a target price of Rs 70, valuing at 2x FY25E BVPS. "We see Utkarsh’s deep presence in under-penetrated states, enhanced product offering, proven track record of managing asset quality better than peers and its rapidly evolving liability franchise ensuring sustainability of over 18 per cent RoE and over 25 per cent growth over FY24-26E," it said.

Utkarsh kicked off its lending journey in the states of UP and Bihar – collectively, the region is perceived to be the toughest lending market in India. Hence, since inception, it has embarked on a calibrated growth journey emphasising on risk management and portfolio quality, ICICI Securities added.

JM Financial on Cello World
Rating: Buy | Target Price: Rs 950 | Upside Potential: 16%
Cello World, promoted by the Rathod family, has a wide-ranging consumer facing category presence – consumerware (66 per cent of FY23 revenue), plastic moulded furniture (18 per cent) and writing instruments (16 per cent). The company also has one the best distribution networks across verticals, said JM Financial.

"It has posted best-in-class revenue growth, operating margins and return profile among its peers in every category in FY21-23. We forecast Cello to post industry leading Revenue, EBITDA and PAT CAGR of 16 per cent, 21 per cent and 24 per cent respectively in FY23-26," it added while initiating coverage on the stock with a 'buy' rating and target price of Rs 950.

Axis Securities on Happiest Mind Technologies
Rating: Buy | Target Price: Rs 1,100 | Upside Potential: 22%
"We believe the company is well-placed to revive its growth momentum, which would be driven by significant growth opportunities in the ER&D; sustainable operating margins on account of better services mix and improving operational efficiencies; robust balance sheet, strong return ratios, and healthy free cash flow generation; efficient execution capabilities, and ramp up in new deal wins along with strong client additions," said Axis Securities.

We believe these attributes would aid Happiest Minds in achieving sustainable growth in the long term, said Axis Securities, while initiating coverage on Happiest Minds Technologies with a 'buy' rating and target price of Rs 1,100.

B&K Securities on Macrotech Developers
Rating: Buy | Target Price: Rs 1,155 | Upside Potential: 16%
Macrotech Developers, one of the branded real estate players in India with market leadership in MMR, is well placed to deliver robust sustainable pre-sales growth over the medium term driven by stronger launch pipeline in core markets, buildup of JDA portfolio, entry into newer markets and pick-up in monetisation of historical land parcel, said B&K Securities in its IC report.

"Stronger sales velocity and execution efficiency has improved cash flow generation visibility. Despite expectation of robust business growth, leverage would remain at a comfortable level. Hence, we believe Macrotech is one of the best ways to play the cyclical upturn of the real estate sector and market consolidation story," it added with a buy rating with a target price of Rs 1,155.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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