Paytm, Zomato, Mrs Bectors, Devyani, Titagarh & 2 other stocks saw brokerage initiations

Select stocks including One97 Communications (Paytm), Mrs Bectors Food Specialities, Devyani International, Titagarh Wagons, Zomato, Grauer & Weil (India) and APL Apollo Tubes saw a host of brokerage firms initiating coverage on them. All these stocks have 'buy' ratings on them with an upside potential of up to 40 per cent. Here's what brokerage firms said on these counters:

Equirus Securities on Mrs Bectors Food Specialities
Rating: Long | Target Price: 705 | Upside Potential: 40%
Mrs Bectors Food Specialities, one of India’s recognized biscuits and bakery players, is poised for strong growth across divisions on an improved execution. Domestic business growth would be driven by distribution expansion in existing and new markets while focus on new launches and geographic mix reset would propel growth internationally, said Equirus.

"Growth of QSR chains and new customer acquisition would boost the institutional bakery business. We expect margin expansion via a focus on premiumization in domestic biscuits and bakery space, and on emerging/developed countries for export business," it said in its maiden report on the stock with a 'long' rating with a target price of Rs 705.

Motilal Oswal Financial Services on Zomato
Rating: Buy | Target Price: 70 | Upside Potential: 30%
The food delivery industry in India is all set to grow rapidly in the medium term driven by intensifying internet penetration, rising consumption and growth in urbanization. Zomato is a dominant player in the industry and we forecast the company to report 29 per cent revenue CAGR over FY23-25, said Motilal Oswal in its IC report.

"We expect strong growth to be complemented by the company turning profitable over FY25, despite the elevated competitive intensity. We initiate our coverage on the stock with a 'buy' rating and a target price of Rs 70," it added.

JM Financial on Devyani International
Rating: Buy | Target Price: 195 | Upside Potential: 22%
Devyani is the largest franchisee of Yum brands in India. It has a presence across many large segments (Pizza, chicken, Café) through a portfolio of strong brands. KFC, which is a key earnings driver for Devyani, remains on a strong footing, leveraging its first mover advantage while PH is seeing gradual improvement across metrics, said JM Financial.

Recovery in other businesses has led to an impressive turnaround in profitability and an uptick in RoIC for Devyani within the overall QSR space. A combination of strong brands, large addressable opportunity, execution capabilities, strong promoter backing of RJ Corp and optionality in other brands provides assurance on the growth runway, with initiating coverage on Devyani with a buy rating and a target price of Rs 195 apiece.

B&K Securities on Titagarh Wagons
Rating: Buy | Target Price: 404 | Upside Potential: 35%

Titagarh Wagons is one of the key leading manufacturers of rolling stock in India. Macro tailwinds in terms of the shift of government’s focus to rolling stock procurement and public transport creation, along with strong capabilities and available capacities should help TWL emerge as the biggest beneficiary in the railway value chain, said B&K Securities.

"Focus on diversification through passenger rolling stock, Vande Bharat trains, Wheel Set Joint Venture should help reduce dependence on the wagon segment, open new markets and drive growth. The slowdown in government ordering and increase in competitive intensity remains a key risk," it said while initiating coverage with a buy rating and target price of Rs 404.

Sharekhan on Grauer & Weil (India)
Rating: Buy | Target Price: 142.5 | Upside Potential: 24%
"We initiate viewpoint coverage on Grauer & Weil (India) with a positive view and expect an upside of 25 per cent. Strong growth in the core surface finishing business, recovery in industrial paints segment and high margin mall division, healthy margin outlook given recent softening in commodity prices," said Sharekhan in its maiden report.

"Electroplating chemical business would clock a 15-20 per cent CAGR over next three years led by market share gains and scale up in growing market segments through new products. Industrial paints could drive the next leg of growth given demand opportunities for high performance coating and aerospace & defence coating," it added.

Motilal Oswal Financial Services on One97 Communications (Paytm)
Rating: Buy | Target Price: 865 | Upside Potential: 34%
Paytm has achieved a breakeven in adjusted EBITDA during 3QFY23, well ahead of its guidance. We believe that a constant improvement in contribution margin and operating leverage will continue to drive its operating profitability, said Motilal Oswal in initiating coverage report with a buy rating and a target price of Rs 865 apiece.

"We thus estimate Paytm to achieve EBITDA break-even by FY25 with an EBITDA margin of 3.2 per cent. We further estimate its revenue and contribution profit to grow at 26 per cent and 32 per cent CAGR over FY23-28, respectively, it said citing inability to secure the RBI approval for onboarding new customers in Payment Bank as the key risk.

Equirus Securities on APL Apollo Tubes
Rating: Long | Target Price: 1,413 | Upside Potential: 15%

APL Apollo Tubes is the largest player in the Indian ERW pipes market with an installed capacity of 3.6mtpa and a 55 per cent market share in the Structural Steel Tubes market (SST). Focus on SST market creation and rising share of value-added products has helped the company post strong revenue, EBITDA and PAT growth over FY12-FY22, said Equirus.

We believe APAT will continue to gain market share on the back of its focus on growing in the structural application business and good brand recall from architects & fabricators. With APAT already trading at a rich multiple of 37x FY24E EPS, we believe stock price appreciation would be largely driven by EPS expansion, it added while initiating coverage with a 'long' rating with a target price of Rs 1,413.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)

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