Honasa, Yatra, IDFC First, IRM Energy among 9 stocks that saw brokerage initiations with up to 56% potential upside

Select stocks including Honasa Consumer, Archean Chemical Industries, Aurionpro Solutions, IDFC First Bank, Signature Global, Tega Industries, IRM Energy, Yatra Online and Cigniti Technologies 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 Investec, Keynote Capitals, JM Financial, Axis Securities, Ventura Securities, Centrum Broking, Kotak Institutional Equities, SMIFS and HDFC Securities have launched their maiden reports on these stocks. Majority of these stocks have 'buy' ratings on them with an upside potential of up to 56 per cent. Here's why these analysts are positive on them:

HDFC Securities on IRM Energy
Rating: Buy | Target Price: Rs 580 | Upside: 20%
IRM Energy is a city gas distribution company, with operations in Banaskantha (Gujarat), Fatehgarh Sahib (Punjab), Diu & Gir Somnath (Gujarat), and Namakkal & Tiruchirappalli (Tamil Nadu). Despite challenges within the CGD sector, the company has demonstrated an impressive 78 per cent CAGR volume growth from FY21 to FY23, accompanied by robust margins, said HDFC.

"We expect a strong 42 per cent CAGR volume growth from FY24-26E and robust per unit EBITDA margins of Rs 9.3, Rs 9.2 and Rs 9 per scm for FY24, FY25 and FY26E, respectively resulting in an expected EBITDA and PAT growth of 39 per cent and 44 per cent CAGR, respectively from FY24-26E. The stock is trading at an attractive valuation it added with a 'buy' and target price of Rs 580," it said.

Investec on Yatra Online
Rating: Buy | Target Price: 215 | Upside: 56%
Yatra is one of India’s oldest online travel agency brands and is the largest enterprise OTA in the country. While Yatra lost market-share in B2C over time due to funding constraints, it has built the largest enterprise OTA business. The enterprise OTA biz is 3 times more profitable than the consumer business and is in its early phase of adoption by the industry, said Investec in the IC report.

"Yatra is three times larger than MakeMyTrip in the enterprise business, which has a TAM of Rs 1,004 billion, implying a potential revenue of more than Rs 5,000 crore for OTAs overtime. The recent IPO helps Yatra gain market-share and grow this business faster, while making its consumer biz more competitive," it added while initiating coverage with a target price of Rs 215 apiece.

Keynote Capitals on Cigniti Technologies
Rating: Buy | Target Price: Rs 1,401 | Upside: 27%
Within digital assurance, Cigniti stands among the leading industry players and holds a notable position within the global top 3 for independent testing. The Company has over 300 clients, from BFSI, retail, travel, healthcare and energy sectors across five continents. The strategic diversification aligns with Cigniti's commitment to innovation and becoming an AI & IP-led services provider, said Keynote.

"Cigniti specializes in digital assurance, quality engineering, and quality assurance services, playing a pivotal role in guiding enterprises towards delivering transformative digital experiences. It has extended its footprint into the rapidly growing digital engineering segment, capitalizing on synergies with its existing digital assurance business, thereby also facilitating cross-selling opportunities," it added with a buy and a target price of Rs 1,401.

SMIFS on Tega Industries
Rating: Buy | Target Price: Rs 1,231 | Upside: 15%
Tega Industries is the fifth largest manufacturer globally in the mill liners market in a oligopolistic market and distributor of specialized critical to operate and recurring consumable products for the global mineral beneficiation, mining and bulk solids handling industry. These are ‘critical to operate’ consumable products, with strong industry dynamics, said SMIFS.

"Globally, the company is the second largest producer of polymer-based mill liners deriving 86 per cent of its sales from outside India. It has 10 manufacturing facilities, 7 in India and 3 abroad having an extensive product portfolio of specialized products customized for mineral processing and material handling," it added with a 'buy' rating a target price of Rs 1,231.

Kotak Institutional Equities on Signature Global
Rating: Add | Target Price: Rs 910 | Upside: 13%
Signature Global, an NCR-based real estate company established in 2014, has grown rapidly to become one of the largest affordable and mid-income housing-focused players. Its pre-sales have grown 8 times between FY20-23 to Rs 3,400 crore, and expect it to deliver a 26 per cent CAGR over FY2023-26E, with an improvement in embedded margins to 20 per cent, said Kotak.

"Signature has an enviable track record of quick turnaround (acquisition to delivery), which is reflected in its superior capital efficiency. Strong cash generation has enabled the company to continue to invest for future growth, with a pipeline of 27.4 mn sq. ft as of Sep 2023. We initiate coverage on Signature Global with an 'add' rating and a fair value of Rs 910," it said.

Ventura Securities on Aurionpro Solutions
Rating: Buy | Target Price: Rs 2,887 | Upside: 38%
Aurionpro Solutions, a distinguished software product company renowned for its financial software, has strategically positioned itself with a dual focus on banking and financial software, as well as the technology innovation group (TIG). The company maintained a robust consolidated order book of approximately Rs 810 crores in Q2FY23, said Ventura Securities.

Anchored by a proficient management, with many of them having over two decades of expertise, the company exhibits a seasoned leadership that has played a pivotal role in its success. We initiate coverage with a 'buy' with a target price of Rs 2,887, it added. "Risk to our thesis is any change in senior management and slowdown in the economy."

Centrum Broking on IDFC First Bank
Rating: Buy | Target Price: Rs 104 | Upside: 18%
IDFC First Bank has been gaining market share since merger with capital first, on both advances and deposits front. It believes the bank has a long runway for growth ahead given its augmented product profile and phygital distribution network. The management expresses confidence in maintaining a consistent and robust growth trajectory in advances over the next few years, said Centrum.

"Anticipating upcoming interest rate cuts in the following year, IDFC Bank stands poised for a potential relief in CoF, which has experienced a notable increase of 160 bps since 1QFY23. Further, maturity of recent branch addition should provide some respite on the opex front. We initiate coverage on the stock with a 'buy' rating and a target price of Rs 104," it added.

Axis Securities on Archean Chemical Industries
Rating: Buy | Target Price: Rs 810 | Upside: 22%
"Archean Chemical Industries (ACIL) is a leading marine chemical manufacturer from India engaged in the production and sale of bromine (Br), industrial salt (NaCL), and sulphate of potash (K₂SO₄) from its leased brine reserves located in the Rann of Kutch, Gujarat. We initiate coverage on Archean with a 'buy' rating with a  target price of Rs 810 per share," said Axis Securities.

"ACIL has one of the largest integrated production facilities at Hajipur (Gujarat), which has a strategic proximity to Jakhau Jetty and Mundra Port. It plans to forward integrate its business in Bromine derivatives – an established extension followed across global major Bromine producers. We expect revenue growth to be supported by improvement in margin profile and reduced market cyclicality," it said.

JM Financial on Honasa Consumer
Rating: Buy | Target Price: Rs 515 | Upside: 25%
Mamaearth took shape with Ghazal personally speaking to 700 young mothers to understand their needs and what was missing from the products available in the market, said JM Financial which initiated coverage on Honasa with a 'buy' rating and a target price of Rs 515 on the stock in its IC report.

"We see three key stock drivers- Mamaearth’s success in general-trade elongating the growth runway for the brand; a possible repeat of Mamaearth’s success with The Derma Co, Aqualogica; and continued improvement in margin and cash flow profiles as operating leverage plays out stronger going ahead," it added.

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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