Mamaearth, Park Hotels, Yatharth & Archean stocks saw brokerage initiations with up to 38% potential upside

Select stocks including Honasa Consumer Ltd, Apeejay Surrendra Park Hotels Ltd, Yatharth Hospital & Trauma Care Services Ltd and Archean Chemical Industries Ltd 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 Anand Rathi Research, Citi, BP Equities and SMIFS have launched their maiden reports on these stocks. All of these stocks have 'buy' ratings on them with an upside potential of up to 38 per cent, despite a strong rally in recent times. Here's why these analysts are positive on them:

Citi on Honasa Consumer
Rating: Buy | Target Price: 550 | Upside Potential: 26%
Honasa’s strengthening market position through innovation, growth acceleration via expanding distribution reach, entry in new sub-categories and gradual margin expansion-ad-spend rationalization, improving mix, operating leverage are key long-term positives, said global brokerage firm Citi in its IC report on Honasa Consumer.

"We expect growth outperformance led by company-specific initiatives and masstige positioning (business less impacted by demand slowdown). While absolute multiples are rich, these are likely warranted given the company’s strong business prospects, robust growth opportunity, portfolio of brands and improving financial metrics," it said with a 'buy' and a target price of Rs 550.

Anand Rathi Research on Apeejay Surrendra Park Hotels
Rating: Buy | Target Price: 285 | Upside Potential: 30%
Park Hotels operates 30 hotels with 2,298 rooms in luxury categories: boutique upscale, upper midscale, at prime business destinations. It has the highest occupancy in the industry. Following a strategy of pricing its rooms more attractively than peers, a well calibrated expansion strategy and reasonable valuation augur well for it, said Anand Rathi Research.

"We initiate coverage on the stock with a 'buy' and a target price of Rs 285, valuing it at 18 times FY26 EV/EBITDA, giving 10-35 per cent discounts from Indian Hotels, Chalet Hotels and Lemon Tree Hotels," it added. Anand Rathi sees high contingent liabilities and economic slowdown as key risks for the business.

SMIFS on Yatharth Hospital & Trauma Care Services
Rating: Buy | Target Price: 658 | Upside Potential: 38%
Yatharth hospital is a large private multi-speciality tertiary care hospital operating in the regions of North India. The group has a network of four hospitals currently in operation with a total bed capacity of 1405 beds as of December 2023, and in February 2024, it acquired a hospital in Faridabad which will be operationalised in Q1FY25. The company plans to double its bed capacity to 2800 beds in next five years, said SMIFS in its IC Report.

We like Yatharth due to good healthcare at affordable pricing; expanding its presence in underpenetrated markets such as Noida; focusing to improve its therapy offerings which will result in superior case mix thus improving the ARPOB; and lean cost structure due to limited dependence on star doctors which will result in improvement in EBITDA margins, it added with a 'buy' rating and a target price of Rs 658 on the stock.

BP Equities on Archean Chemical Industries
Rating: Buy | Target Price: 658 | Upside Potential: 5%
Archean is the largest exporter of bromine and industrial salt in India and has amongst the lowest cost of production globally in both bromine and industrial salt. Being an export-oriented business with a strong client portfolio gives the company a competitive advantage over its peers, said BP Equities.

We expect Revenue, Ebitda and PAT to grow at 17.2 per cent, 17 per cent and 23.9 per cent CAGR over FY23–25E led by leading market position and continuous expansion in bromine and industrial salt, established infrastructure, and high entry barriers in the specialty marine chemicals industry and attractive valuation, it added with a 'buy' rating and target price of Rs 812 on the stock.

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