Stock brokerages namely Axis Direct, SMIFS Limited, Motilal Oswal and Sharekhan have come out with research reports on select stocks namely Divi’s Laboratories, Muthoot Finance, APL Apollo Tubes, Burger King India. Here's what brokerages said about these counters.
Motilal Oswal has a ‘Neutral’ rating on Muthoot Finance shares with a target price of Rs 1,125 as the lender NBFC reported a strong operational quarter, with a healthy sequential growth in gold loans without the associated trade-offs in spreads/margins.
“With limited upside catalysts, an aggressive competitive landscape and the need for a shift in gold loan NBFCs’ business model, we maintain our Neutral rating,” said Motilal Oswal.
Axis Direct has a ‘buy’ call on APL Apollo Tubes stock with a target price of Rs 1,200. The brokerage believes that with the ramp-up of the Raipur plant, the blended EBITDA/t is expected to improve gradually.
According to the brokerage, volatility in steel prices, and the Raipur plant ramp-up led to lower ROCE in FY23, with a lower Capex intensity ahead along with higher OCFs, ROCE is likely to improve towards 35% as the Raipur plant stabilises in FY24 and to 40% as the plant utilisation improves in subsequent years. Net debt is likely to decline in future as OCFs improve and as the residual Capex cycle for 5MT expansion ends by the end of FY24.
Sharekhan has a ‘Buy’ call on Restaurant Brands Asia (Burger King India) stock with a price of Rs 150. According to the brokerage firm, RBA is one of the emerging players in the domestic QSR market and is trying to establish its foothold through a strong store expansion strategy, a differential menu, expanding digital footprints, and strong promotional strategy.
According to Sharekhan, RBA’s India business’s profitability will consistently improve, while Indonesia business will take time to become profitable. It expects RBA’s cash flows to improve from FY25 when both businesses attain certain maturity and post consistent profitability improvement.
SMIFS has an ‘Accumulate’ rating on Divi’s Laboratories stock with a target price of Rs 3,098 apiece. The near-term headwinds of high RM and logistics costs would fade away in the next few quarters, the brokerage said.
Divi’s focus on custom synthesis segments, and its ability to win repeat, high-tonnage business is clear evidence of its specialisation. Divi’s is strongly positioned to grab the opportunities of newly off-patented molecules, according to SMIFS.
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