By Ruchir SankhlaSharekhan reiterates its ‘Buy’ rating for this 2/3 wheeler manufacturer, setting a target price of Rs 12,584, a potential upside of 7.8%. The analyst highlights that the company has seen a 9.8% increase in sales in FY25, with domestic volumes rising 12.6% and export volumes up 5.4%. While exports remain modest, recovery in the Nigerian market could drive further growth. Its CNG motorcycle, Freedom 125, is gaining popularity, and production capacity is set to expand to 50,000 units per month by January 2025.
The company is also strengthening its position in the electric vehicle (EV) market, holding a 14% share in the domestic electric 2-wheeler segment and a 36% share in the electric 3-wheeler segment. Upcoming EV product launches are expected to support future growth.
The brokerage expects the company’s volume growth to improve, supported by rural market recovery, strong 125cc sales, and festive season demand, while export recovery and CNG expansion should boost growth. The analysts anticipate a EBITDA CAGR of 19% over FY25-26 and EV/EBITDA to be 22.3 times in FY26.
Motilal Oswal maintains a ‘Buy’ rating on this personal products maker with a target price of Rs 1,700. This indicates an upside of 12.7%. Analysts Naveen Trivedi, Pratik Prajapati and Tanu Jindal highlight Godrej Consumer Products’ (GPCL) strategic moves in FY24 across various geographies. In India, the company launched ‘Project Vistaar’ to improve its rural reach and expand sales channels. In Indonesia, it has adopted a distributor-led model in general trade, which it said lowered its operational costs. Additionally, GCPL’s focus on e-commerce in the US drove 15%+ growth, and now accounts for 8% of its total business.
GCPL aims to drive growth in rural markets by introducing affordable products for price-sensitive consumers. It has set up a transportation management system to streamline its delivery routes, improve demand forecasting, and reduce excess inventory.
Trivedi, Prajapati and Jindal are upbeat about GCPL’s acquisition of Raymond Consumer Care, which has added brands like Park Avenue to its portfolio. The company reduced RCCL’s inventory from 90 to 15-20 days, improving operational efficiency despite a 25% revenue drop in FY24 as it cuts excess stock. The management anticipates that the segment will generate Rs 600 crore in revenue in FY25.
Asit C Mehta initiates a ‘Buy’ rating on this other industrial goods company with a target price of Rs 5,106, suggesting a upside potential of 18.2%. Analyst Abhinav Kapadia says that the company sees growth in supplying more advanced materials for mining. These materials are used to grind down gold, copper, and iron ore more efficiently than traditional ones. Currently, less than 15% of the market uses these advanced materials, suggesting a large opportunity to increase usage.
Analysts say AIA Engineering's new mill liner plant improves its products with less wear, better output, and lower costs. AIA is expected to gain a strong position in the global mining industry, similar to its leadership in the cement sector. Its partnerships with EE Milling Solutions and the purchase of MPS Australia have helped improve equipment design and cut costs for customers.
Kapadia highlighted that the company achieved a revenue, EBITDA, and PAT CAGR of 19%, 20%, and 27%, respectively, from FY21 to FY24. He expects EBITDA and PAT margins to remain stable at 29% and 24% in FY25 and FY26, despite export challenges arising from the ongoing Red Sea crisis.
Edelweiss maintains ‘Buy’ rating on this consumer services company with a target price of Rs 1,013, indicating a potential upside of 40%. Analysts Amit Agarwal and Rishith Shah point out that the company is set to benefit from favorable market dynamics, including a 25-27% CAGR in demand for flexible office space due to hybrid working models, increased global capability centres (GCCs), and decentralization of office space by larger firms. The company expects the average seat rental to rise by 5-6% annually.
The analysts note that the company plans to add 40,000 seats in FY25, expanding from its current inventory of 95,030 seats, and has a capex budget of around Rs 140 crore for fitouts. Their expansion strategy focuses on Tier I and Tier II cities, targeting smaller 100-200 seat centers for better pricing. The firm uses a capital-light managed aggregation model, sharing fitout costs with landlords to boost returns while maintaining an asset-light approach, without owning properties
Agarwal and Shah forecast a revenue, EBITDA, and PAT CAGR of 40.1%, 68.6%, and 92.3% respectively for FY25-27, excluding Ind AS 116 adjustments.
ICICI Securities maintains its ‘Buy’ rating on Va Tech Wabag with a target price of Rs 1,541, suggesting an upside of 8.2%. Analysts Mohit Kumar, Abhijeet Singh and Nidhi Shah highlight that this non-electrical utilities company recently secured a contract from the Middle East for a 300 million litre per day (MLD) desalination plant.
This greenfield project, located on the west coast of Saudi Arabia near Yanbu al-Bahr, is set to be completed in 30 months and is valued at Rs 2700 crore, exceeding FY24 engineering, procurement, and construction (EPC) revenues of Rs 2300 crore.
Analysts say that with this order, Wabag’s EPC order book is expected to rise to Rs 7800 crore, improving the book-to-bill ratio to 3.4 times. The operation and maintenance order book stands at Rs 4500 crore. Revenue growth estimates for FY26 have been increased to 20% from earlier projection of 15%. Wabag also has a strong pipeline in the Middle East, having bid for projects worth $100 crore and pre-qualified for a 1000 MLD desalination project.
Kumar, Singh, and Shah expect revenue and earnings CAGR of 15% and 20%, respectively, along with a 300 basis point expansion in return on equity from FY25 to FY26, driven by order book expansion, improved execution, and enhanced margins.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
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