- Delhivery: ICICI Securities upgrades its rating on this logistics company to ‘Buy’ from ‘Sell’ with a target price of 460, implying an upside of 43.3%. In Q2FY23, the firm posted a loss of Rs 254.1 crore and its revenue grew by 19.9% YoY.
Analysts Abhisek Banerjee, Amit Dixit and Heenal Gada have turned positive on the company as they believe “Delhivery’s current valuations provide a great opportunity to buy this high-quality stock”. By the end of November, Delhivery fell by around 50% from its peak in July due to concerns over the sustainability of its revenue growth and profitability, But analysts believe that the company’s low-cost structure, effective management, strong balance sheet and high brand recall alleviate these concerns.
They also expect the logistics firm’s EBITDA margins to improve steadily in the coming quarters. They see the firm gaining market share in niche segments like secured delivery. Analysts estimate Delhivery’s revenue to grow at a CAGR of 25.6% over FY22-25.
- Can Fin Homes:Keynote Capitals initiates coverage on this housing finance company with a ‘Buy’ rating and a target price of Rs 670, indicating an upside of 22.7%. In Q2FY23, Can Fin Homes’ net profit rose 14.6% YoY to Rs 141.7 crore, and its revenue grew by 40.6% YoY.
Analyst Devin Joshi is positive about the company’s future growth prospects given its “strong growth history and best-in-class asset quality across various industry phases driven by excellent risk management techniques”. He anticipates the firm’s loan book to grow by 18-20% and maintain its robust asset quality in the coming quarters.
Joshi finds the company’s strict credit policy, which allows lending to only low-risk and safe customers like salaried or self-employed, a key positive. He believes this policy aids the firm in maintaining its excellent asset quality. He also sees the housing finance company’s AUM (assets under management) expanding as it plans to establish 12-15 new branches every year. The analyst expects Can Fin Homes’ net profit to grow at a CAGR of 17.6% over FY22-24.
- State Bank of India: Motilal Oswal maintains its ‘Buy’ rating on this PSU Bank with a target price of Rs 700, implying an upside of 15%. In Q2FY23, the bank’s standalone net profit surged 73.9% YoY to Rs 13,264.5 crore and revenue grew 14.9% YoY.
Analysts Nitin Aggarwal and Yash Agarwal attribute the company’s robust performance to “strong loan growth, margin expansion, and lower provisions”. The improvement in its treasury performance (which supported other income) and controlled operating expenses led to healthy growth in core pre-provision operating profit, they added. They expect loan disbursements to grow 14-16% in FY23, driven by the retail and corporate segments.
In the near-to-medium term, analysts expect a high mix of floating loans to aid profitability and growth in net interest income. They are banking on the asset quality remaining robust while the restructured book is under control. They anticipate the bank’s net profit to grow at a CAGR of 32% over FY22-24.
- Cyient: ICICI Direct maintains a ‘Buy’ call on this IT consulting and software company with a target price of Rs 920, indicating an upside of 13.9%. Analysts Sameer Pardikar and Sujay Chavan attended Cyient’s analyst meeting at their Hyderabad campus and noted that the company is targeting a quarterly revenue run rate of $250 million in FY24 from the current $175 million, which will be driven by organic and acquisition synergies. They expect Cyient’s acquisition to improve diversification and drive annual revenues to $1 billion by FY24.
Pardikar and Chavan expect improved demand from large deals, healthy order book, rebound in DLM business and organisation restructuring to accelerate Cyient’s growth. They are optimistic about the IT consultant as it is also partnering with auto space start-ups and looking to strategically acquire them in the future.
- ACC: Axis Direct recommends a ‘Buy’ call on this cement producer with a target price of Rs 2,710. This indicates an upside of 7.2%. To cater to the high-growth market of central India, the company is expanding its cement grinding capacity to 39.2 metric tonnes per annum from the present 36.1 metric tonnes. The analysts at Axis Direct expect the cement manufacturer to deliver volume growth of 7% CAGR over CY22-24 and record revenue CAGR of 10%.
“The company exhibits a robust financial position with a debt-free balance sheet, high-interest coverage ratio and healthy cash flows Housing and Infra, which consumes around 80-90% of the total cement produced in the country, will further accelerate the demand as the Central government is keen on developing infrastructure under various government schemes and initiatives,” they added.
On the back of expanded capacity, better pricing, increased demand and moderation in commodity prices, the analysts expect ACC to report revenue and APAT CAGR of 10% and 40% respectively over CY22-24.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
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