- Mphasis: ICICI Direct maintains a ‘Buy’ call on this IT services company with a target price of Rs 3,410, indicating an upside of 26.7%. In Q4FY22, the company’s revenue increased 4.8% QoQ to Rs 3,245 crore and profit by 9.6% QoQ to Rs 392 crore. According to the analyst Sameer Pardikar the profit growth was aided by higher other income.
“Strategy to mine top 10-20 clients, adding high potential new logos, rise in deal sizes & expansion in Europe bodes well for long term growth” for the company, says Pardikar. The analyst expects improving deal size, market share gains via vendor consolidation, low legacy exposure, and exposure to lesser impacted verticals will drive 22% CAGR growth in direct revenues in FY22-24. The analyst also adds that improving revenue trajectory will boost EBIT margins by 70 bps to 16.0% in FY22-24.
- Titan: Motilal Oswal maintains its ‘Buy’ rating on this jewellery maker’s stock with a target price of Rs 2,900. This indicates an upside of 31.9%. Analysts Krishnan Sambamoorthy, Kaiwan Jal Olia, and Aditya Kasat say the “Q4FY22 result was above expectations, led by healthy sales growth in the non-jewelry segments.” In Q4FY22, the company reported a profit of Rs 660 crore, up 16.7% YoY, and consolidated revenue of Rs 7,800 crore, up 4% (the brokerage estimates were Rs 490 crore and Rs 7,270 crore, respectively)
The analysts add that “new customer additions remain strong, indicating continued market share gains from the competition (and) despite the volatility in gold prices and COVID-led disruptions, its earnings CAGR has been stellar (24%) for the past five-years ending FY22.” They expect this trend to continue.
- Can Fin Homes: Edelweiss maintains its ‘Buy’ rating on this mortgage lender’s stock with a target price of Rs 800, indicating an upside of 54.7%. The brokerage remains positive about the company’s prospects given its robust Q4FY22 results and improving asset quality. The company’s net profit grew 20% YoY to Rs 123 crore and its net non-performing assets (NNPA) ratio fell 31 bps YoY to 0.3%. Analyst Jigar Jani says “Can Fin Homes’ Q4FY22 results beat our estimates on the net revenue and PPOP (pre-provision operating profit) fronts by 10% and 9%, respectively”.
Jani said growth was recorded across the board, with AUM (assets under management) growing 21% YoY to Rs 26,711 crore, driven by a sharp rise of 35% YoY in disbursements. NII (net interest income) grew 28% YoY to Rs 237 crore, driven by an improvement in insurance income, which is linked to disbursements. The analyst expects the loan book to expand at a CAGR of 20% and net profit to grow at a CAGR of 20.6% over FY22-24.
- Housing Development Finance Corporation(HDFC): Prabhudas Lilladher maintains its ‘Buy’ rating on this housing finance company, but cut its target price to Rs 2,900 from Rs 3,228, indicating an upside of 34.5%. Analysts Gaurav Jani and Palak Shah say, “HDFC reported a good quarter with all core metrics beating estimates. Individual disbursals saw an accretion of 18% YoY. Affordable housing saw good traction. Individual loan disbursals saw a 37% YoY growth in FY22”. Net interest income grew by 14% YoY to Rs 4,600 crore and asset under management grew by 14% YoY to Rs 5.7 lakh crore.
According to the analysts, the company’s management indicated that home loan demand remains strong while construction finance could see an uptick and the management commentary also suggested that home loan demand remained strong while the pipeline in construction finance and lease rental discounting was healthy. In terms of the HDFC and HDFC bank synergies the analysts say, “post the merger, all bank branches would source home loans which could drive strong home loan growth”.
- Central Depository Services (India) (CDSL): HDFC Securities maintains a ‘Buy’ rating on this depository services provider’s stock but has lowered its target price to Rs 1,500 from Rs 1,800, indicating an upside of 26.6%. The brokerage cut its target price as CDSL’s Q4FY22 revenue missed its estimate by 14.6%. Analysts Amit Chandra and Vinesh Vala say “the estimates were missed due to a sharp fall in IPO/corporate action revenue”. However, they remain positive about the company’s prospects as they expect steady annuity revenue, growth in BO (beneficiary owner) accounts, and IPO revenue led by the LICIPO.
The analysts expect CDSL’s growth rate to moderate to the pre-pandemic level of 16% CAGR, following two years of robust growth of more than 50% YoY. The analysts expect an EBITDA margin of 67% in FY24 over FY23, and revenue to grow at a 15.4% CAGR over FY22-24. They also expect the company to gain a market share of 70% due to steady growth in the addition of BO accounts.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
