1. Karur Vysya Bank:
Asit C Mehta initiates a ‘Buy’ rating on this bank with a target price of Rs 265 implying a 18.6% upside. The bank reported net profit growth of 18.9% YoY to Rs 458.7 crore in Q1FY25 while its operating revenue grew 21.3% YoY to Rs 2,284.5 crore. Analyst Akshay Tiwari and Shweta Upadhyay highlight that the gross non-performing assets (GNPA) and net non-performing assets (NNPA) declined from 8.7% and 3.9% in FY20 to 1.3% and 0.4% respectively in Q1FY25.
The analysts expect the bank to see growth in its retail and MSME loan portfolios, while corporate lending growth may remain subdued. The bank's initiatives to attract retail customers should lead to an increase in retail deposits, thereby improving its CASA ratio and driving higher net interest margins. Asset quality continues to improve, supported by healthy recoveries and lower loan defaults.
Tiwari and Upadhyay project the bank's loan book will grow at a CAGR of 16.3% over FY 25-27 (CAGR of 19.7% excluding corporate loans). Margins are expected to improve to 4.4% by FY27. Additionally, they anticipate the bank's net interest income (NII) and PAT to increase at CAGRs of 18% and 25%, respectively, over the same period.
2. Royal Orchid Hotels:
Edelweiss maintains its ‘Buy’ rating on this hotels company with a target price of Rs 477. This indicates a potential upside of 29.4%. Royal Orchid’s revenue grew 6% YoY to Rs 73 crore in Q1FY25, driven by strong room additions (up 13.7% YoY). However, the EBITDA margin declined by 347 bps YoY to 22.8%. Analysts Amit Agarwal and Rishith Shah predict, “Margins will face pressure in FY25, declining to 23.8% due to higher fixed costs to aid its property expansion.”
The analysts are still bullish, due to the company’s expansion plans. The company plans to add 1,900 rooms across 26 hotels in FY25, expanding its total inventory to nearly 7,826 rooms. It aims to drive growth through new management contracts and revenue-sharing agreements. The company also recently opened a new five-star hotel in Mumbai with 300 rooms, expecting an average room rate (ARR) of Rs 9,000–11,000 and approximately Rs 120 crore in revenue at an 80% occupancy rate.
Agarwal and Shah expect a 16.3% revenue CAGR over FY25-26, driven by a 5% ARR growth from improved occupancy, over 1,200 new rooms, increased food & beverages income, and higher in-resort spending.
3. Kalpataru Projects International:
Emkay reiterates its ‘Buy’ rating on Kalpataru Projects International (KPIL), setting a target price of Rs 1,550, indicating a potential upside of 15.9%. This construction and engineering company reported a 19.1% YoY decline in net profit to Rs 93 crore in Q1FY25, while revenue grew by 8.2% YoY to Rs 4,609 crore.
Analysts Ashwani Sharma and Chinmay Kabra noted that KPIL’s order inflow for the year stands at Rs 7,000 crore, down 5% YoY due to a higher base, despite strong growth in the power transmission & distribution (T&D) and water segments. The company has a robust order backlog of Rs 57,100 crore, with FY25 order inflow guidance set at Rs 23,000 crore.
A key positive for KPIL is its recent arbitration win against the National Highways Authority of India (NHAI) for two road projects. The company is also progressing with the divestment of Vindhyachal Expressway and Indore Real Estate, and expects to generate Rs 550 crore in cash flow from these two assets by FY25.
Sharma and Kabra project a 20% CAGR in revenue, 27% in EBITDA, and 38% in PAT over FY 25-27. The company’s strong order book and favorable industry conditions support a one-year forward PE ratio of 20 times.
4. Mankind Pharma:
Motilal Oswal maintains a ‘Buy’ rating on this pharmaceutical company with a target price of Rs 2,760, indicating a 13.7% upside. Analyst Tushar Manudhane notes that Mankind is focused on launching innovative products in the high-barrier chronic and consumer segments. The recent launch of Nimulid, a consumer wellness product, generated Rs 13.3 crore in revenue for FY24. Additionally, the company is expanding its presence in Tier I and metro cities through hospital partnerships.
Mankind’s acquisition of Bharat Serums and Vaccines (BSV) has enhanced its R&D, manufacturing, and institutional capabilities while gaining access to a specialty portfolio and a new distribution channel. BSV’s strong presence in women’s healthcare includes unique drugs with no direct competitors.
Manudhane is upbeat about Mankind’s expansion into new sectors such as pet food, agritech, and ayurveda (following the acquisition of Upakarma). He anticipates a 14% CAGR in earnings and a 180 bps margin expansion over FY25-26, driven by increased footprint in metro and Tier-I cities and expanding the number of brands in the Rs 50-100 crore range.
5. EFC:
Khambatta Securities gives a ‘Buy’ rating to small cap company EFC, setting a target price of Rs 863, which suggests a potential upside of 72.3%.This realty firm reported a net profit increase of 190.5% YoY to Rs 15.1 crore in Q1FY25 and its revenue grew 84.6% YoY to Rs 105.3 crore during the quarter. The company is in a PE buy zone.
The analyst notes that flexible office spaces have transformed India's commercial real estate sector, doubling from 29.3 million sq ft (MSF) in 2019 to 61 MSF in 2023, making it the fastest-growing market.The sector is projected to reach 126 MSF by 2028, absorbing over 40 MSF annually as companies return to office. EFC has established a strong market presence, delivering projects for major clients including Conneqt and Tech Mahindra, and securing its largest contract with Coforge to develop 100,000 square feet of commercial space.
The analyst expects revenue to grow at an annualized average rate of 77% over the next few years while forecasting a PAT CAGR of 105%, driven by profitability gains and adds that at a FY26 forward PE of 11.2 times, the EFC stock looks attractive.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
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