State Bank of India: LKP Securities maintains a ‘Buy’ rating on this public sector bank’s stock with a target price of Rs 565, indicating an upside of 22.7%. Analyst Ajit Kumar Kabi believes the bank delivered stable results led by a rise in operational revenue and improved asset quality. Kabi believes that profit growth in Q4FY22 was led by a 15.3% YoY growth in NII (net interest income), along with steady operating expenses. Kabi says “the bank witnessed better than expected advance growth (11.6% YoY & 6% QoQ) led by wholesale credit growth, and stable deposit growth (10% YoY & 5.3% QoQ) sequentially.”
The bank’s asset quality will continue to improve in the coming quarters on the back of higher upgrades and recoveries, Kabi said Furthermore, he expects the bank’s profitability to improve in the coming quarters on the back of credit growth, normalisation of credit costs, and improving operational performance.
Kajaria Ceramics: HDFC Securities maintains a ‘Buy’ call on this tile maker’s stock but reduced its target price by Rs 30 to Rs 1,420, indicating an upside of 35.6%. “We continue to like Kajaria Ceramics for its market share gain and superior margin in the tiles segment (function of its robust distribution and cost controls) and its fast expansion in the bath ware and ply businesses,” say analysts Rajesh Ravi and Keshav Lahoti. In Q4FY22, the company’s consolidated revenue grew 15.7% YoY to Rs 1,101.8 crore but profit and EBITDA fell by 24.7% YoY and 13% YoY to Rs 95.8 crore and Rs 165.9 crore, respectively. The analysts believe that the fall in EBITDA was due to higher gas prices.
According to the analysts, the company expects volume and revenue to increase by 15-20% and 20-25% YoY respectively for FY23. The analysts also expect India’s tiles export to increase by 35% YoY as sharp spikes in gas and electricity prices in European countries have increased the competitiveness of Indian tile makers. The company “has expanded its tiles capacity by 17% in April-May 2022, bolstering its volume growth and market share gain,” the analysts said.
Vinati Organics: Edelweiss reaffirmed its ‘Buy’ rating on this specialty chemical maker’s stock and increased its target price to Rs 2,300 from Rs 2,250. This indicates an upside of 11.6%. “Vinati Organics’ Q4FY22 earnings beat our expectation, with strong growth in top line primarily on account of increased volume in key products aided by market share gains for some products,” says analyst Anshul Verdia. In Q4FY22, the company’s profit grew 43% YoY to Rs 101 crore and revenue grew 74% YoY to Rs 486 crore.
Verdia believes that “a strong capex pipeline over the next two years indicates significant revenue generation opportunity for Vinati Organics, underpinning its aim to achieve Rs 3,000 crore in top line over the next two to three years.” He expects the company to achieve a 26% CAGR in revenue over FY22–24 on the back of increased penetration of the butyl-phenol market, robust volume growth in Acrylamide tertiary-butyl sulfonic acid and the Isobutyl Benzene business, and strong demand.
Abbott India: Axis Securities maintains a ‘Buy’ call on this pharmaceutical company’s stock with a target price of Rs 20,000. This indicates an upside of 12.6%. “Abbott India reported revenue growth of 14.9% (YoY) in Q4FY22, outpacing the IPM (Indian pharma market) growth of 3.9%,” says analyst Ankush Mahajan. He adds that the revenue growth, “was majorly driven by sales improvement in key therapies such as gastrointestinal (+18.3% YoY) and hormones(+5.0% YoY).”
The company reported a profit of Rs 212 crore, up 38.7% YoY, and EBITDA margins improved by 465 bps YoY to 23.4%. Mahajan expects stable sales of the Duphaston brand and an increase in volume in the Thyronorm brand to help deliver revenue and profit CAGR of 11.1% and 1.3% over FY21-24. The analyst believes that revenue growth in the branded business will improve overall profitability.
Century Plyboards (India): BOB Capital Markets upgrades its rating on this plywood manufacturer’s stock to ‘Buy’ from ‘Hold’ with a target price of Rs 735, indicating an upside of 37.8%. Analyst Ruchitaa Maheshwari says the company’s “long-term growth story remains intact given its strong fundamentals, impressive return ratios and healthy balance sheet”. She upgraded her rating to an attractive valuation after a 30% correction.
The company’s growth momentum will sustain over the near-to-medium term, supported by the plywood and laminates segments, Maheshwari said she expects these segments to grow due to a pick-up in the housing sector alongside a gradual demand shift from unorganised to organised players. Maheshwari also expects better margins in the medium-density fibreboard (MDF) segment amid buoyant demand for ready-made furniture and exports. Overall, she believes the company’s EBITDA margin will expand backed by a higher MDF contribution, superior product mix, operating leverage and cost rationalisation.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.