1. Hindustan Aeronautics: ICICI Securities maintains a ‘Buy’ rating on this aerospace company with a target price of Rs 2,618, indicating an upside of 88.6%. The brokerage is bullish for the company’s order pipeline. The current outstanding order book is Rs 79,230 crore at the end of 2021 and with the defence ministry clearing more procurement proposals forwarded by the Indian defence forces, it is expected to strengthen the order book further by Rs 30,000 crore. Apart from this, the management is also expecting more orders worth around Rs 25,000 crore to be finalized in Q1FY23. 

HAL procures Rs 4,000 crore worth of spares and parts from Russia, for which it has maintained inventory to cater to the requirement for at least the next 8-9 months. “The company is also focusing on indigenous production of Russian supplies to reduce the import dependence,” said the analysts at ICICI Securities. The brokerage expects the company’s profit to grow by 8.3% CAGR over FY22-FY24 on a robust order pipeline and improving production capacity.

2. Alkem Laboratories: Motilal Oswal reiterates its ‘Buy’ rating on this pharmaceuticals stock with a target price of Rs 3,870, indicating an upside of 14.1%. “Given the turmoil on the international front, the branded domestic formulations segment remains well protected. It is also on the growth path, with the easing of Covid-related restrictions,” say analysts Tushar Manudhane and Gaurang Sakare. The company delivered 34.5% YoY sales growth in 9MFY22 and exports grew at 18% CAGR over FY16-21. The analysts cut their FY23 and FY24 earnings estimates by 6% and 7% respectively to factor in elevated operational costs for prolonged periods of time. But the brokerage expects a 10% earnings CAGR over FY22-24 on the back of steady outperformance in the domestic formulation segment, a positive benefit of inflation-linked price hike on products, and a consistent compliance track record.

3. Ion Exchange (India): Hem Securities initiates a ‘Buy’ call on this environment solutions company with a target price of Rs 2,526. This indicates an upside of 42.7%. In Q3FY22, the company posted a net profit of Rs 28 crore, down 3.44% YoY, and consolidated revenues of Rs 388 crore, up 11.18% YoY. The engineering division saw improvement in the order book. The company got an order from Numaligarh Refinery. The UP Jal Nigam project commenced in the quarter, and the management is expecting a higher revenue contribution in the next few quarters. Domestic sales improved and new products were launched by the company. The total order book was Rs 2,756 crore and the company has already bid for Rs 5,640 crore, mainly related to pipelines. Return on equity is 30% and the company is debt-free. The brokerage feels that the company’s market capitalisation can double from here over a longer-term. 

4. Infosys: Axis Securities has a ‘Buy’ rating on this software services company with a target price of Rs 1,895, indicating an upside of just 1.3%. The company’s management “has taken cost optimization efforts which help them to gain long term sustainable operating margins” said analysts at Axis Securities. The deal pipeline remained robust in Q3FY22 at $2.53 billion. It won multiple large transformation deals, despite uncertainty across sectors like BFSI, communication, manufacturing, and auto. 

The digital transformation business is intact, as its engagement with its partner network expanded beyond certifications into the setup of co-innovation centres, building industry solutions, and joint sourcing of deals. The company will continue to invest in Its digital product, digital talent, and sales and marketing to drive growth. The brokerage expects Infy’s profit to grow by 10.6% CAGR over FY22-FY24 on a strong deal pipeline and robust demand.

5. Avanti Feeds: Geojit BNP Paribas maintains ‘Buy’ on this food products company but reduced its target price to Rs 535, indicating an upside of 25.1%. For Q3FY22 the company’s sales grew by 17% YoY to Rs 1,069 crore on the back of 18%YoY growth in the feed segment and 12% YoY growth in the processing segment. But the company’s profit fell 46% to Rs 40 crore. Avanti Feeds announced a capacity expansion of 1.75 lakh metric tonne, with a capital expenditure of Rs 125 crore by Q1FY23. The brokerage expects revenue CAGR of 13% over FY22-24. 

In 2021, USFDA advised Avanti to voluntarily recall certain products processed between October 23, 2020 to November 11, 2020, which were identified as potential for contamination for containing Salmonella.  The total recall was for products worth more than Rs 66 crore. The company hiked prices to reduce the impact of cost inflation. Yet analyst Vincent Andrews says that “demand outlook is improving given the re-opening of hotels & malls in export markets along with better export & farm gate prices and favourable shrimp culture conditions.” He said the brokerage reduced its target price due to impending margin pressure.

Note: These recommendations are from various analysts and are not recommendations by Trendlyne.