1. Ajanta Pharma (AJP): Motilal Oswal maintains a ‘Buy’ rating on this pharmaceutical company but cuts its target price to Rs 2,500 from Rs 2,780, indicating an upside of 32%. The brokerage reduced the target price due to the lower pace of ANDA (abbreviated new drug application) filings and approvals in the US market, which may hinder growth in the medium term. However, its compliance track record remains sound and ongoing product development implies a promising outlook for the US generics segment.

The brokerage remains bullish on Ajanta’s branded generic segment and believes the company is on track to outperform the industry. “AJP has remained a focused player in the branded generics business in Asia and Africa, with 40 product registrations over the past 12 months”, say analysts at Motilal Oswal. The company delivered 53% and 2% YoY sales growth in Africa and Asia respectively over 9MFY22 on the back of 20-22 product launches and market share gain in existing products. It already has a portfolio of 200 products in the Asia and Africa markets. The brokerage expects Ajanta Pharma to deliver a 16% profit CAGR over FY22-24.

2. Bharat Petroleum Corporation (BPCL): HDFC Securities upgrades its rating to ‘Buy’ for this oil marketing company with a target price of Rs 420. This indicates an upside of 16.6%. The brokerage upgraded the call as “the stock has corrected 30% from its peak over the last six months, owing to pressure on auto-fuel marketing margins and an increase in LPG under-recoveries,” say analysts Katkar, Ghuge, Chokshi and Akshay Mane. A combination of a sharp surge in crude oil price and pausing of revision in retail auto fuel and LPG prices resulted in the contraction of auto fuel marketing margins and an increase in LPG under-recoveries for the OMCs. Additionally, the government announced an LPG subsidy of only Rs 4,000 crore in the recent budget which the brokerage expects to be revised. The brokerage is positive on the stock on improvement in refining margins and resumption of daily auto fuel price changes. Retail prices may be raised given the increased crude oil prices, which will further lighten the LPG recovery burden.

3. Reliance Industries (RIL): Prabhudas Lilladher reiterates its ‘Buy’ call on this oil and gas to retail conglomerate and raises its target price to Rs 3,045, indicating an upside of 17.3%. “Low product inventory and strong demand have pushed oil product spreads, which will benefit complex refiners like RIL,” says analyst Avishek Datta. Additionally, domestic gas prices are set for a sharp upward move in the backdrop of a multi-fold increase in international prices. Spot LNG prices are also on an upswing led by higher demand in Europe. Amid geopolitical tensions, gas prices are likely to remain at elevated levels. Datta adds, “We expect RIL’s telecom and retail segment performance to remain strong on the back of flow through of tariff hikes and opening of stores.” The brokerage remains positive on the company as it exhibits strengths across its business verticals. 

4. Can Fin Homes: CD Equisearch maintains a ‘Buy’ on this housing finance company and increases its target price to Rs 754 from Rs 665, indicating an upside of 25.4%. The loan book of the company saw robust growth of 19.5% YoY in Q3FY22 to Rs 25,091 crore. In terms of asset quality, Gross NPA and Net NPA ratios stood at 0.71% and 0.39%, respectively, showing sequential improvement over Q2FY22 ratios of 0.78% and 0.47% respectively. The brokerage states, “Established focus on catering to affordable segments and small ticket size in its stronghold southern market, has enabled the company to penetrate deeper in tier-2 and tier-3 cities.” Accordingly, the brokerage expects the company’s loan book to grow by 20% in the current fiscal year. The brokerage adds, “With a capital adequacy ratio of 24.2% Can Fin’s balance sheet remains well capitalized to support this growth.” CD Equisearch believes penetration in remote areas of the country would act as a catalyst for business growth.

5. G R Infraprojects (GRIL): Axis Securities initiates coverage on this EPC infrastructure company with a ‘Buy’ rating and a target price of Rs 1,775, indicating an upside of 22.9%. As the construction sector is witnessing long-term structural changes on account of the government’s push towards infrastructure development, many opportunities are emerging in the construction space such as the development of airports, metros, and railways, among others. The brokerage believes that the company is well placed to capitalize on opportunities due to its diversified order book, healthy bidding pipeline, established track record, and healthy financial position. As of December 2021, the company’s order book stood at Rs 14,599 crore (2x of FY21 revenue), comprising road projects as well as metro projects. “GRIL is one of the leading EPC (engineering, procurement, and construction) contractors in India having a demonstrated project execution experience of more than two decades,” say analysts at Axis Direct. Furthermore, the brokerage expects the company’s healthy capital structure will enable it to efficiently capture emerging opportunities moving forward.

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