1. Tata Consumer Products: ICICI Securities maintains a ‘Buy’ call on this packaged foods company with a target price of Rs 925. This indicates an upside of 17.4%. The company in a conference call said that it is in the process of creating a simplified corporate structure for its consumer businesses. “Post acquiring 100% stake in the international tea business and Tata Coffee, Tata Consumer Products has created a simplified structure to sell commodity/ low-growth/ low-profit businesses,” say analysts Manoj Menon, Aniruddha Joshi, and Karan Bhuwania. 

The brokerage expects some revenue synergies, especially in the coffee extraction business. The analysts believe there is further scope to reduce the complexity of the company’s structure and are positive on the stock hoping for further restructuring of the corporate structure in FY23.

2. Emami: Motilal Oswal maintains a ‘Buy’ rating on this FMCG company, but cut its target price to Rs 540 from Rs 650. This indicates an upside of 19.3%. The brokerage reduced its target price as FY22 sales of Rs 3,200 crore were lesser than its domestic peers like Marico, Britannia, and Dabur. However, its revenues grew at a CAGR of 9.3% over FY20-22, compared to 3.7% in the preceding 5 years.

The brokerage is bullish on the company’s new acquisition of the Dermicool brand from Reckitt Benckiser India. It expects the acquisition to make the company a market leader in the category. “The acquisition of Dermicool, the third-largest player in the ‘Prickly Heat and Cool Talc’ category, gives Emami market leadership in this category,” say analysts Krishnan Sambamoorthy, Dhairya Dhruv, and Kaiwan Jal Olia. The acquisition will give the company a combined market share of 45%, making it the largest player in the category. The company’s Navratna Cool Talc is the second-largest brand in the market. Through this acquisition, the company expects its geographical reach to expand as both businesses have common distribution channels.

3. Aptus Value Housing Finance India: Axis Securities has initiated coverage on this housing finance company with a ‘Buy’ rating and a target price of Rs 400. This indicates an upside of 14.4%. The brokerage believes the company is well placed to benefit from the rapidly growing affordable housing finance segment, with its deep rural penetration in South India and improving asset quality trends. Although the company operates in a ‘high-risk’ self-employed segment, where repayments are not regular during times of disruptions, it managed to maintain robust asset quality. 

The company has maintained its asset quality due to its focus on risk management. “Over the years, Aptus has successfully developed expertise in serving self-employed and new-to-credit customers alongside maintaining robust asset quality,” says analyst Dnyanada Vaidya. Deep penetration and a strong customer connection have given the company pricing power that enables it to generate superior RoA (Return on Assets). The company is already operating at its pre-covid levels, and with improving traction in collections the brokerage expects the loan book to report healthy growth of 27% CAGR over FY22-24.

4. Balaji Amines: Edelweiss maintains a ‘Buy’ call on this specialty chemicals maker and has increased its target price to Rs 4,150, indicating an upside of 29.7%. Analysts from Edelweiss visited the plant in Solapur to meet the management to discuss the company’s business operations, pricing trends, and capital expenditure plans. The company’s management said they are hiking prices, to offset sharp increases in raw material costs, which continued to rise in 4QFY22. The company plans to commercialise captive coal-based power plants to reduce reliance on purchasing high-cost electricity. The management expects healthy top line growth, driven by the ramp-up of ethyl amines,  dimethyl carbonate, and dimethylformamide plants.

The management took a cautious approach in announcing capex and prioritising capital deployment in import substitution projects. The analyst Anshul Verdia says, “Our estimate suggests over Rs 600 crore of capital expenditure in the next two to three years.” After the recent plant visit, the brokerage remains confident on the company’s prospects on the back of execution quality and the company’s product mix.

5. PVR: Prabhudas Lilladhar has given a ‘Buy’ rating to this multiplex chain with a target price of Rs 2,224, indicating an upside of 16.4%. “The PVR and Inox merger will create a multiplex behemoth with a network of 1,500+ screens across India,” say analysts  Jinesh Joshi and Shweta Shekhawat. The company plans to add an additional 200 screens each year. The merger would not require Competition Commission of India’s approval as revenues of the combined entity will be below the threshold of Rs 1,000 crore for scrutiny by the competition watchdog. The analysts add that the merger will give the company an ‘invincible’ size advantage. They expect the merger to result in material revenue and cost synergies by improving bargaining power with film distributors, real estate developers, advertising networks, and ticket aggregators. For the merged entity, the analysts expect profit, revenue and EBITDA of Rs 660 crore, Rs 7,260 crore and Rs 1,460 crore in FY24, respectively. 

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