1. PCBL: ICICI Securities retains a ‘Buy’ call on this chemicals company with a target price of Rs 160, indicating an upside of 35.9%. “PCBL is the leading manufacturer of carbon black, which is used as a reinforcing material in tyres,” say analysts Chirag Shah and Shashank Kanodia. They add that carbon black fetches high margins and finds application in paints and plastics among others, and the company derives 6% of its sales volume from carbon black. 

The analysts are positive on the stock due to healthy double-digit growth. They expect the company’s revenue and profits to grow at 23% and 16% CAGR respectively, in FY 21-24, building in 11.4% volume CAGR. The analysts say, “With greenfield expansion under execution and successful strides made in the speciality carbon black domain, long term growth prospects are robust with limited competition in overseas markets.”

2. PSP Projects: Axis Securities maintains a ‘Buy’ rating on this construction company and a target price of Rs 620, indicating an upside of 13.9%. The brokerage is bullish on the company’s prospects due to its “robust and diversified” order book and track record of successful and timely project execution. At the end of December 2021, the company's order book stood at Rs 4,008 crore comprising both public and private sector projects, according to Axis Securities, and it believes that “this reflects healthy revenue growth visibility for the next 2-3 years”. The company has built a diversified order book including institutional, industrial, government, and private residential projects located in six different geographies.  

As of the end of December 2021, the company’s cash and cash equivalent along with Fixed Deposits stood at Rs 215 crore, indicating a strong liquidity profile, Axis Securities said. The brokerage expects the company’s profit to rise 16.1% CAGR over FY22-24.

3. Tata Consultancy Services (TCS): Prabhudas Lilladher maintains a ‘Buy’ call on this IT services company but reduces its target price to Rs 4,221. This indicates an upside of 19.6%. The company reported a 3.5% QoQ growth in revenue to Rs 50,591 crore, which is 0.5% higher than the brokerage's estimates, but the profit of Rs 9,926 crore was 1.9% below estimate. “Margins are expected to remain under pressure in the near term due to high manpower costs and return of travel and facility costs,” says analyst Aditi Patil but expects “supply pressures to ease in H2FY23, as quarterly attrition cools off.” 

The company has implemented a new organization structure dividing the business into four groups: acquisition, relationship incubation, enterprise growth, and business transformation. This will help focus more on clients and their changing digital needs and improve delivery times. The brokerage expects this new structure to drive the next phase of growth.

4. Infosys: HDFC Securities maintains a ‘Buy’ rating on this IT services player, but reduces its target price to Rs 2,140 from Rs 2,230, indicating an upside of 32%. The cut in target price is a result of disappointing Q4FY22 results.  However, analysts Apurva Prasad, Amit Chandra, and Vinesh Vala maintained their ‘Buy’ rating as they are confident about the company’s growth prospects. The analysts  “remain confident in the company’s prospects of growth leadership within the tier-1 IT space”. They also expect the company’s investments to scale cloud services to accelerate growth and improve margins in the near term. 

The bullish stance is also because the analysts expect accelerated net-new large deal wins (H2FY22 at $ 2.2 billion compared to $1.6 billion in H1FY22), the addition of 13 new large clients, and recovery in the life science vertical to provide near-term growth visibility. They also expect the company’s revenue to rise 13.74% CAGR over FY22-24.

5. Hindustan Unilever (HUL): ICICI Securities maintains an ‘Add’ rating on this FMCG company with a target price of Rs 2,450, indicating an upside of 12.5%. According to the analysts–Manoj Menon, Aniket Sethi and Karan Bhuwania–HUL’s underperformance of 60% vs the Nifty over Q4FY22 may be potentially interpreted as the stock already factoring in concerns like rural slowdown-led demand pressure and inflation. They also feel, “large players (in commodity-sensitive categories) are beneficiaries of inflation in the medium term.” 

The company’s strategy of price cuts, efforts to improve affordability, and focus on protein nutrition are positive for long-term category development, say the analysts at ICICI Securities. They also expect the company to deliver on steady premiumisation, enhancing digital capabilities including e-commerce salience, D2C brands, and a fair share in newer distribution models.

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