1. Mastek: HDFC Securities maintains a ‘Buy’ rating on this IT services company’s stock but reduces its target price to Rs 3,530 from Rs 3,750, indicating an upside of 22.1%. The brokerage cut its target price as it expects near-term headwinds due to ongoing supply-side concerns. However, it remains positive on the company due to a 25.4% YoY growth in its order book in Q4FY22, boosted by a $65 million (Rs 498.2 crore) deal from the UK Government. The company’s Q4FY22 revenue grew 18.3% YoY to Rs 588.6 crore led by growth in the UK geography and broad-based growth in all its business verticals. 

Analysts Amit Chandra, Apurva Prasad and Vinesh Vala said, “The management is aiming to reach $1 billion revenue in the next five years, implying an organic revenue CAGR of 20%”. They expect the company’s revenue growth to be led by demand for cloud migration and digital transformation, and continued traction in the UK market.  The analysts believe the company is well-placed to capitalize on the new opportunities in the US market, focusing on the healthcare and life sciences vertical. The US market will be a key area of focus for the company as it plans to make investments to strengthen its partner ecosystem, and the analysts expect EPS to rise at a 21% CAGR over FY22-24.

2. PB Fintech: ICICI Securities initiates a ‘Buy’ call on this fintech company with a target price of Rs 940, indicating an upside of 33.3%. “PB Fintech is among the leading insurance and lending intermediaries in India (and) is well placed to benefit from the rising insurance penetration in India, especially through digital distribution,” say analysts Ansuman Deb and Ravin Kurwa.

The analysts believe that the company’s revenue growth, operating leverage, strong balance sheet, and established brand are its key business moats and add that this would help the company generate strong free cashflows

The analysts expect the company’s consolidated adjusted EBITDA to be at Rs 1,020 crore in FY26 and expect the company’s platform Paisabazaar to clock a 30% contribution CAGR between FY21-31.

3. MindTree: Axis Direct maintains a ‘Buy’ rating on this IT services company with a target price of Rs 4,830, indicating an upside of 29.2%. Analyst Omkar Tanksale believes the company has a resilient business model and a proven track record of strong execution capabilities. The company’s Q4FY22 profit rose 49% YoY to Rs 473 crore, led by growth in verticals such as BFSI (Banking, Financial services and Insurance sector), Hi-tech Media, and Life Sciences. The brokerage expects the company’s revenue growth trajectory to continue in the forthcoming quarters due to its strong deal pipeline. The analyst believes the company’s strategy of consistent investment, focus on garnering multi-year engagements, and scaling up of top accounts will aid sales traction moving forward. Tanksale says, “With depreciation in INR, lower travel costs and lower on-site expenses, EBITDA margins are likely to expand in the near term”. The analyst believes that the large headwind of wages hike is behind the company and healthy revenue growth will cushion margin headwinds to a great extent going forward.
4. Gland Pharma: Motilal Oswal maintains a ‘Buy’ rating on this pharmaceutical company’s stock with a target price of Rs 4,040. This indicates an upside of 22.7%. According to analysts Tushar Manudhane and Gaurang Sakare, “Gland has 11 injectable products in the USFDA shortage list, which have combined sales of $400 million over the past 12-month.” They add, “Injectable shortages provide a steady opportunity”.

They are positive on the company due to its niche product pipeline in injectables, volume gains in existing products, wider market operations for its portfolio, and a strong cash cushion for inorganic growth. The analysts expect a 27% earnings CAGR over FY22-24, led by 16% sales CAGR in its core markets, 23% sales CAGR in India, and 43% sales CAGR in the rest of the world over FY22-24; supported by a 200bp margin expansion over FY22-24, and estimates Rs 300 crore in biologics sales in FY24. 

5. Larsen & Toubro Infotech: BOB Capital Markets maintains a ‘Buy’ rating on this IT services company with a target price of Rs 8,140 indicating an upside of 66.3%. The company’s revenue grew 3.6% QoQ to Rs 4,301.6 crore in Q4FY22 against the brokerage's estimates of 5% revenue growth. However, net new deals bagged during the quarter grew 22% YoY to $80 million. According to the company, the large-deal pipeline stands at $2 billion.  Analyst Seema Nayak says that the company “is seeing broad-based demand across verticals and service lines”. She adds that the company “does not anticipate any slowdown in the demand environment but acknowledged uncertainty in terms of rising input costs and the volatile geopolitical climate”. The management expects to deliver a net profit margin in the range of 14-15% in FY23. 

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