1. Dalmia Bharat: Motilal Oswal maintains a ‘Buy’ rating on this cement company but cut its target price to Rs 1,915 from Rs 2,000, indicating an upside of 34.6%. Analysts Sanjeev Kumar Singh and Mudit Agarwal cut their target price as they expect high energy costs and freight costs to persist. However, the analysts “like the company owing to its growth plans, a locational advantage in East India and cost reduction measures”. Revenue rose 7% YoY to Rs 3,380 crore driven by improvements in realisations and sales volume and realisation improved 4% YoY to Rs 5,121 per tonne, as cement prices increased during Q4FY22. 

The analysts expect demand for cement to grow at 8-9% over the next few years, driven by higher Infrastructure spending, low-cost housing and rural demand. They believe the company is well-placed to benefit from the rise in demand given its focus on capacity expansion and cost-efficiency measures. They expect the company’s operating revenue to grow at a 10.9% CAGR over FY22-24.

2. Polycab India: BOB Capital Markets maintains a ‘Buy’ rating on this cable and fast moving electrical goods maker with a target price of Rs 3,000, indicating an upside of 16.5%. Analysts Vinod Chari, Someel Shah, and Tanay Rasal remain positive about the company’s prospects given its robust Q4FY22 results, market leadership in cables and wires, and distribution presence. The company’s Q4FY22 net profit rose 20% YoY to Rs 320 crore and revenue rose 35% YoY to Rs 3,943.7 crore led by growth across the cables and wires segments.

The analysts say that “being the market leader in cables and wires, we expect Polycab to not only pass on the higher raw material cost but also to gain market share given its superior product quality”. The company commands 22-24% market share in the organised market and 15-16% share in the fragmented market in India The brokerage take is that the ongoing revival in infrastructure and construction activities to benefit the cable and wire industry, especially organised market leaders like Polycab. The analysts expect the company’s revenue to grow at a 15.1% CAGR over FY22-24.

3. Federal Bank: Axis Securities maintains a ‘Buy’ rating on this bank stock but reduced its target price to Rs 115 from Rs 125. The new target price indicates an upside of 35.2%. “Federal Bank reported a muted Q4FY22 with operational performance below our expectations,” says analyst Dnyanada Vaidya. In Q4FY22, Net Interest Income grew by 7% YoY to Rs 1,525 crore which was below the brokerage’s estimate of Rs 1,595 crore, he added  Vaidya says that lower than expected provisions for NPAs supported profit growth. Provisions were down 69% YoY to Rs 75 crore which led to profit rising 13% YoY to Rs 541 crore, he said. 

Vaidya adds that the bank “has been taking a cautious approach in building the loan mix toward high-rated corporates and retail loans. The bank’s liability franchise remains strong with CASA plus Retail TD of 92% and the bank looking to improve its CASA deposits gradually over the medium term.” He expects that the bank’s focus on high-margin businesses such as microfinance institutions and credit cards will gradually aid in margin improvement.

4. SRF: Edelweiss maintains its ‘Buy’ call on this chemical company’s stock and increased its target price to Rs 2,800 from Rs 2,700, indicating an upside of 24.9%. “SRF Ltd posted a strong beat on the top line and bottom line, underpinned by highest ever operating performance in Chemicals Business,” says analyst Anshul Verdia. In Q4FY22 the company’s consolidated revenue grew 36% YoY to Rs 3,549 crore, higher than the brokerage’s estimate. According to Verdia, the positive growth in the chemicals business was driven by the strong demand across the markets and new capacity addition in Hungary and Thailand.

Verdia expects refrigerant gas prices to remain firm. He also expects the demand for specialty chemicals to continue to remain strong and packaging segment volumes to be driven by upcoming biaxially oriented polypropylene and aluminum foil capacity. Lastly, the brokerage remains positive as the company has also planned capex of about Rs 2,600 crore for FY23.

5. Hindalco Industries: ICICI Securities maintains its ‘Buy’ rating on this aluminium miner's stock with a target price of Rs 700, indicating an upside of 78.8%. Analysts Abhijit Mitra, Mohit Lohia, and Pritish Urumkar say that “progressively higher contract prices across product segments are also leading to an improved margin outlook in the medium term”. They expect the demand for beverage cans and automobiles to grow 5% YoY and 10% YoY in CY22, respectively. They believe the company is well-placed to benefit from the rise in demand given its capacity expansion and healthy balance sheet.

The analysts expect the $2.5-billion greenfield investment in Alabama to improve EBITDA margins and reduce manpower costs by 30% through automation in the coming years. Furthermore, they see limited earning tailwinds from Novelis and expect its earnings to continue to benefit from cyclicality in FY23. The key risks for the company are lower aluminium prices, lower profitability at Novelis, and a reduction in LME spreads, according to the analysts.

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