1. Aptus Value Housing Finance India: LKP Securities maintains its ‘Buy’ rating on this housing finance company with a target price of Rs 526, indicating an upside of 46.7%. Analyst Ajit Kumar Kabi believes the company is well-placed to capitalise on improving business conditions, given its robust cash positions and underwriting practices. The analyst further adds that the company’s return on assets (RoA) has been best-in-class among its peers on a high net interest margin (NIM) and with controlled operating expenses. He expects an NIM of 10.5% and a RoA of 7% in FY23.

Kabi says, “The company has a robust tech-driven customer acquisition platform and follows a stringent credit underwriting process”. He believes this has enabled the company to keep its net non-performing assets (NNPAs) below 1% for several years. Also, its collection efficacy surpassed the pre-covid level and stood at 101.2% in June. Kabi expects the company’s net profit to grow at a CAGR of 40.7% over FY22-24.   

2. Nippon Life India Asset Management: Axis Securities maintains its ‘Buy’ rating on this asset management company with a target price of Rs 360, indicating an upside of 20.9%. Analysts Sumit Rathi and Dnyanada Vaidya believe the firm’s growth trajectory is intact given rising inflows from tier 2 & 3 cities, and its strong distribution network. Its extensive distribution network enables it to penetrate the underpenetrated Indian market, the analysts added. The analysts also expect Nippon Life to expand its presence and scale up its offshore business via international tie-ups and partnerships.

Rathi and Vaidya notes, “Nippon Life has adopted a differentiation and low-cost approach and is focused on scaling up its Alternative Investment Fund (AIF)/ Portfolio Management Services (PMS) businesses''. They believe this strategy along with its strength in the retail segment resulted in the company amassing the largest investor base in the industry with 1.7 crore investor folios. The analysts expect the company’s net profit to grow at a CAGR of 9.9% over FY22-24.  

3. Jubilant Foodworks: Ashika Research maintains its ‘Buy’ rating on Jubilant Foodworks with a target price of Rs 710, indicating an upside of 17.4%. The brokerage expects the company’s revenue growth to accelerate as it believes customers are shifting to organised quick service restaurants (QSR) from unorganised ones. It believes the company will maintain its dominant position in the Indian QSR space as it is expanding its store network aggressively and diversifying its cuisine portfolio. The firm is also focusing on scaling up its international operations, it added.

The brokerage is bullish for the company as it won exclusive franchise rights to operate the Popeye’s brand restaurants in India, Bangladesh, Nepal and Bhutan. It believes the strategy to diversify its cuisine portfolio will also aid in market share expansion. The brokerage house said, “strong cost control and management commentary on aggressive store additions and thrust on digital & tech initiatives provide a strong growth outlook”. The broker expects the company’s profit to grow at a CAGR of 30.4% over FY22-24. 

4. Hindustan Aeronautics (HAL): ICICI Securities maintains a ‘Buy’ call on this aircraft manufacturer and increases the target price to Rs 2,665. This indicates an upside of 12.1%. Abhijit Mitra, Mohit Lohia, and Pritish Urumkar point out that the order lineup for HAL over the next three years is worth Rs 1.5 lakh crore, which includes manufacturing orders worth Rs 45,000 crore. The company’s management is confident of maintaining 24-25% EBITDA margins and set its internal target of Rs 2,500 crore in export revenues by FY25. 

The analysts note, “The biggest certainty to our valuation is the order book, which is expected to cross Rs 1 lakh crore by FY22-23.” The defence company’s current order book stands at Rs 85,000 crore which includes a fresh order of Rs 6,000 crore in Q1FY23. They further add, “There are hardly any defence primes in the world which manufacture combat aircraft and have an equivalent book-to-bill ratio.”

5. Grasim Industries: Motilal Oswal maintains a ‘Buy’ call on this cement producer with a target price of Rs 1,880, indicating an upside of 10.1%. “Garsim’s FY22 Annual Report highlights integration across the value-chain and diversification into new businesses,” say analysts Sanjeev Kumar Singh and Mudit Agarwal. 

The company’s standalone revenue increased 68% YoY to Rs 20,900 crore, EBITDA increased 105% YoY to Rs 3,200 crore and EBITDA margin increased by 2.8 basis points YoY to 15.4%. According to the analysts, “The improvement in performance was led by higher sales volume and better realisation, which was partly offset by a rise in raw material and input cost in H2FY22 amid a volatile external environment.”

Singh and Agarwal are positive on the cement manufacturer on the back of the company expanding capacity to cater to the growing demand across businesses and its foray into high growth businesses such as paints and B2B e-commerce.

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