- Relaxo Footwears: Sharekhan maintains a ‘Buy’ call on this footwear brand with a revised target price of Rs 1,185. This indicates an upside of 18%. In H2FY22, the company took cumulative price hikes of 25-30% which affected the sales volume. To arrest the sales volume drop, the footwear manufacturer reduced prices by 12-15% in its key value-for-money brands such as Relaxo, Flite, and Bahamas.
Analysts at Sharekhan say, “The price corrections undertaken will take some time to come in the market and hence Q2FY23 sales volumes are expected to be muted due to weak consumer sentiment affected by inflationary pressures.” They expect a gradual recovery from Q3FY23. According to the analysts, Relaxo has a strong, debt-free balance sheet with good cash generation ability, and it is on track to achieve revenue and earnings CAGR of 14% and 22%, respectively over FY22-FY25.
- Phoenix Mills: ICICI Securities maintains a ‘Buy’ call on this retail mall developer with a target price of Rs 1,638, indicating an upside of 13.7%. FY21 and FY22 operations were impacted by mall shutdowns across India owing to successive Covid waves. However, with the waning Covid impact, in Q1FY23 like-to-like consumption across the mall stood at Rs 1,980 crore or 111% of Q1FY20. Analyst Adhidev Chattopadhyay estimates that thanks to continued consumption strength, “we model for FY23 rental income of Rs 1,370 crore.”
Phoenix Mills has nine operational malls and six under-construction malls which are expected to be operational over FY23-26. The estimated capex of these ongoing projects is Rs 9,320 crore, of which pending capex stands at Rs 5,050 crore. Chattopadhyay adds, “We expect the company to generate annual operating cash flow of Rs 1,400-1,500 crore over FY23-25 which can comfortably fund the balance capex”.
He also remains positive on the mall developer due to its strong brand recall and its leadership position among malls across India.
- Divi's Laboratories: Ashika Research recommends a ‘Buy’ rating on this pharmaceutical company with a target price of Rs 4,110, indicating an upside of 12.1%. The analysts at the brokerage believe the company is well-placed to benefit from the expected growth in active pharmaceutical ingredients (API) manufacturing. Supply chain issues in China and the China+1 strategy among buyers has provided Indian API manufacturers with a great opportunity to expand, they added. The brokerage believes the firm’s capacity expansion plans and its strong capabilities in manufacturing APIs, intermediates, and active ingredients will enable it to expand its client base and gain market share.
The analysts also see the company’s generics segment driving growth along with APIs as a key positive. “Divi’s is expected to clock double-digit growth in established generics products where it enjoys market share in excess of 60-70%”, they add. The brokerage expects margin pressure to persist in the near-term but remains positive on the firm’s future growth prospects. It expects the company’s revenue to grow at a CAGR of 7% over FY22-24.
- Jubilant Foodworks: Bonanza initiates coverage of this restaurant chain company with a ‘Buy’ call and a target price of Rs 891, indicating an upside of 46.6%. “The quick service restaurant (QSR) master chef maintains its ground on the back of strong demand outlook and excellent execution capabilities,” says analyst Shreya Hanchate.
Hanchate believes that Jubilant Foodworks is the largest food service brand in the QSR industry and has the benefit of being the first mover. It is also a leading fast-food industry player in terms of the number of stores (1,625 in Q1FY23). The company aims to grow up to 3,000 stores in the medium term.
Hanchate says, “The resultant robust performance in Q1FY23, led by strong revenue growth, recovery in growth, and positive expectations from the new brands' portfolio makes Jubilant a hot pick.” On the back of sustained delivery demand, the analyst expects growth in EBITDA and profit margins of 26% and 11% respectively by FY24.
- Bajaj Finance: KRChoksey maintains its ‘Buy’ rating on this non-banking finance company (NBFC) with a target price of Rs 8,317, implying an upside of 14.8%. Analyst Vikrant Kashyap believes India’s growing housing market will be an important lever of growth for the company. He notes that the NBFC expects its assets under management to grow at an annual rate of 25-28% in FY23. He also believes that future growth will be fuelled by aggressive customer acquisition. He adds, “The NBFC is confident of adding 9-10 million customers by the end of FY23. The firm has been focusing on customer acquisition, which is expected to be its key growth driver”.
Kashyap expects the company’s position as a market leader in customer finance to bode well for it, as it is well-positioned to capitalise on the demand shift towards premium products across discretionary categories. He is also positive about the company’s ability to increase its presence and improve its technological capabilities. The analyst expects Bajaj Finance’s net profit to grow at a CAGR of 41.8% over FY22-24.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
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