- HCL Technologies: Motilal Oswal reiterates its ‘Buy’ call on this IT consultancy company with a target price of Rs 1,240. This indicates an upside of 24.6%. In Q2FY23, HCL reported an increase in net profit of 6.3% QoQ to Rs 3,489 crore (2.8% higher than the brokerage’s estimate) and an increase in revenue of 4.4% QoQ to Rs 24,922 crore. Analysts Mukul Garg and Raj Prakash Bhanushali note that the revenue growth was led by IT services, and engineering, research and development verticals.
Garg and Bhanushali say, “Strong sequential growth within services, robust headcount addition, healthy deal wins, and a solid pipeline indicate an improved outlook.” Given the company’s abilities in the digital space, its strategic partnerships, and investments in the cloud, analysts expect HCL Technologies to emerge stronger on the back of an expected increase in enterprise demand for these services.
- Havells India: ICICI Securities maintains a ‘Buy’ call on this consumer durables company with a target price of Rs 1,621, indicating an upside of 31.1%. Aniruddha Joshi, Manoj Menon, Karan Bhuwania and Pranjal Garg say, “While consensus appears concerned about higher copper prices hurting earnings and stock price movement, we note there is a strong positive correlation (0.8) between copper prices and revenues and EBITDA of Havells.” They add that while copper prices increased at a CAGR of 8.5%, the company’s revenue grew at 15.3% CAGR over FY09-22.
The analysts, while settling down the concern about inflation add, “Havells has historically been able to initiate pricing action to pass on additional costs and maintain/improve margins. With steady earnings growth, the stock price has also improved in spite of volatility in copper prices.” They remain positive on the company on the back of strong moats and growth opportunities.
- Tata Consultancy Services: KRChoksey upgrades its rating on this IT consulting & software company to ‘Buy’ from ‘Accumulate’ with a target price of Rs 3,739. This indicates an upside of 20.6%. Analyst Saptarishi Mukherjee is bullish on the stock despite its Q2FY23 revenue and net profit being marginally below the brokerage’s estimate. The analyst is positive about the company’s future growth prospects as all its business verticals grew on a sequential basis.
Mukherjee sees TCS’s deal booking of $ 8.1 billion in Q2 as an indication that the demand for its services is healthy and stable. He adds “Operating margin is expected to improve on the back of lowering the sub-con cost, improvement in retention, pricing, and efficiency”. Overall, he believes the company is well-positioned to weather global macro uncertainties given its size, market leadership, and robust order book to deliver industry-leading growth in the coming quarters. The analyst expects the software giant’s revenue to grow at a CAGR of 13.6% over FY22-24.
- Titan: Sharekhan maintains its ‘Buy’ rating on this jewellery & watch manufacturer with a target price of Rs 3,140. This implies an upside of 19.7%. The analysts at Sharekhan expect the company’s consolidated revenue to grow 20% in Q2FY23. They expect this growth to be led by the jewellery and watches segments after the company announced its pre-quarter business update. The firm’s standalone jewellery and watches segment grew by 18% and 20%, respectively. “The strong tailwind demand led by a desire to own more premium watches helped brand Titan grow fastest in the watches category aided by higher volume and average selling prices YoY”, the brokerage adds.
Analysts at Sharekhan are optimistic about the company’s future growth prospects given its aim to increase its revenue at a CAGR of 20% over FY22-27. They also believe that its consistent margin improvement will improve cash flow in the coming quarters. The analysts expect the company’s financial performance in FY23 to be strong due to a low base in its core businesses. They estimate the firm’s revenue to grow at a CAGR of 22.1% over FY22-25.
- Bharti Airtel: Axis Direct maintains its ‘Buy’ rating on this telecom services company with a target price of Rs 875, implying an upside of 13.9%. The analysts at the brokerage expect data consumption in India to increase in the coming quarters, which they believe augurs well for the company. They add that in Q1, “The company continued a strong share of 4G net ads in the market as the 4G customer base grew by 4.5 million QoQ to reach 195.5 million”. The home business segment also saw a healthy addition of new customers, write the analysts.
Axis Direct is bullish on Airtel’s future growth as its revenue has consistently been rising sequentially, with growth across its business verticals. Positives here include the company’s efficient execution, superior customer mix, and strong customer additions in 4G will aid margins. The analysts expect Airtel’s net profit to grow at a CAGR of 39% over FY22-24.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
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