1. Gujarat Fluorochemicals: ICICI Securities maintains its ‘Buy’ rating on this specialty chemicals company with a target price of Rs 4,270. This indicates an upside of 36.6%. Analysts Sanjay Jain and Akash Kumar are positive about the firm’s prospects given its capacity expansion in the fluoropolymers segment. They believe this will expand its presence in new-age industries such as batteries, solar panels and green hydrogen. The analysts also believe the stock is trading at an attractive valuation after a 25% fall “over the past three months, while fundamentals remain robust with opportunities expanding”. They say it is “the most affordable Indian fluorine player by valuations”. 

Jain and Kumar expect the firm’s fluoropolymers export market to grow exponentially in the coming quarters and margins to improve, given the cheaper cost of production compared to its western peers. The analysts estimate the company’s net profit to grow at a CAGR of 40.5% over FY22-24.  

2. Chalet Hotels: Prabhudas Lilladher initiates coverage on this hotel chain with a ‘Buy’ rating and a target price of Rs 455. This indicates an upside of 26.9%. Analysts Jinesh Joshi and Stuti Beria believe that the company will be a key benefactor of the “expected recovery in business travel, complemented by an exposure to annuity business that acts as a hedge to the deeply cyclical hospitality industry.”

The analysts add that the firm’s hotel portfolio is situated in strategic locations of major cities, where threat of new room supply is low and entry barriers are high. Also, its affiliation with global brands like Marriott and Novotel gives it strong pricing power. They believe these advantages will enable the firm to perform well during the upcycle.

Joshi and Beria see robust room inventory addition in Pune and Hyderabad and a 2.6X increase in the commercial leasable area driving growth in the coming quarters. They expect Chalet Hotels’ net profit to grow at a CAGR of 68% over FY23-25. 

3. Indraprastha Gas: BOB Capital Markets assumes coverage of this City Gas Distribution firm with a ‘Buy’ rating and target price of Rs 520, which indicates an upside of 24.1%. Analyst Kirtan Mehta is optimistic about the company’s growth prospects on the back of healthy sales volume growth. He believes this growth will be led by stable demand from Delhi and rising demand from new geographic areas. He wrote, “CNG demand is seeing annual growth of 10% in Delhi, 11-12% in Noida, 15% in Ghaziabad, 20% in Muzaffarnagar, 44% in Kanpur, 48% in Rewari, 29% in Karnal, and 24% in Kaithal as per H1FY23 data.” Most new geographical areas are clocking in more than 20% growth on a low base. 

Mehta also sees margins stabilising on the back of favourable government policies and higher sales volume. He sees the company’s margins returning to historical average levels on the back of the normalisation of gas purchase costs. The analyst expects the firm’s revenue to grow at a CAGR of 37.7% over FY22-24. 

4. Axis Bank: Motilal Oswal gives a ‘Buy’ call to this bank with a target price of Rs 1,130, indicating an upside of 19.6%. Analysts Nitin Aggarwal and Yash Agarwal say, “Axis Bank has progressed well over the past few years and has strengthened its balance sheet by making it granular, increasing the mix of retail loans and improving its provisioning coverage ratio.” As a result, the analysts believe the bank’s key metrics, such as loan growth, margins and profitability, have improved. 

They believe that loan growth has witnessed a healthy recovery with 14-18% growth over the past year and expect sustainable loan growth over the medium term on the back of the bank’s focus on rural and semi-urban markets. They say slippages and credit costs should be under control as asset quality issues are now resolved.  They added, “Axis Bank remains focused on building a stronger, consistent, and sustainable franchise.” 

5. JK Cement: Axis Direct maintains a ‘Buy’ call on this cement manufacturer with a target price of Rs 3,350. This indicates an upside of 13.5%. The cement company’s arm JK Paints and Coatings is set to acquire a 60% controlling stake in Acro Paints for Rs 153 crore. The remaining 40% will be acquired over 12 months. 

According to analysts Uttam Kumar Srimal and Shikha Doshi, Acro Paints has a wide product portfolio. They believe that the acquisition will provide an opportunity to foray into construction chemicals and waterproofing products, which have a current market size of Rs 5,000+ crore.

The company aims to achieve a turnover of Rs 400 crore in the next four years and will incur further capex to augment the paint business. Srimal and Doshi expect the paint business to complement and support the growth of the wall putty business as both wall putty and paint businesses have common attributes and influential networks. The analysts view JK Cement as a long-term prospect.

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

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