1. InterGlobe Aviation: ICICI Securities maintains its ‘Buy’ rating on this airlines stock with a target price of Rs 2,360. This indicates an upside of 14.4%. Analysts Ansuman Deb and Ravin Kurwa expect the company to post a profit in Q3FY23 on the back of rising daily passengers and a fall in aviation turbine fuel (ATF) prices. They expect an 18% QoQ growth in the number of passengers carried (PAX) by Indian airlines in Q3. “Accordingly, IndiGo could report total PAX of 22.5mn in Q3FY23, up 14% QoQ, based on market share assumption of 56% in December 2022,” they added.

The analysts believe the company’s domestic passenger load factor (PLF) will maintain traction in Q3, in line with rising demand. They estimate its PLF to come in at 85% in Q3FY23. ATF prices are also likely to fall 8% QoQ, which will reduce margin pressure on the company. Deb and Kurwa expect Indigo’s revenue to grow at a CAGR of 59.1% over FY22-24. 

2. Prestige Estates Projects: Motilal Oswal maintains its ‘Buy’ rating on this realty company with a target price of Rs 675. This indicates an upside of 45.2%. Pritesh Sheth and Sourabh Gilda expect “CY23 to be a defining year for the company as it looks to grow its pre-sales on a strong base, provide growth visibility”, and allay concerns about high debt levels. The analysts believe the firm’s launch pipeline and robust pre-sales bookings will improve cash flow generation. Given stronger cash flows, they expect a large part of the firm’s capex to be funded through internal accruals, thus capping net debt. 

Sheth and Gilda anticipate the firm’s pre-sales to rise further in FY24 on the back of higher-than-expected launches in the next 12 months. They believe its commercial portfolio will generate a rental income of Rs 3,200 crore in the next five-six years. The analysts estimate the company’s revenue to grow at a CAGR of 11% over FY22-25.     

3. UNO Minda: Axis Securities recommends a ‘Buy’ call on this auto components manufacturer with a target price of Rs 571. This indicates an upside of 6.7%. Analyst Neeraj Chadawar says, “The company is well-diversified with an ICE-EV agnostic product portfolio and is constantly increasing kit value, leading to higher wallet share with existing and potential clients.” According to him, the company’s divisions are operating at optimum capacity and it has announced a critical capex growth pipeline to meet incremental demand. 

Chadawar says that announcements made in Q2FY23—expansion of lighting (capex of Rs 400 crore) and alloy wheels (Rs 190 crore) capacity, total capex pipeline of Rs 1,664 crore, and joint venture with Buehler and Tachi-S—will further boost the company’s long-term growth drivers. With strong growth drivers and a strong order book, the analyst expects revenue and profit CAGR of 22% and 42% respectively over FY22-25.

4. Can Fin Homes: ICICI Direct initiates coverage with a ‘Buy’ call on this housing finance company and a target price of Rs 625. This indicates an upside of 14%. Analysts Kajal Gandhi, Vishal Narnolia and Pravin Mule say,  “Can Fin Homes continues to focus on tier-2 and tier-3 cities where there is less competition from banks and it can benefit from pricing power with an increased focus on branch expansion.” With the government’s focus on affordable housing, the analysts think the company is poised to benefit in terms of an improved growth trajectory. They expect the loan book to grow at 17% CAGR in FY22-25. 

Gandhi, Narnolia and Mule say, “Can Fin Homes has been a best-in-class housing finance player with a robust business model and underwriting practices.” The analysts are optimistic about the housing finance provider as it will have consistent growth with a focus on efficient operations, coupled with relatively lower cost and strong underwriting, which will in turn, benefit earnings and return ratios.

5. KPIT Technologies: Ashika Research gives a ‘Buy’ call to this IT consulting and software company with a target price of Rs 800, indicating an upside of 11.5%. According to the analysts, “KPIT stands to benefit from the recent acquisition of four Technica Group Companies, as it will help it  create a unique one-stop shop for the automotive industry in its transformation towards Software Defined Vehicles.” They added that the acquisition will enable KPIT to retain clients, engage much earlier in client development programmes, be part of complex architecture, etc.

According to the analysts, the company is a strong player in a high entry barrier segment as it operates in an area which is extremely complex and disruptive. Therefore, entry into such a segment is extremely difficult for new players. The analysts are positive on the back of soaring deal size, healthy balance sheet status, strategic end-to-end engagement model and strong demand. “All key growth levers in cumulation affirm the continuance of positive earnings growth trajectory,” they concluded.

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

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