- Rainbow Childrens Medicare: ICICI Direct initiates a ‘Buy’ call on this healthcare facilities company with a target price of Rs 840. This indicates an upside of 13.6%. Analysts Siddhant Khandekar, Kushal Shah and Utkarsh Jain say that the company has expertise in the most case-sensitive healthcare group of pediatric and perinatal care. They believe that it makes the company “a standout player”. The healthcare company has planned to expand its presence by adding 850 beds across cities in the next four to five years.
Khandekar, Shah and Jain say, “The company’s hub and spoke model will aid growth and accessibility for patients.” Rainbow Childrens Medicare also follows a doctor engagement model where most of its core specialists work at the hospitals on a full-time retainer basis, which the analysts believe has led to a high degree of full-time doctor retention. They expect revenues to touch Rs 1,098 crore, showing an improvement of 13% YoY in FY23.
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Embassy Office Parks REIT: ICICI Securities maintains a ‘Buy’ call on this REIT with a target price of Rs 425, indicating an upside of 35.3%. The company's board has approved the acquisition of Embassy Business Hub, a property under development, for an enterprise value of Rs 330 crore. The acquisition will be funded through debt at an interest cost of 8.1% per annum. Analyst Adhidev Chattopadhyay expects that the rent from phase 1 will commence in Q1FY25 and phase 2 in Q1FY28, and it will derive an enterprise value of Rs 310 crore at an 8% cap rate for the acquisition, which he believes is value-neutral.
The analyst remains cautious as the FY23 Union Budget carried a proposal to make the debt repayment/capital return portion of listed REITs taxable from FY24 and currently, 40% of the NDCF distribution profile for Embassy REIT comes from debt repayment which will become taxable from FY24. He concludes, “there may be some relaxation in the final version of the Budget proposal, with debt repayment not being taxed upfront,” for which we await final clarity.
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HG Infra Engineering: IDBI Cap maintains a ‘Buy’ call on this construction and engineering company with a target price of Rs 1,067. This indicates an upside of 34.8%. Analysts Vishal Periwal and Prachi Kadam visited HG Infra’s Ganga expressway project site and interacted with the execution team and management. HG Infra was awarded the Ganga expressway project in Q1FY23, with a project cost of Rs 4,400 crore. The company scheduled the completion by January 2025 but the analysts say, “it is planning on early completion in 24 months, post which they will be eligible for an early completion bonus of Rs 50 crore.”
HG Infra has maintained its revenue target of growing 25% and 22% YoY in FY23 and FY24, respectively. The analysts expect margins to be in the range of 15%-16%. According to them, it is also eyeing order inflows of Rs 8,000-10,000 crore in FY24.
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InterGlobe Aviation: Prabhudas Lilladher maintains its ‘Buy’ rating on this airliner with a target price of Rs 2,347. This implies an upside of 23.5%. Analysts Jinesh Joshi and Stuti Beria believe that the company is well-placed to capitalise on India’s rapidly growing aviation market as it has a 56% market share in India. They are also positive about the management’s plans to increase the fleet size to 350, expand the network to 115 destinations and increase carrying capacity by FY24.
Joshi and Beria believe that the company is “well placed to strongly benefit from higher capacity deployment, network expansion in domestic as well as international markets, lower crude prices and superior industry cost structure in the current environment.” The analysts add that the management’s plan to increase international destinations will drive market share expansion. They expect the company’s revenue to grow at a CAGR of 40% over FY22-25.
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Dalmia Bharat: Axis Direct keeps its ‘Buy’ rating on this cement manufacturer and raises its target price to Rs 2,260 from Rs 2,120. This indicates an upside of 14.6%. Analysts Uttam Kumar Srimal and Shikha Doshi believe that the company’s strategy to continue exiting from its non-core businesses augurs well, as it can focus solely on its cement business. They are also positive about the firm’s capacity expansion plans, and expect its overall cement capacity to touch 49 metric tonnes per annum in FY24.
Srimal and Doshi expect demand for cement to grow at a CAGR of 7-8% over FY22-25 on the back of the increased government capex on infrastructure and housing. They believe “with the commissioning of new capacity and cost optimization measures'', the company will be a major beneficiary of the Centre’s infrastructure push. The analysts estimate the cement manufacturer’s net profit to grow at a CAGR of 12% over FY22-25.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
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