1. Star Cement: Axis Direct keeps its ‘Buy’ rating on this cement company and raises its target price to Rs 165 from Rs 145. This implies an upside of 15%. In Q4FY23, the company’s net profit rose 8.7% YoY to Rs 96.1 crore, while revenue grew by 10.1%. 

Analysts Uttam K Srimal and Shikha Doshi believe the company’s growth will be driven by higher sales volume and lower input costs. They believe the firm is well-placed to benefit from the growing demand for cement in East and North-East India, given its massive presence in the regions and its production capacity expansion initiatives. “The company is the leading producer of cement in the North-East region, which contributes 70-75% of its total revenue," they add. 

The analysts also see the management’s plan to increase the share of its premium cement products to 8% from 4% of total revenue as a key positive. Srimal and Doshi expect the company’s net profit to grow at a CAGR of 14% over FY23-25.

2. Hindustan Unilever: Bob Capital Markets maintains its ‘Buy’ call on this FMCG company with a target price of Rs 3,069, indicating an upside of 14.7%. In FY23, the company’s revenue increased by 15.9% YoY to Rs 61,092 crore. Analyst Vikrant Kashyap says, “Despite persisting macroeconomic challenges such as tepid market growth, high commodity inflation, and geopolitical uncertainties, the company has increased its market share in more than 75% of its portfolio.”

The analyst believes that with its strong brand portfolio, Hindustan Unilever is tapping into emerging demand through new launches. According to the annual report, market development initiatives added Rs 10,000 crore to the company’s turnover in FY23. The analyst expects investments in brand building and innovation to lend further momentum to the company’s growth.

Kashyap is also optimistic about Hindustan Unilever’s strong distribution network and resilient supply chain. With 29 owned factories and 50+ manufacturing partners, the company has a strong production capacity to meet market demand.  

3. Graphite India: ICICI Direct maintains its ‘Buy’ call on this industrial goods company with a target price of Rs 440, indicating an upside of 13.6%. In Q4FY23, the company’s consolidated capacity utilisation was at 55%, lower than the brokerage's estimate of 60% and down from 76% in Q4FY22. During the quarter, it reported a revenue of Rs 820 crore (down 10.4% YoY), as against the brokerage’s estimate of Rs 729 crore. Graphite India’s price rose 106.1% in the past three years, as against the Nifty 50’s 87.7%.
   Analyst Dewang Sanghav says, “The World Steel Association forecasts that steel demand will see a 2.3% rebound to reach 1,822 million tonnes (MT) during 2023, and a further 1.7% growth to reach 1,854 MT by 2024.” He believes that this bodes well for graphite electrodes demand. 

Sanghav is also optimistic about the shift of steel manufacturer’s towards the Electric Arc Furnace (EAF) process. He expects this transition to drive sustainable demand for graphite electrodes in the long term. The analyst emphasises that this environmental-friendly process will attract companies looking to reduce their carbon footprint. 

4. Angel One: ICICI Securities maintains its 'Buy' rating on this capital markets company, setting a target price of Rs 1,590. This implies a potential upside of 6.5%. In Q4FY23, the company delivered a YoY growth of 30.4% amounting to Rs 266.9 crore as net profit, accompanied by a 23% increase in revenue. For Q1FY24, they forecast a net profit of Rs 230 crore, taking into account the company's strong performance in May 2023.

Analysts Ansuman Deb and Ravin Kurwa maintain a positive outlook on the company due to its digital business model, which allows it to sustain higher revenue from clients in the post-acquisition years. Moreover, the company has established a strong track record in terms of order volume, experiencing a growth of 2.3 times over the past two years. As of May 2023, it holds a retail volume share of 24%.

Deb and Kurwa believe that Angle One's super-app will be instrumental in achieving market leadership and enhancing customer lifecycle value. They forecast an earnings CAGR of 16% over FY23-25, with an expected profit after tax of Rs 1,150 crore in FY25.

5. Trent: Motilal Oswal maintains its ‘Buy’ rating on this retail company with a target price of Rs 1,835. This implies an upside of 8.9%. In Q4FY23, the firm’s net profit jumped 337.5X YoY to Rs 54.2 crore and revenue surged by 64.3%.

Analysts Aliasgar Shakir, Harsh Gokalgandhi and Tanmay Gupta note that despite muted discretionary demand, Trent has outperformed its peers. They also see the firm’s ability to manage its balance sheet effectively, even with aggressive store additions, as a key positive. The analysts add, “There are near-term growth headwinds given the high pent-up base and demand weakness, but Trent continues to outperform its peers and offers a huge runway for growth over the next three-to-five years.”

Shakir, Gokalgandhi and Gupta expect the company’s gross margins to improve in the coming quarters on the back of falling raw material costs. Overall, they believe Trent will maintain its growth trajectory, supported by strong same-store-sales growth, productivity, healthy footprint additions, and Zudio’s strong brand value. The analysts expect the firm’s revenue to grow at a CAGR of 28.9% over FY23-25. 

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

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