1. Sansera Engineering:

ICICI Direct maintains its 'Buy' rating on this auto parts and equipment company with a target price of Rs 1,100, indicating an upside of 19.7%. Analyst Shashank Kanodia views the company's robust order book, standing at Rs 1,930 crore, as a key growth driver and foresees double-digit growth in FY23-25. He expects this growth to be driven by the China+1 strategy and the vehicle light-weighting trend.

Kanodia points to the company's strong order inflow of Rs 600 crore in incremental orders during H1FY24, with 58% earmarked for exports to global markets. He believes that the company aims to reduce its reliance on ICE (Internal Combustion Engine) sales to 60% from the current 78%, de-risking its portfolio.

Since the post-COVID lows, the company's sales have seen a 17% CAGR over FY20-23, consistently outperforming the domestic automobile sector. Kanodia emphasizes Sansera’s strong order book, driven by export wins and enduring client relationships. With precision engineering capabilities and a new manufacturing plant focusing on aerospace and defence, Kanodia believes the company is well-positioned to surpass industry growth.

2. Bajaj Auto:

KRChoksey upgrades its rating on this vehicle manufacturer to ‘Buy’ from ‘Accumulate’ with a target price of Rs 7,093, indicating an upside of 13.4%. Analyst Unnati Jadhav says, “Domestic sales were on a very strong footing during this year’s festive season.” During September-November 2023, two-wheeler volumes grew by 26.6% YoY, while domestic commercial vehicle (CV) volumes increased by 44.2% YoY. According to Jadhav, exports remained under pressure YoY but have seen gradual sequential improvement. 

Jadhav adds that the unexpected uptick in demand for Triumph in the premium segment will contribute to volumes, and improve the mix as Bajaj Auto expands its capacity and distribution. She expects the strong growth trajectory in the CV segment to continue on the back of  CNG and electric vehicle penetration. She projects the company’s revenue, EBITDA and profit to grow at a CAGR of 15.9%, 19.3% and 16.4%, respectively, over FY24-26. 

3. One97 Communications:

Motilal Oswal maintains its ‘buy’ rating on this internet software and services company with a target price of Rs 1,025, implying an upside of 63.2%. Due to Paytm’s history of negative earnings, its durability score is low. But analysts Nitin Aggarwal, Disha Singhal and Dixit Sankharva believe that the increase in high-ticket personal and merchant loan disbursals and an expanding number of lending partners will support steady growth in the near term. The analysts have maintained their rating even as Paytm’s share price fell 19% on Monday. 

Due to asset quality concerns, the firm recently discontinued its postpaid product, Buy Now Pay Later (BNPL), which accounted for 56% of total disbursements. It has also shifted focus away from personal loans below Rs 50,000. As a result, the firm’s management expects a 25% reduction in its monthly total disbursement rate to Rs 4,500 crore, and a 50% decline in customer acquisition in Q3FY24 to 4,00,000.

However, the analysts believe the surge in high-ticket personal loan disbursals could offset the impact. Paytm’s management has insisted that the recent RBI decision to increase risk weight will not impact its growth, thanks to its robust network of partners.

4. Polycab India:

Bank of Baroda maintains its 'Buy' rating on this electrical equipment/products company, setting a target price of Rs 6,100. This indicates 8.2% upside. Analysts Vinod Chari, Arshia Khosla, and Swati Jhunjhunwala express optimism even as the company unveils a new brand logo, to emphasize its leadership in wires, cables, and fast-moving electrical goods.

Following a 33% YoY revenue growth in H1FY24, the analysts expect this momentum to continue into H2FY24, driven by favourable demand and market conditions. They foresee growth in the B2C business (currently at 33%), with improved margins. The planned capex of Rs 700 crore for an extra-high voltage cable facility aligns with its positive outlook.

Chari, Khosla, and Jhunjhunwala predict that Polycab will soon meet its 10% topline growth target, having already reached 9.3% in Q2FY24. They believe that the company’s efforts to improve its export potential and streamline operations will contribute to achieving its growth targets. 

5. Cyient:

Axis Direct maintains its ‘Buy’ call on this IT consulting and software company with a target price of Rs 2,195. This indicates an upside of 10.7%. The company’s management has highlighted its focus on consistent growth, projecting strong double-digit growth in FY25. They expect operating margins to improve with volume growth, cost optimization efforts, and better pricing. Analyst Omkar Tanksale believes that it has developed robust capabilities and domain expertise to improve client engagement and service portfolio.

Tanksale remains confident due to Cyient’s improved outlook on the vertical business and better collaborations with customers. The analyst believes that Boeing’s interest in partnering with large engineering services players specialising in aerospace bodes well for Cyient. He remains optimistic overall, citing “strong growth potential backed by robust deal wins and superior execution capabilities.”

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

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