1. Devyani International:
KRChoksey maintains its ‘Buy’ call on this restaurant chain manager with a target price of Rs 230. This indicates an upside of 19.6%. Analyst Unnati Jadhav remains optimistic about the company with its entry into the Thailand market. Devyani has acquired a controlling interest in Thailand’s Restaurants Development Co for Rs 1,066.1 crore. The analyst notes that chicken is a favourite dish in the region, “Thailand is a strong market for poultry consumption, presenting significant growth opportunities.”
Jadhav is optimistic that this acquisition will position Devyani as a key player in the QSR/LSR market in Thailand and the surrounding region and pave the way for additional growth. While still awaiting the management’s commentary about their growth and profitability plans for the newly acquired business, the analyst retains her estimates. She expects revenue and EBITDA to grow at CAGRs of 22.5% and 21.9%, respectively, for FY24-FY25.
2. JK Lakshmi Cement:
Axis Direct retains its ‘Buy’ call on this cement manufacturer with a target price of Rs 1,000, indicating an upside of 11.9%. Analysts Uttam Srimal and Shikha Doshi say, “Cement demand is expected to remain robust on the back of the government’s infra push, better real estate demand, private capex, and pickup from individual home builders.”
The analysts remain optimistic due to JK Lakshmi Cement’s ongoing capacity expansion. They expect this expansion, along with strategic initiatives, to improve the company’s EBITDA/tonne from the current Rs 700/tonne to Rs 900 and Rs 970 in FY25 and FY26E, respectively. They estimate the company to deliver revenue, EBITDA and profit growth of 10%, 24% and 26% CAGR respectively over FY24-FY26, backed by an 8% volume growth CAGR over the same period. The management is aiming for a 7-8% volume growth CAGR over the next 3-4 years, driven by higher demand and cement consumption.
3. Delhivery:
BP Wealth assigns a ‘Buy’ rating to this logistic services provider with a target price of Rs 450, indicating an upside of 17.6%. Analysts at the brokerage say, “Delhivery's strategic positioning as the most efficient player in the logistics market has poised the company for significant growth in the rapidly expanding e-commerce sector.” They believe that this operational efficiency enables Delhivery to price its offerings competitively.
The analysts are also optimistic about Delhivery's adaptability, underscored by its successful expansion into new markets, and the diversification of its customer base. A key aspect of its strategy is reducing its dependency on its top five customers, which currently account for 40% of its revenues.
They also expect the anticipated growth of over 20% in the third-party logistics space, supported by category expansion, improved return logistics and a focus on tier-2 and 3 cities. They say, “Delhivery's focus on improving its market share and adapting to changing customer preferences positions it as a key player in logistics.”
4. Persistent Systems:
HDFC Securities maintains its 'Buy' rating on this IT consulting and software company with a target price of Rs 8,530, indicating an upside of 15.3%. Analysts Apurva Prasad, Amit Chandra, and Vinesh Vala are upbeat, citing its strength in product engineering services, consistent deal flow, market-share gains over tier-1 competitors, and strategic additions to its senior management. The analysts believe that the recent acquisition of enterprise software platforms of Software AG by IBM and the company's focus on GenAI solutions will boost its growth prospects.
Anticipating improved margins, Prasad, Chandra, and Vala highlight Persistent Systems’ ability to secure deals exceeding $50 million, with a notable focus on managed services and cost optimization. The analysts are confident that the company's expertise in software product engineering will drive market-share gains. New senior management hires from Microsoft, Tech Mahindra and other major players have been key in growing the business and attracting larger clients, helping the company's goal to hit the $2 billion revenue milestone.
5. Manappuram Finance:
Motilal Oswal maintains its 'Buy' rating on this non-banking financial company with a target price of Rs 205, indicating an upside of 19.3%. Analysts Abhijit Tibrewal and Nitin Aggarwal say, "To mitigate the cyclicality in the gold loan segment, the company is actively diversifying into non-gold lending." They anticipate achieving a target 50:50 mix between gold and non-gold businesses and foresee increased gold loan demand due to growth in economic activities.
Tibrewal and Aggarwal expect the company to use data analytics for informed credit decisions, reducing lending risk. They foresee growth in the vehicle loan segment, particularly with the introduction of automated two-wheeler loans. The company’s recent partnership with JCB, venturing into the used equipment business, adds to its vehicle finance portfolio.
With an in-house field collection team and about 94% of customers using NACH (automated payment systems), Tibrewal and Aggarwal expect timely recovery to be a strength. The analysts view the company's diversified geographical presence as an effective de-risking strategy, that will be key to its long-term growth.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
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