1. CIE Automotive India:

Axis Direct maintains its ‘Buy’ rating on this auto part and equipment manufacturer with a target price of Rs 565. This indicates an upside of 22.2%. Analysts Shridhar Kallani and Aditya Welekar say, “The company’s Indian operations are likely to outperform underlying industry growth in the medium term.”

In Q4CY23, the company reported a net profit of Rs 168.9 crore, as against a loss of 657.8 crore in Q4CY22. Meanwhile, its revenue showed only marginal YoY changes. The analysts believe that the subdued revenue growth was due to decreased sales of medium and heavy commercial vehicles and delayed ramp-up of new electric vehicle (EV) export orders.

However, Kallani and Welekar expect growth in the Indian operations to surpass estimates, thanks to increased orders from OEMs (original equipment manufacturers), demand-backed capital expenditure, and overall industry growth. 

The analysts highlight the company’s potential for long-term growth in India and Mexico, led by increased capacities, opportunities for operational efficiency improvements, and a healthy balance sheet. They estimate a revenue CAGR of 9.6% from the Indian operations and 5.7% from European business over CY24-26.

2. Tata Consumer Products:

KRChoksey reiterates its ‘Buy’ rating on this tea and coffee company with a target price of Rs 1,352, indicating an upside of 14.9%. Analyst Unnati Jadhav says, “Tata Consumer’s focus on driving growth through organic and inorganic expansion will lead to double-digit topline growth in the medium-term.” In Q3FY24, the company’s revenue grew 9.7% YoY to Rs 3,863.5 crore, while its net profit decreased 20.7% YoY to Rs 278.9 crore.

Jadhav believes that the decline in net profit was due to exceptional items worth Rs 91.5 crore related to acquisitions and restructuring expenses.

The analyst expects the acquisition of Capital Foods and Organic India to boost profitability, led by superior margins from the acquired business. She foresees revenue growth, backed by distribution expansion, innovation, premiumization and inorganic play. She remains optimistic as the management has indicated current margins of 15% as the new base and expects further expansion. Jadhav forecasts revenue, EBITDA and profit to grow by 13.9%, 21.1% and 24.7% CAGR, respectively, over FY24-26.

3. Va Tech Wabag:

Sharekhan maintains its ‘Buy’ call on this utilities company with a target price of Rs 850, indicating an upside of 6.2%. Analysts at Sharekhan say, “VA Tech Wabag has been exhibiting good operating performance, driven by a better order mix and improved execution efficiencies.” During Q3FY24, the company’s profit improved 33.4% YoY to Rs 62.9 crore. 

Despite divesting two European entities, the company managed to increase its sales by 8.1% YoY to Rs 704 crore, thanks to revenue from new and large projects. 

The analysts remain optimistic about Va Tech Wabag on the back of its robust order book (approx Rs 11,900 crore) and a promising order pipeline. They say, “A well-funded and strong order book with healthy revenue visibility provides comfort in execution and collections going ahead.” They also believe that the company is focused on margin improvement and cash flow generation, which positions it for growth in the medium to long term.

4. Sudarshan Chemical Industries:

ICICI Direct recommends a ‘Buy’ call on this specialty chemicals company with a target price of Rs 705, indicating an upside of 17.1%. In Q3FY24, the company’s profit increased by almost 25x YoY but fell 18.3% QoQ to Rs 14.6 crore, while revenue grew by 7.8% YoY but fell 6% QoQ to Rs 570 crore. Analyst Siddhant Khandekar believes that this YoY growth was led by a 11% increase in domestic pigment sales, which accounts for 49% of total revenues. 

Khandekar is positive about the company due to its “sustained focus on specialty pigments (2/3 of the portfolio), for which it has incurred significant capex”. Sudarshan Chemical has announced the launch of four new pigments in the domestic market and two in export markets. He expects an uptick in margin on the back of improving operating leverage. He also says that the company has visible growth in international markets, especially the US, and opportunities brewing from global consolidations and exits of larger players. 

5. Huhtamaki India:

SBI Securities recommends a ‘Buy’ call on this small-cap containers and packaging company with a target price of Rs 393. This indicates an upside of 11.4%. Analysts from SBI Securities say, “Huhtamaki has an established market position in the premium flexible packaging market, supported by its diversified product range and a strong, diverse customer profile.” They believe that the company has a strong competitive advantage due to its client base, including marquee clients like Colgate Palmolive, GlaxoSmithKline, Pepsico, and Coca-Cola.

The analysts are also optimistic about the company’s move towards sustainable packaging solutions, which is in line with client goals for all packaging to be recyclable by 2030. The analysts like Huhtamaki for its improving financial position, driven by strong operating cash flows. 

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

(You can find all analyst picks here)