1. UNO Minda:
Geojit BNP Paribas maintains its ‘Buy’ call on this auto parts manufacturer with a target price of Rs 792, indicating an upside of 24.7%. Analyst Saji John says that Q3FY24 revenue exceeded expectations, fuelled by growth across all segments. Revenue has grown by 20.9% YoY, while profit increased by 19.4% YoY to Rs 193.5 crore.
John says, “Despite near-term challenges from reduced volumes and macroeconomic headwinds, we believe the stability in commodity prices and chip supplies augurs well for the company.” He points out that the company is in the process of expansion of its existing product portfolio from lighting, acoustics etc to areas like seating, and adding new product lines. The annual order value from EV OEM is Rs.3,292 crore.
The analyst points out that UNO Minda’s product diversification and the success of new products enhance its visibility. He forecasts a revenue growth of 17% CAGR over FY24-26, considering the expected stability in demand, diversification efforts, and an increase in content per vehicle.
2. Kalpataru Projects International:
Sharekhan maintains a ‘Buy’ rating on this construction and engineering company with a target price of Rs 1,140, indicating an upside of 14%. Analysts at Sharekhan say, “Kalpataru Projects’ robust order book and tender pipeline, merger synergies, and easing cost headwinds should improve performance.”
The analysts are upbeat as Kalpataru’s current order book stands at an all-time high of Rs 51,753 crore. The management also expects an order inflow of over Rs 6,000 crore during Q4FY24. Saudi Aramco has reportedly issued a letter of intent for about 16 engineering, procurement and construction packages worth $10 billion for the expansion of its Master Gas System. The analysts are optimistic about the company’s chances of securing the lowest bid for three of these packages.
The company’s entry into new projects such as underground tunneling and construction of data centers, airports, and industrial plants is likely to help growth momentum. The analysts forecast net sales to grow at a CAGR of 11.8% over FY24-26.
3. Pitti Engineering:
KR Choksey maintains a ‘Buy’ rating on this small-cap electrical equipment manufacturer with a target price of Rs 1,027. This indicates an upside of 30.6%. In Q3FY24, the company’s revenue rose by 24.2% YoY to Rs 296.9 crore, while its net profit increased 9.8% YoY. However, the EBITDA margin fell 130 bps YoY to 15%. Analyst Unnati Jadhav believes that moderation in profitability was due to staffing ahead of capex deployment.
Jadhav highlights the 25.4% QoQ growth in the company's order book to Rs 898 crore due to new orders from sectors such as rail, wind energy, and power. She says, “Increasing exposure to high growth sectors could propel future prospects.”
Jadhav is upbeat about the ongoing capex of Rs 120 crore, with Rs 85 crore already spent in the past nine months. She expects the company’s merger with Pitti Rail to boost margins, driven by a 19% volume expansion. Jadhav forecasts a revenue CAGR of 13.8% and a net profit CAGR of 36.5% over FY24-26.
4. Aurobindo Pharma:
Axis Direct recommends a ‘Buy’ call on this pharma company with a target price of Rs 1,185, indicating an upside of 10%. In Q3FY24, the company reported a 90.6% YoY growth in profit to Rs 936.3 crore, beating the brokerage’s estimate by 12.6%, Its revenue also increased by 15.6% in the same period. Analyst Neeraj Chadawar and his team attribute this growth to stable demand and new product launches. They say, “Aurobindo's diverse range of approved products has enabled it to effectively manage price erosion, maintaining a neutral impact overall.”
Going forward, the analysts are optimistic about the potential of the new China plant and Vizag plant to boost injectable supplies in the Europe market, contributing to mid-teen margin improvements. They are also positive about the growth from generic injectables Eugia, which currently brings in $520 million, and the launch of Pen-G API, expected to add $100-150 million in external sales in FY25-26).
On the back of changes in the product mix and a decrease in raw material costs, the analysts estimate the EBITDA to be in the range of 18% to 20% from FY24 to FY26.
5. Union Bank of India:
ICICI Direct assigns a ‘Buy’ call on this bank, with a target price of Rs 180. This indicates an upside of 15.4%. Analyst Vishal Narnolia says, “Union Bank of India has delivered steady growth during 9MFY24, with gains spread across all segments.” He expects an improved balance sheet, capital adequacy, and healthy liabilities to support the bank’s business expansion efforts and digital enhancement plans.
Narnolia predicts stable margins at 2.9-3% in FY24-26, driven by healthy CASA at 34.4% of deposits, repricing of deposits, and recent capital raising. He believes that the moderation in slippages and healthy coverage at 92.5% will keep credit costs low, which should gradually improve the return on assets (RoA) to 1-1.1% in FY24-26. The bank’s management is optimistic about further declines in non-performing assets (NPAs).
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
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