1. Indo Count Industries:
Edelweiss maintains a ‘Buy’ call on this textiles company with a target price of Rs 430. This indicates an upside of 33.2%. Analyst Palash Kawale met with the company’s management to get a sense of its growth plans and dynamics. He says, “The company aims to double revenue over the next three to four years with margin expansion. Its focus is on a strong clientele, expanding product bouquet, entry into new export markets, and shift in the product mix towards premium products.”
Kawale is optimistic about Indo Count due to its aggressive capex and its capacity expansion to 153 million metres from 90 million metres in the past few years. He is also positive about the textile export aspect in the medium-to-long term, as the United States (US) banned cotton imports from China, and believes that the firm will gain market share as India fills the void. As a result, the analyst expects a volume CAGR of 17% over FY24-26, and expects revenue to grow at a CAGR of 15% during the same period.
2. IDFC First Bank:
BOB Capital Markets assigns a ‘Buy’ call to this bank with a target price of Rs 96, indicating an upside of 23.2%. Analyst Ajit Agrawal says, “Since its merger with IDFC, IDFC First Bank has delivered strong business growth with a focus on reducing high-cost funds to improve margins.” The analyst expects strategic growth in the loan book to be driven by the SME and retail portfolios, which will aid net interest margins (NIM). The management however, has guided for the NIM to stay at the current level.
The bank’s guidance for credit and deposit growth are at 20% and 25% CAGR respectively over FY24-FY29, while Agrawal expects it to grow at 24% and 31%, respectively over FY24-FY26. In his view, a strategic realignment of the balance sheet will improve the overall performance of the bank. He expects better operational efficiencies to boost ROA and ROE to 1.4% and 14% respectively, in FY26.
3. Finolex Cables:
Geojit BNP Paribas maintains a ‘Buy’ rating on this electrical products manufacturer with a target price of Rs 1,019 indicating an upside of 16.2%. In Q3FY24, the company’s revenue went up by 7.1% YoY to Rs 1,266.7 crore while its net profit declined marginally by 2.2% YoY to Rs 151 crore.
Analysts at Geojit BNP Paribas attribute this decline to lower contributions from the construction wires segment. They also note that its communication cable segment declined 8% YoY due to delays in the BharatNet project. However, they believe that the tendering process will conclude in Q4FY24 and expect revenue to be generated from H1FY25.
The analysts are upbeat as gross margins improved 70 bps YoY to 21.4%, despite a 2.7% increase in raw material cost. They expect that an increase in capacity utilization led by stable demand from infra and construction will improve profitability. For FY24-26, they expect the company’s EBITDA margin to be above 12%. They also expect Finolex’s net profit to grow at a rate of 18% YoY for FY24-26.
4. Brigade Enterprises:
ICICI Direct maintains a ‘Buy’ rating on this realty company with a target price of Rs 1,100, indicating an upside of 28.7%. Analyst Bhupendra Tiwary is optimistic as Brigade’s sales volume increased 9.6% YoY to 1.7 million square feet (msf). At the same time, its sales in value terms improved 38.6% YoY to Rs 1,400 crore. This was driven by the launches of 2.7 msf in Bengaluru.
Given the company's strong pipeline, Tiwary expects launches of 10.8 msf in the next four quarters with a gross development value of over Rs 10,000 crore. He also expects a potential revenue of Rs 2,000 crore from Brigade’s joint development agreement with PVP Ventures to develop a 2.5 msf residential project in Chennai.
Tiwary is optimistic given the company’s leasing portfolio of 8.7 msf, with occupancy above 95%. He is upbeat as Brigade is looking to expand its rental portfolio by five msf (57.5% growth). He also expects the company to add 1,200 keys (81.4% growth) to its existing hospitality portfolio of 1,474 keys, by adding four new hotels. Tiwary is positive as the company has a debt-free residential segment, while 90% of its debt in leasing and hospitality is securitised. He expects overall sales at 18% CAGR over FY24-26.
5. Apollo Tyres:
Sharekhan maintains a ‘Buy’ rating on this auto tyres manufacturer with a target price of Rs 619, indicating an upside of 35.1%. Analysts at Sharekhan say, “As the company focuses on premiumisation, we expect bottomline growth to surpass topline growth in the next two years.” They are optimistic as the company has reported EBITDA margins above 18% in the last two quarters. This is mainly due to the company’s focus on improving product mix.
The analysts expect the company to improve its capacity utilization, currently at 75% before considering any large greenfield projects in 2026. They believe that higher penetration in the commercial vehicles segment and decline in revenue contribution from small-size tyres used in passenger vehicles have resulted in a better product mix leading to higher profitability.
Another positive is the company’s focus on profitable volume growth. The analysts expect the company’s cost-effective production and focus on premiumisation to support profitability levels.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
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