1. Dalmia Bharat:

BOB Capital Markets upgrades this cement products manufacturer to ‘Buy’ with a target price of Rs 2,443. This indicates an upside of 22.7%. Analysts Milind Raginwar and Shree Kirloskar say, “Dalmia Bharat is set to tap growth opportunities by consolidating its India presence, and its plans to address shortages by enhancing capacity in its major regions.” They expect the company’s market share to grow in FY25-26. 

Dalmia Bharat plans to enhance capacity utilisation to 27.1 million tonnes in FY26 from 22.9 million tonnes currently. It also plans to raise cement capacity by 13.3% to 49.5 million tonnes in FY26. The analysts are also optimistic about the company due to its plans to enhance its alternative energy sources. Raginwar and Kirloskar expect these measures to improve EBITDA margin by 4.7% points to 21.7% in FY26.

Given its healthy margins, focus on calibrated growth and limited balance sheet stress, the analysts believe that Dalmia Bharat is poised for sustained growth.

2. Birlasoft:

Sharekhan maintains a ‘Buy’ call on this IT consulting and software company with a target price of Rs 950. This indicates an upside of 24.7%. The analysts at Sharekhan met the company’s management to get an update on its outlook and growth plans. They say, “Birlasoft remains well placed to deliver top-quartile performance, guided by a revamped management, a robust order book and deal ramp-ups.” They believe that the company is witnessing a decent flow of cost take-out deals, which should drive a rebound in new deals after the moderation in Q3FY24.

With the senior leadership hiring complete, the analysts are positive that the management is focused on agile growth. They say that it is investing in emerging technologies such as generative AI along with scaling up its existing capabilities in Microsoft Azure, AWS, GCP, and Cloud platforms. 

The analysts expect 15% and 23% CAGR growth in sales and profit respectively, over FY25-26. 

3. BSE:

HDFC Securities maintains a ‘Buy’ call on this exchange with a target price of Rs 3,050. This indicates an upside of 12.6%.  Analyst Amit Chandra says, “BSE has attained a 20% and 7% notional and premium market share, respectively, largely driven by the rising popularity of its derivatives contracts.” He is optimistic as the Sensex weekly contract has been a success, and Bankex is gaining strength. The analyst believes that BSE derivatives will continue to grow, with the growth led by the scaling of the Bankex contract, a higher volume of proprietary traders, and greater participation of Foreign Portfolio Investors. 

Chandra believes that the core settlement guarantee fund (SGF) pool is increasing across exchanges, led by regulatory initiatives to mitigate risk. Also, the settlement costs for BSE are 2.5X that of NSE. The analysts expect SGF and settlement costs to fall gradually as economies of scale come into play. Assuming an 11% market share in premium in FY26, the analyst expects derivatives to contribute 43% of the company’s total revenue. He expects a revenue CAGR of 34% over FY25-26, led by a revival in transaction revenue. 

4. Sagar Cements:

Geojit BNP Paribas upgrades this cement products manufacturer to ‘Buy’ with a target price of Rs 246, indicating an upside of 11.6%. The company’s Q3FY24 revenue grew by 16% YoY, which the analyst Vincent Andrews believes was aided by volume growth of 14% YoY and realisation growth of 2.4% YoY. However, capacity utilisation was lower due to state elections, floods and festivals. The analyst reduces volume guidance for FY24 due to low capacity utilisation but expects an improvement in capacity utilisation over the next financial year.

Andrews expects margin improvement, supported by a ramp-up in recently acquired units, improvement in the green power mix, and deployment of electric trucks and wheel loaders. He believes that the healthy demand outlook, given the strong government focus on infrastructure along with the company’s consistent focus on lowering costs and improving operational efficiencies, will aid growth and margins. The analyst expects revenue to grow at a 17% CAGR over FY25-26.

5. South Indian Bank:

ICICI Direct recommends a ‘Buy’ call on this bank with a target price of Rs 35, indicating an upside of 19.5%. The analyst Vishal Narnolia says, “Post restructuring, the bank now is focused on a five-step strategy to steer its growth and profitability.” According to him, this ‘five-step strategy’ includes a focus on accelerating growth in MSME and retail portfolios, improving branch productivity, and lowering a relatively higher cost-to-income ratio. The other two steps are sourcing new business through partnerships and enhancing compliance architecture.

Narnolia believes that focusing on MSME and retail loans will improve margins. He also notes that a healthy liabilities franchise, recent capital raising and scope to increase the credit-to-deposit ratio will keep margins steady. He expects advances to grow at 13% CAGR over FY25-26. He concludes, “With business transformation imbibed and new competitive leadership, the current trajectory of business restructuring is expected to continue.”

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

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