1. Endurance Technologies:
Hem Securities reiterates a ‘Buy’ call on this auto parts manufacturer with a target price of Rs 2,219, indicating an upside of 20.8%. Analyst Abhishek Sharda say, “Endurance Technologies has a very strong positioning in the two-wheeler market and it is a very good proxy for the Indian two-wheeler industry.”
Sharda is optimistic about the company due to its strong order wins both in Europe and India. Order wins from India stood at Rs 940 crore in 9MFY24 and orders from Europe were 29 million euro. The analyst expects the orders to peak in FY26.
Sharda believes that the company has a diverse revenue profile in terms of geography, products and vehicles. He also believes that it is ready for the trend shift towards electric vehicles. Sharda expects EBITDA margins to improve on the back of improving capacity utilisation. He concludes, “Endurance Technologies will continue to focus on emerging technologies to grow its portfolio through both organic and inorganic routes.”
2. Coforge:
Sharekhan maintains a ‘Buy’ rating on this IT consulting and software company with a target price of Rs 7,670. This indicates an upside of 42.1%. Analysts at Sharekhan point to the company’s strong order book and large deal pipeline. “The company is well placed to deliver a top quadrant performance in FY25,” they note. Coforge has strong revenue visibility with an order book of $974 million as of Q3FY24 (up 15.8% YoY) to be executed over the next year.
Analysts are also optimistic as the company plans to raise Rs 3,200 crore from qualified institutional placements (QIP). Coforge intends to use these funds purely for mergers and acquisitions. They expect this to help the company quickly expand into new verticals such as cyber security, data services, and cloud operations. They also expect a sharp uptick in Coforge’s EBITDA margins in Q4FY24 owing to deal ramp-ups. Analysts at Sharekhan expect sales and profit CAGR of 17% and 32% respectively over FY24-26.
3. Glenmark Pharmaceuticals:
KRChoksey maintains a ‘Buy’ rating on this pharmaceutical company with a target price of Rs 1,266, indicating an upside of 21.3%. Analyst Unnati Jadhav is upbeat as the completion of the sale of Glenmark Lifesciences strengthens the balance sheet and earnings prospects of the company. She expects this deal to help Glenmark Pharma to become a ‘brand-led’ organization, with a focus on the core therapeutic areas of dermatology, respiratory, and oncology. She believes the total debt of Rs 4,953 crore will be repaid in FY25 from the proceeds of the deal, which in turn will save finance costs and boost earnings.
Jadhav is optimistic as the company has shown higher than market growth for the months of January and February 2024 for the India pharma market (IPM). While IPM growth was 9.5% YoY for January 2024, Glenmark Pharma grew 20.2% over the same period. In February 2024, the company reported 11.3% YoY growth vs overall IPM growth of 9.0%. She attributes this to changes in the distribution model involving stock point consolidation and channel inventory rationalization in the domestic business. Going forward, Jadhav expects this move to improve Glenmark’s operating margins and working capital.
4. Shalby:
ICICI Direct maintains a ‘Buy’ rating on this healthcare facilities company with a target price of Rs 320, indicating an upside of 18.7%. Analyst Siddhant Khandekar is upbeat as the company introduced the asset-light franchisee model to expand its hospital business into newer geographies. The company owns 10 multispecialty hospitals and 6 franchisee hospitals with a 2,362 bed capacity. Khandekar expects the company to expand its Shalby Centre for Orthopaedic Excellence (SOCE), an asset-light franchisee model, across India. It has established six such models across the country and expects to add 40 more over the next 4-5 years.
Khandekar believes that the company is trading at a cheap valuation compared to other PAN-India players. He is optimistic as the headwinds faced in FY24 in Shalby’s implants business look transitory. The company plans to expand its business beyond the US and India to improve profitability going forward.
5. Man Infraconstruction:
Axis Direct initiates a ‘Buy’ call on this construction and engineering company with a target price of Rs 270. This indicates an upside of 28.8%. Analysts Eesha Shah and Preeyam Tolia are optimistic about the company on the back of its healthy project pipeline and strong execution capabilities.
Man Infraconstruction has invested Rs 700 crore in real estate projects, covering a portfolio of 4.6 million square feet. The firm also maintains zero level of inventory of completed projects. The firm is expected to generate a revenue of Rs 1,343 crore with a net cash surplus of Rs 350 crore in FY24 (whereas its peer, Brigade Enterprises is expected to generate revenue of Rs 4,200 crore with a net debt of Rs 2,140 crore). The analysts believe that this asset-light model for a real estate developer makes it an attractive company in the segment.
The analysts like the company due to its order book and project pipeline. Currently, the firm has 2 million square feet of ongoing projects and 3.7 million square feet of upcoming real estate projects. Its EPC business order book stands at Rs 1,047 crore.
Shah and Tolia say that the company exhibits a very low debt book for a real estate developer. They conclude, “Due to its asset-light business model, it can scale up without significant capital pressure, thereby improving the bottom line in coming years.”
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
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