1. Amara Raja Energy & Mobility:

ICICI Direct reaffirms this auto parts and equipment company as a ‘Buy’ with a target price of Rs 1,200. This indicates an upside of 15.2%. Analyst Shashank Kanodia is bullish about the company’s strong presence in the automotive sector, which contributes 70% to its sales. He is also optimistic as the company has consistently reported better operating margins than its peers. 

Kanodia is positive about the revenue visibility in the new energy space as Amara Raja entered an MoU with the government of Telangana to set up a Li-Ion Battery Gigafactory. He expects the facility to have a cell manufacturing capacity of up to 16 GWh & assembly capacity of up to 5 GWh. This venture involves an estimated investment of Rs 9,500 crore over the next decade. Kanodia is also upbeat as the company has an indirect presence in the new energy segment through its minority stake in Log9 Materials. 

2. Indian Hotels Company:

Sharekhan maintains its ‘Buy’ rating on this hotel company with a target price of Rs 679, indicating an upside of 16%. The analysts point to the room demand being higher compared to supply, thanks to rising demand from domestic travellers and the growth of new tourism segments. Adding to this, the analysts note that demand is continuing to improve with India’s rising prominence in the global tourism market, along with strong support from the government in the form of improved infrastructure and favourable policies.

With good macroeconomic conditions, analysts anticipate average room rentals to grow by 10-12% in FY25. They also note a correlation between airline passenger movement and room demand and expect an increase in room demand alongside rising airline passenger numbers. Sharekhan analysts are positive about the company's plans to accelerate its hotel expansion, targeting the opening of 25 new hotels annually compared to the previous target of 15-20 hotels. In the past quarter, the company’s share price has risen by 22.2% underperforming its industry by 5.6 percentage points. 

3. LT Foods:

Hem Securities initiates a ‘Buy’ call on this agricultural products manufacturer with a target price of Rs 237. This indicates an upside of 13.1%. Analyst Aarushi Lunia says, “We are positive on the future growth prospects of the company on the back of its robust distribution network, strong brand equity and endeavour to enrich its product portfolio by expanding into newer categories.”

Lunia points to LT Foods' expansion in Europe, Mauritius, Denmark, and Slovenia as a green flag. She also believes that the company’s strategic partnership with Saudi Agricultural and Livestock Investment will give boost its future growth plans in the Middle East and Saudi Arabia region, and fortify its position as one of the leading players. 

The analyst notes that the company aims to enhance its product mix with a higher focus on margin-accretive premium basmati export business and plans to scale up new launches in the value-added segment. LT Foods is targeting a five-year revenue CAGR of 10-12%, driven by a focus on expanding its product portfolio, investments in branding, and strengthening its distribution network.

4. Equitas Small Finance Bank:

Motilal Oswal reiterates its ‘Buy’ call on this bank with a target price of Rs 125, indicating an upside of 27%. Analysts Nitin Aggarwal, Dixit Sankharva and Disha Singhal say, “Equitas Small Finance Bank has been delivering consistent performance, with steady improvements in both asset quality and return ratios. It is poised to report steady operating performance, backed by robust loan growth, healthy margins and controlled credit costs.”

The bank has been investing in its business by adding new branches and building digital infrastructure and capabilities, which they believe has kept its operating expenses elevated. They expect the bank to continue investing in its tech capabilities. 

Analysts note that the bank has been focusing on building a diversified loan book, with securities-based lending, vehicle finance, microfinance loans and housing finance being the key business segments. It is focused on growing the unsecured personal loan and credit card segments, and targeting the prime segment to improve its loan mix. The analysts estimate a 22% CAGR in loans and a 26% CAGR in deposits over FY24-26. 

5. HDFC Life Insurance:

Bob Capital Markets maintains its ‘Buy’ call on this life insurance provider but reduces its target price to Rs 775 from Rs 850, indicating an upside of 27.9%. In FY24, the company’s net profit increased by 3.1% YoY to Rs 1,258.2 crore, while revenue grew by 5.5% YoY. 

The company’s value of new business (VNB) fell by 5% YoY to Rs 3,500 crore, with margins decreasing by 130 basis points to 26.3%. Analyst Mohit Mangal notes that the margin decline is due to a one-time fixed cost of Rs 1,000 crore and a higher share of unit-linked insurance plans (ULIPs). He expects the company to report a VNB margin of 26.5% in FY25 and estimates a 17% VNB CAGR over FY24-FY26. The analyst adds, “HDFC Life’s market share (individual APE) decreased to 15.4% YoY at the end of FY24, indicating the company's growth struggles.”

However, Mangal maintains his positive stance on HDFC Life Insurance on the back of its innovative launches, balanced product mix, and increasing demand from tier-2 and tier-3 markets.

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

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