
1. UltraTech Cement:
ICICI Direct maintains a ‘Buy’ rating on this cement manufacturer with a target price of Rs 12,430. This indicates a potential upside of 27.1%. In Q4FY24, the company’s revenue went up by 9.4% YoY to Rs 20,554.6 crore, and its net profit increased 35.6% YoY to Rs 2,258.1 crore. This surge in profit was on the back of improved EBITDA per ton at Rs 1,089 in FY24 from Rs 1,005 a year ago. The company reported volume growth of 13% YoY in FY24.
Analysts Vijay Goel and Ankit Shah expect EBITDA per ton to further improve to Rs 1,255 by FY26. They expect further cost reduction of Rs 200-300 per ton leading to improvement in EBITDA over the next three years. They attribute this development to be led by higher usage of low-cost energy from renewable sources and optimising freight costs. They forecast that volumes will grow from 119.1 million tonnes per annum (mtpa) in FY24 to 144 mtpa by FY26 due to capacity expansion of 21.5 mtpa. Analyst Goel and Shah say, “UltraTech is strongly placed to benefit from its aggressive capacity addition plans and its focus on further reducing its cost structure.” Goel and Shah also estimate revenue to grow at 10.8% CAGR over the same period.
2. Maruti Suzuki India:
KR Choksey maintains its ‘Buy’ call on this car manufacturer with a target price of Rs 14,975, indicating an upside of 20.4%. In Q4FY24, Maruti Suzuki reported a 48% YoY growth in its net profit to Rs 3,952.3 crore, while its revenue grew by 20.9% YoY. It sold 5.8 lakh units during the quarter, up by 13.4% YoY. Analyst Unnati Jadhav says, “Maruti Suzuki’s volume growth in terms of domestic business and exports was better than the industry’s.”
Jadhav says that the sequential decline in average realizations led to slightly lower revenue, 1.5% lower than estimated, while sequential gross margin pressure led to lower-than-estimated EBITDA and margin.
However, the analyst continues to be positive about the firm’s growth due to its capex plans in the medium term, focus on high-demand spaces (SUVs, CNG, and hybrids) along with penetration in electric vehicles, and strength in export markets. She expects margins to be largely steady on the back of better realization and cost reduction. She estimates a revenue and profit CAGR of 12.6% each over FY25-FY26.
3. Ajanta Pharma:
BOB Capital Markets maintains a ‘Buy’ call on this pharma company with a target price of Rs 2,585, indicating an upside of 7.1%. In Q4FY24, the company’s profit rose 65.8% YoY to Rs 202.7 crore while revenue increased by 18.6% YoY. The analyst Saad Shaikh says that the growth was led by a reduction in API prices, logistics costs and tailwinds from increased product shortages in the US.
Shaikh is optimistic about the firm because it has 22 products awaiting US FDA approval, and expects to launch six to eight products in FY25. He believes this will lead to an overall growth of 5-8% in the US business. In India, the analyst expects the company to maintain a 200-300 basis points outperformance over the Indian pharma market for FY25.
Although Ajanta’s management expects logistics costs to escalate due to the ongoing Red Sea crisis, Shaikh says that the EBITDA margin should hold at its current level in FY25. He anticipates Ajanta Pharma achieving a 13% revenue CAGR over FY25-FY26, driven by its continued outperformance over the Indian Pharma Market (IPM), recovery in the US, strong growth in recent quarters, and a good outlook due to the launch of new products.
4. KPIT Technologies:
Axis Direct maintains a ‘Buy’ rating on this IT consulting firm with a target price of Rs 1,750. This indicates a potential upside of 15.6%. In Q4FY24, the company’s revenue increased 30.4% YoY to Rs 1,334.4 crore, while its net profit rose by 47.3% YoY to Rs 164.4 crore. Analyst Omkar Tanksale says, “Strong revenue growth momentum will continue backed by robust deal wins and strong addition of capabilities.”
Tanksale is upbeat as the company outperformed its estimates on all fronts. He attributes this quarter’s 10 bps rise in profit margin to strong volume growth and a favourable currency mix. He is also positive about future revenue visibility as the company has multiple long-term contracts with the world’s leading automotive players. Tanksale expects KPIT to be one of the fastest-growing companies in Indian IT services moving forward.
5. Poonawalla Fincorp:
Motilal Oswal reiterates a ‘Buy’ call on this finance company with a target price of Rs 570. This indicates an upside of 19.2%. In Q4FY24, the company’s net profit rose 83.6% YoY to Rs 331.7 crore (beating the brokerage’s estimate) and its net interest income increased by 48% YoY (in-line with the brokerage’s estimates).
Analysts Abhijit Tibrewal, Gautam Rawtani and Nitin Aggarwal say, “Poonawalla Fincorp is committed to boosting its productivity through digitization and is preparing for growth by introducing new products such as co-branded credit cards (to be launched in the next 2-3 weeks).” The analysts say that the company has laid down a robust foundation for sustainable profitability through initiatives that will lead to lower operating costs, higher business volumes, and robust asset quality.
The analysts estimate AUM and profit growth of 37% and 39% CAGR over FY25-FY26. They believe that the segments focused by the firm, namely consumer and small business finance, have a huge market opportunity and expect the firm to maintain its NIM of more than 9% over FY25-FY26.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
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