1. ICICI Bank:
KR Choksey maintains a ‘Buy’ rating on this bank with a target price of Rs 1,355, indicating a potential upside of 20.1%. In Q4FY24, the company's revenue surged by 24.6% year on year to Rs 67,181.7 crore, while its net profit grew by 29.2% YoY to Rs 12,728.6 crore. Analyst Unnati Jadhav is optimistic as the bank's performance was in line with expectations. She suggests that lower-than-expected provisions led net profits to rise in Q4, exceeding estimates by 2%.
Jadhav identifies the retail loan segment as a key growth driver for the bank – it recorded significant growth of 19.4% YoY and 3.7% QoQ. The retail loan portfolio constitutes 46.8% of the total portfolio. She anticipates the cost-to-income ratio to rise to 40.5% for FY26 due to ongoing investments in branch expansion and digital banking strategies. Jadhav estimates a profit CAGR of 14.5% over FY25-26, and a 16.4% CAGR in advances.
2. TVS Motor Company:
Geojit BNP Paribas maintains a ‘Buy’ rating on this 2/3-wheeler manufacturer, with a target price of Rs 2,265, indicating an upside of 9.5%. In Q4FY24, the company reported a revenue growth of 23.5% YoY, coming just shy of the Rs. 10k crore mark to Rs 9,999 crore. It also saw a 15.1% YoY increase in its net profit to Rs 387 crore. Analyst Antu Eapen Thomas attributes the Q4FY24 revenue jump to strong volume growth, a superior product mix, and improved realisation.
Thomas notes that the EBITDA margin met their expectations, rising by 105 basis points YoY to 11.3%, supported by softening raw material prices and effective cost control measures. He highlights the company's outperformance compared to its peers in Q4, with market share in the motorcycles segment rising by 50 basis points to 13.7% due to urban commuter growth and a strong product mix in the 125 cc category.
Thomas is optimistic as the company plans to launch several new products ranging from 5KW to 25KW on the EV platform by FY25. He notes that the company aims to expand its dealer network from 400 to 800 by year-end and currently derives 10% of its volume from EVs.
3. KPR Mill:
Sharekhan reiterates its ‘Buy’ rating on this textiles company with a target price of Rs 965, suggesting a potential upside of 19.9%. In Q4FY24, the company's revenue experienced a 12.7% YoY decline to Rs 1,708.6 crore, while net profit increased by 1.9% YoY to Rs 213.6 crore.
Analysts at Sharekhan attribute this rise in net profit to improved EBITDA margins, which increased by 332 basis points YoY to 19.7%. They express optimism as lower raw material costs contributed to a 541 basis points YoY rise in gross margins.
Analysts at Sharkhan note, “In the medium to long term, the China+1 factor, the likely signing of the free trade agreement (FTA) with the UK, and increasing opportunities in the US market provide scope for consistent growth in its high-margin garment business (~40% of the total revenue).” They are bullish on the company as the brownfield capacity addition of 30 million pieces is set to be completed by H1FY25. Following the expansion, analysts expect that the company will produce 40 million pieces per quarter in H1FY25 and 45 million pieces per quarter in H2FY25.
4. Kajaria Ceramics:
ICICI Direct maintains a ‘Buy’ rating on this tiles company with a target price of Rs 1,440, indicating a 24.1% upside. In Q4FY24, the company's revenue grew by 3.5% YoY to Rs 1,258.3 crore. However, its net profit declined by 5.2% YoY to Rs 102.4 crore. Analysts Bhupendra Tiwary and Hammaad Ahmed Ulde attributed this profit decrease to relatively lower tile prices, which impacted margins. During Q4FY24, tile sales volumes increased by 5.5% YoY to 29.6 million square meters (MSM).
Tiwary and Ulde are optimistic as the management outlined a 3-year plan to achieve a volume of 150 million square meters (MSM) of tiles by FY27, implying a volume CAGR of 11.5% and a tiles revenue CAGR of around 11% over FY25-27, reaching Rs 5,500 crore. They note the company’s intentions to expand its presence in tier-II and tier-III cities. Kajaria has indicated that demand recovery is likely post-elections, in Q2FY25. With stable gas prices and benefits driven by operating leverage, they anticipate EBITDA margins to improve to 16% and 16.5% in FY25 and FY26, respectively, from the current 15.3% in FY24.
5. Aarti Drugs:
Axis Direct maintains its 'Buy' rating on this pharmaceutical company with a target price of Rs 570, indicating an upside of 20.8%. In Q4FY24, the company witnessed a 16.4% YoY decline in revenue to Rs 621.1 crore, while its net profit decreased by 15.7% YoY to Rs 47.3 crore. But analyst Ankush Mahajan highlights that the company surpassed expectations on a sequential basis, with a 2.3% revenue growth and 34.4% net profit growth QoQ in the March quarter.
Mahajan is optimistic as the company's gross margins improved by 282 bps QoQ due to a better product mix and declining input costs. He also noted a 227 bps QoQ improvement in EBITDA margin, driven by operating leverage from enhanced capacity utilisation.
Mahajan is also positive as the company announced a greenfield project for dermatology products at its Tarapur facility, with plans to ramp up operations by H1FY25. He expects growth in the API segment due to an anticipated positive shift in the export landscape, supported by likely interest rate cuts, low stock levels, and rising demand.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
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