1. NMDC:
ICICI Direct assigns a ‘Buy’ rating on this mining company with a target price of Rs 325, indicating a potential upside of 29.2%. In FY24, the company’s revenue grew 23% YoY to Rs 22,678.7 crore due to higher average selling price, while the net profit marginally declined by 0.47% YoY to Rs 5,575 crore due to higher operational expenses.
Analysts Shashank Kanodia and Manisha Kesari say, “NMDC is exploring opportunities in other minerals such as bauxite, gold, diamond, lithium, and copper, both in India and overseas.” The analysts highlight the company’s plans to begin operations at the Rohne coal block with a capacity of 8 metric tonne (MT) within 24 months. NMDC has also commissioned an Australian gold mine, and is set to conclude a feasibility study for magnetite and lithium within the next 12-18 months.
Kanodia and Kesari note that the company expects to increase its sales volume from 41 MT in FY24 to 50 MT in FY25 and 54 MT in FY26, and aims to achieve 100 MT of iron ore production by FY31 with a total investment of approx Rs 50,000 crore for slurry pipelines, a pellet plant, and other infrastructure.
2. Bharti Airtel:
Sharekhan maintains a ‘Buy’ rating on this telecom services company, raising its target price to Rs 1,680, indicating a potential upside of 15.6%. The analysts highlight Airtel's industry-leading ARPU, revenue market share (RMS) gains, and its favorable position to benefit from expected tariff hikes over FY25-26.
Bharti Airtel has improved its revenue market share to 37.9% in FY24 from 36.5% in FY23, narrowing the gap with Reliance Jio. Analysts expect that the 15-20% tariff hikes post the telecom spectrum auction, will aid revenue growth. The company anticipates significant free cash flow improvement due to a capex decline in FY25 after high spending in FY24. Vodafone Idea's expected 5G launch may impact subscriber gains, making tariff hikes crucial for sustained growth. However, Airtel’s focus on premiumization and rural expansion supports its positive growth outlook.
Sharekhan expects Airtel's strong growth momentum in various segments to continue. It anticipates the firm to post a revenue CAGR of 14.3% and an adjusted net profit CAGR of 47.4% over FY25-26.
3. Inox Wind:
Axis Direct initiates a ‘Buy’ rating on this electric utilities company with a target price of Rs 185, indicating a potential upside of 29%. Analysts Aditya Welekar and Darsh Solanki note that from 2019 to 2024, the company incurred losses primarily due to lower execution in wind energy projects. This was due to new auction rules in 2018 and the impact of the pandemic in 2021-2022.
The analysts highlight that as of 31st March 2024, the company has a strong order book of 2.7 GW, ensuring sales for the next 2.5 years along with multiple independent power producers and commercial and industrial orders in the pipeline which are at “advanced stages of closure”.
The analysts anticipate the company to return to profitability from FY25. They expect a revenue/EBITDA CAGR of 75% for FY 25-27. PAT is expected to increase to Rs 1,081 crore by FY27, from a loss of Rs 51 crore in FY24 with a forecasted EBITDA margin of 15% in line with the company's guidance of 14-15% for FY 25-27.
4. Hindustan Unilever:
Motilal Oswal maintains a ‘Buy’ rating on this personal products company with a target price of Rs 2,900, indicating a potential upside of 15.6%. Analysts Naveen Trivedi, Pratik Prajapati and Tanu Jindal note that in FY24, the company's revenue increased only by 2% to Rs 619 billion due to the challenging business environment and increasing competition from regional and D2C brands. The company saw a gradual decrease in commodity prices across all its products after a long period of high inflation.
Analysts highlight HUL’s effort to compete more effectively in a changing retail market, and its transition from the traditional step-by-step business model to an approach where consumers, customers, and operations are more closely integrated, with the help of data-driven technology solutions. They note that approximately 30% of its digital demand is now generated through platforms like the Shikhar app, e-commerce channels, and D2C websites.
Analysts Trivedi, Prajapati, and Jindal note that the company has been introducing new product variants and upgrades. Hindustan Unilever is particularly focusing on liquid formulations in fabric care and dishwashing segments to meet increasing consumer demand in these segments.
5. Olectra Greentech:
Geojit upgrades this commercial vehicle manufacturer to a ‘Buy’ with a target price of Rs 2,086, indicating a potential upside of 13.4%. The company saw its revenue drop 23% YoY to Rs 293.6 crore in Q4FY24 due to new battery norms and execution delays, while it increased moderately by 5.9% in FY24. Despite this, Olectra Greentech (OGL) remains optimistic about its future growth prospects in the expanding electric vehicle market.
The company plans to establish a new greenfield EV manufacturing facility in Telangana, starting with an annual capacity of 5,000 vehicles expandable to 10,000. OGL currently holds 10,966 electric bus orders in its order book. Analyst Anil R is optimistic about the firm's strategic JV with BYD China for electric buses and entry into electric truck tippers and hydrogen buses, which it hopes will strengthen its position in the growing EV market. Expansion into new segments aligns with OGL's strategy to diversify its product portfolio and capitalize on the increasing demand for sustainable, and cheaper transportation solutions.
Anil expects Olectra's alignment with the government's carbon-free emission goals and robust State Transport Undertaking (STU) partnerships to drive future growth. He anticipates the firm to post a revenue CAGR of 77.7% and an adjusted net profit CAGR of 101% over FY25-26, helped by its technological advancements in the EV sector.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
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