1. Mishra Dhatu Nigam:
ICICI Direct maintains a ‘Buy’ rating on this defence stock with a target price of Rs 600, indicating a potential upside of 14.9%. Analysts Chirag Shah and Vijay Goel note that the company uses advanced manufacturing to develop a variety of special metals and alloys (like titanium, steel, and super alloys based on nickel, iron, and cobalt) for the defence, space, and energy sectors.
Analysts observe that as of the end of May 2024, the company has an order backlog of Rs 1,767 crore, approximately 1.7 times the FY24 revenues. About 78% is from the defence sector, 12% from space, 5% from exports, and 5% from other areas. This distribution ensures strong revenue growth visibility for the next two years. The company anticipates an order inflow of Rs 1,150 crore in FY25, building on Rs 1,322 crore worth of orders received in FY24.
Analysts Shah and Goel anticipate that the company's operational performance will improve substantially in the coming quarters, led by improvements in supply chain and inventory management. For the FY 25-26 period, they expect a CAGR of revenue/EBITDA and PAT at 23%, 41%, and 57%, respectively.
2. Supreme Industries:
Sharekhan maintains a ‘Buy’ rating on this plastic products company with a higher target price of Rs 6,850, indicating a potential upside of 15.5%. Supreme Industries (SIL) saw its overall volumes rise 22% YoY, with plastic pipe volumes up 27% in April-May 2024.
The analysts foresee strong growth potential for SIL through capacity expansions and product diversification. SIL plans to expand its manufacturing capabilities by adding three new greenfield sites, bolstering its piping system capacity to 10.5 LTPA and plastic pipe system capacities to 8.4 LTPA by FY25 end. It has a committed capex of Rs 1,500 crore, covering ongoing projects and new expansions. The company's focus includes enhancing its product portfolio in protective packaging and valves, and advancing renewable energy initiatives to meet 30% of energy requirements through renewable sources by March 2025.
Sharekhan anticipates SIL to benefit from sustained agriculture and infrastructure demand and stabilized PVC prices. It projects a revenue CAGR of 17% and an adjusted PAT CAGR of 18.7% over FY25-27, driven by the company's internal funding for aggressive expansions.
3. Dabur India:
BOB Capital maintains a ‘Buy’ rating on this personal products company, with an upgraded target price of Rs 742. This indicates a potential upside of 18.8%. Dabur’s Q1FY25 business update showed sales growth of mid to high single digits, with domestic volumes improving and earnings slightly ahead of sales growth.
Dabur plans to accelerate sales growth through FY25, supported by government initiatives and improving rural demand post-monsoon. Analyst Lokesh Gusain has a positive outlook on Dabur and expects domestic volumes to improve further, and gross margins to expand due to stable commodity prices. The company is focused on enhancing its home and personal care (HPC) and Healthcare segments, which saw high single-digit volume growth. Dabur is also expanding its international market presence, despite currency challenges in Turkey and Egypt.
Analyst Gusain highlights that Dabur's focus on "natural" products positions it well to benefit from rural recovery, as demand in this segment grows. He projects a revenue CAGR of 11.1% and an adjusted PAT CAGR of 12.4% over FY25-26.
4. BLS International:
Edelweiss initiates a ‘Buy’ rating on this travel services firm, with a target price of Rs 518, indicating a potential upside of 36.1%. The company’s revenue grew 7.6% YoY to Rs 3,677 crore in FY24, and its net profit rose 50% YoY to Rs 313 crore, supported by strong demand in housing and infrastructure sectors.
As the travel sector booms, BLS International plans to grow its visa and consular services by integrating new technologies. The company is looking to expand its global footprint, particularly in Europe and North America. Analyst Nikhil Shetty is upbeat about BLSIN's cost-effective approach in offering government-to-citizen (G2C) services and managing banking correspondence. Reduction in operational expenses and tech adoption is expected to drive profitability for the company, and market share gains in the competitive visa outsourcing industry.
Shetty sees potential in BLSIN's strategy to expand digital services and increase touch points across India, and expects this to enhance revenue and profitability in banking correspondence through value-added services (VAS). He sees the firm's profit and revenue growing at a CAGR of 34.8% and 30.1%, respectively, over FY25-26.
5. DOMS Industries:
Axis Direct initiates a ‘Buy’ rating on this commodity printing/stationery company with a target price of Rs 2,670, indicating a potential upside of 18.7%. Analysts Preeyam Tolia and Suhanee Shome say, “The Indian stationery and art material market is projected to grow at a 13% CAGR from FY23 to FY28, reaching Rs 71,600 crore by FY28, from Rs 38,500 crore in FY23.” DOMS Industries held a market share of 13% in FY23.
The analysts highlight the company’s acquisition of a new 44-acre greenfield facility, which should support future growth. The company is focused on launching new products such as bags and toys and is expanding into the larger pens market instead of small pencil segments by maintaining a strategic partnership with FILA for global reach and R&D capabilities.
Tolia and Shome expect the company to achieve CAGR growth rates of 25% for revenue, 26% for EBITDA, and 28% for PAT from FY25 to FY27. They expect EBITDA margins to range between 17% and 18% during FY 25-27, with ROCE increasing to 25% in FY27 from 22% in FY24.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
(You can find all analyst picks here)
