1. Varun Beverages:

Motilal Oswal reiterates a ‘Buy’ rating on this non-alcoholic beverages company with a target price of Rs 1,900, indicating a potential upside of 18.8%. Analysts Sumant Kumar, Meet Jain and Omkar Shintre highlight the company's new exclusive snacks deal with PepsiCo for Zimbabwe and Zambia. VBL plans to invest $7 million each in these countries to build snack manufacturing plants capable of producing around 5,000 metric tons annually, with production starting by October 2025 and April 2026, respectively.

The analysts note that the total addressable market (TAM) has expanded by 67% with the addition of these two new geographies (versusMorocco earlier in Feb 2024). They highlight the snack food products market in these regions is valued at approximately $833 million as of CY24.

Kumar, Jain, and Shintre expect a CAGR of 21% in revenue, 22% in EBITDA, and 29% in PAT for CY25-26. They also foresee a potential partnership between VBL and PepsiCo across Africa, where PepsiCo lacks local manufacturing partners and relies on imports.

2. Sky Gold:

Edelweiss maintains a ‘Buy’ rating on this gems & jewellery smallcap company with a target price of Rs 3,204, indicating a potential upside of 68.9%. Sky Gold recently acquired Sparkling Chains for Rs 26 crore, a chain manufacturer accounting for 20% of India's jewellery sales, and Starmangalsutra for Rs 24 crore, which holds a 15% market share in the mangalsutra segment.

Analyst Palash Kawale writes, "These acquisitions will expand Sky Gold’s market in gold jewellery and diversify its product range." Sky Gold's addressable market share in India's jewellery sales has increased to 70%, up from 35%. The analyst also highlights that the management expects the acquired entities to generate sales of more than Rs 600 crore in FY25 and a PAT of more than 15 crore in FY25.

Kawale expects revenue, EBITDA, and PAT to increase by 53%, 56%, and 67%, respectively over FY25–27 and says, “Sky Gold can be a long-term compounding story.” He also mentioned that following these acquisitions, the management has upgraded its FY27 sales guidance to Rs 6,300 crore with over 25% RoCE.

3. National Aluminium Company:

SBI Securities initiates a ‘Buy’ rating on this aluminium and aluminium products company with a target price of Rs 234.6, indicating a potential upside of 22%. Analysts highlight significant developments, including NALCO's acquisition of a mining lease for bauxite mines in Odisha and a strategic MoU with NTPC for uninterrupted 1200 MW power supply. These developments are essential for NALCO's plans to expand the smelter plant capacity in Angul, Odisha.

Analysts note that in FY24, NALCO successfully increased production at its Utkal coal mine to 2 million tonnes per annum (mtpa), resulting in significant reductions in power and fuel costs. The upcoming Utkal Block E expansion to 4 mtpa by FY25 is expected to further enhance cost efficiencies. The brownfield alumina expansion, targeting 1 mtpa, remains on track for commissioning by the second half of FY26, with full production expected to be achieved by FY27, promising expanded revenue streams. Additionally, NALCO plans to expand its aluminum smelter capacity by 0.5 mtpa in the coming years to strengthen operational capabilities.

4. Tata Consultancy Services:

Sharekhan maintains its ‘Buy’ call on this IT consulting and software company with a target price of Rs 4,750, indicating a potential upside of 11.2%. The company’s revenue grew 5.4% YoY to Rs 62,613 crore in Q1FY25, and its net profit rose 8.7% YoY to Rs 12,040 crore, driven by outperformance in manufacturing, energy and healthcare segments.

Tata Consultancy Services plans to expand its digital transformation services and enhance its AI capabilities. The company has established new client partnerships and expects spending on tech modernizing systems to grow. Analysts are upbeat, saying that the company is working to mitigate risks from currency fluctuations and an uncertain global economy by diversifying across markets and investing in technology and talent. The management highlights consistent order bookings of Rs 700-900 crore quarterly, with an all-time high pipeline in Q1, as AI investments doubles to Rs 150 crore.

Sharekhan anticipates TCS to sustain growth despite margin pressure from wage hikes. The firm projects a robust revenue CAGR of 11% and an adjusted PAT CAGR of 15% for FY25-26, buoyed by substantial deal wins and a healthy order pipeline.

5. Indian Bank:

ICICI Direct maintains a ‘Buy’ rating on this bank, raising its target price to Rs 700, indicating a potential upside of 21.6%. This PSU bank has a total business of over Rs 12 lakh crore and a strong presence with 5,847 branches nationwide.

The bank is focused on enhancing its retail, agriculture, and MSME loan segments, which constitute about 62% of its loan book. It aims to maintain a steady CASA ratio of around 40% and expects margins to remain stable at 3.4-3.5% for FY25. Analysts Vishal Narnolia and Krishna Vyas have a positive outlook on the bank as it pursues digital transformation initiatives to improve customer experience and operational efficiency. It targets a 12-13% growth in advances for FY25, supported by new business opportunities in data centres, city gas distribution, and commercial real estate sectors.

Narnolia and Vyas anticipate that the company will achieve a CAGR growth rate of 11% for net interest income and 18% for PAT over FY25-26. They expect Indian Bank to see steady business growth and strong asset quality, projecting an improvement in RoA to 1.2-1.3% by FY25-26.

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

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