1. Tata Consumer Products:
Motilal Oswal reiterates a ‘Buy’ rating on this tea & coffee company with a target price of Rs 1,380, indicating a potential upside of 15%. In Q1FY25, Tata Consumer Products' revenue grew 15.6% YoY to Rs 4,391 crore. EBITDA margins improved 80 bps YoY led by strong performance in the international beverage segment and higher coffee prices within the unbranded business.
Analysts Sumant Kumar and Meet Jain highlight the acquisitions of Capital Foods and Organic India, which contributed nearly 5% to the company’s revenue. They are optimistic about the company's plans to diversify its product portfolio through the ready-to-drink segment, and its entry into the branded dry fruits market. Additionally, the company plans to digitize its supply chain to improve operational efficiency and cost management.
Kumar and Jain are positive about the management's focus on strengthening the core business and expanding its distribution network. They project a revenue and PAT CAGR of 12% and 20% respectively, over FY25-26.
2. Granules India:
ICICI Direct maintains a ‘Buy’ rating on this pharmaceuticals company with an upgraded target price of Rs 765. This indicates an upside of 16.5%. In Q1FY25, Granules India’s revenue grew 20% YoY to Rs 1,176 crore driven by a 45% increase in US sales, which accounts for 74% of total sales.
The company saw a 90% YoY growth in EBITDA, driven by enhanced margins and a favorable product mix. Analysts Siddhant Khandekar and Shubh Mehta are upbeat about the company's plans to produce essential raw materials in-house to secure its supply chain.They are positive about Granules expanding its product portfolio, particularly in formulations, with a targeted launch of 7-8 products annually in the US. The firm’s Genome Valley plant began operations in March, which increased its production capacity to 2 billion units.
ICICI Direct projects a revenue CAGR of 12.9% and a net profit CAGR of 37.9% over FY25-26, driven by the company’s emphasis on increasing sales of its formulation products, especially in the US and Europe.
3. NLC India:
Axis Direct initiates a ‘Buy’ rating on this electric utilities company with a target price of Rs 340, indicating a potential upside of 30.2%. In FY24, the company’s net profit rose 32.8% YoY to Rs 1,854,1 crore, missing Forecaster estimates by 7.4%. However, operating revenue fell 19.6% YoY to Rs 12,999 crore.
Analysts Aditya Welekar and Darsh Solanki notes the company’s plans to increase its mining capacity from 50 MTPA to 102 MTPA, thermal power capacity from 4,640 MW to 10,465 MW, and renewable energy capacity from 1,431 MW to 8,059 MW by 2030. These capacity expansions will require a capital expenditure of Rs 1 lakh crore. These efforts aim to diversify cash flows and mitigate risks during the thermal power expansion.
Welekar and Solanki value the conventional thermal business at 1.8 times the FY33 equity projections. They value the regulated mining business at 1.9 times FY26 equity, the renewable energy business at 9.0 times EV/EBITDA on FY26 EBITDA, and the merchant coal business at 7.0 times EV/EBITDA on FY26 EBITDA.
4. Indraprastha Gas:
Sharekhan has a ‘Buy’ rating on this non-electrical utilities company with a target price of Rs 648, indicating a potential upside of 19.4%. In Q1FY25, the company’s net profit fell 7.8% YoY to Rs 481.2 crore but beat Trendlyne’s Forecaster estimates by 11.5%. Its operating revenue rose 3.3% YoY to Rs 3,520.6 crore driven by a 7.4% increase in the sales volume of piped natural gas (PNG), reaching 198.4 million standard cubic meters (scm) compared to 184.7 million scm in Q1FY24.
Analysts note the company’s capex for FY25 is projected to be Rs 1,700-1,800 crore, with around Rs 300 crores spent in Q1FY25. They also highlight the company’s plans to establish 10 new compressed biogas (CBG) plants in FY25, with an estimated project cost of Rs 300-350 crore, shared equally in a joint venture. The company plans to expand its network by adding 90 new CNG stations.
The analysts expect increased consumption from ongoing infrastructure development and the introduction of CNG-compatible bikes to enhance consumption levels. The growth in LNG sales, which benefits from higher margins, also contributes to this optimistic forecast.
5. ICICI Lombard General Insurance:
Geojit BNP Paribas maintains a ‘Buy’ rating on this general insurance company with a target price of Rs 2,331, indicating an upside of 20.5%. In Q1FY25, the company’s gross direct premium income (GDPI) rose 20.4% YoY to Rs 7,688 crore, beating the industry’s 13.3% YoY growth. It appears in a screener of stocks outperforming their industry during the quarter.
The health segment saw a growth of 28.5% YoY, helped by the launch of a new health insurance solution ‘Elevate’. The analyst remains optimistic about the boost in the retail health business, driven by shifting consumer preferences and improved servicing capabilities. ICICI Lombard has expanded its product offerings with new long-term insurance products for the private car and 2-wheeler segment.
Geojit projects ICICI Lombard’s premium earnings to grow at 16.4% CAGR and net profit CAGR of 25.1% over FY25-26, helped by its strong product mix and demand of its product by customers.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
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