1. Pricol:

Emkay reiterates its ‘Buy’ rating for this auto components manufacturer, setting a target price of Rs 600, a potential upside of 22.6%. Pricol currently allocates ~4% of its sales to R&D and has formed key partnerships, including with the Chinese firm TYW for developing e-cockpits and Sibros for telematics, to advance its product offerings. 

The company anticipates growth in its disc brake segment, where it has won orders from major 2-wheeler OEMs and EV startups, with production set to begin soon. It aims to expand its revenue base to Rs 3,000 crore annually within three years, up from its current Rs 1,200 crore capacity.

Analysts Chirag Jain, Jaimin Desai, Nandan Pradhan and Omkar Rane highlight that the company will benefit from the growing use of advanced digital displays, such as touchscreens. The cost of these displays has tripled over the past five years and is expected to increase by another 50-60% in the next 2-3 years. Pricol is focused on adding new clients like Honda and Suzuki over the next 18-24 months, which will enhance its performance compared to the industry. The company appears in a screener of stocks outperforming their industry price change during the quarter.

2. Ashok Leyland:

Sharekhan maintains its ‘Buy’ rating on this commercial vehicles manufacturer with a target price of Rs 285. This indicates an upside of 20.8%. The analysts are positive about the medium and heavy commercial vehicles (MHCV) industry in H2FY25, expecting improvement over the first half of the year. The analysts say, “The outlook for the MHCV sector is improving as election-related uncertainties have eased, and government infrastructure spending is expected to gradually increase. Also, as the festive season approaches, high freight rates are expected due to rising demand.” 

Ashok Leyland (ALL) also anticipates growth in the MHCV segment due to a rise in replacement demand. The average age of trucks has increased to 10-11 years, up from the typical 7-8 years, highlighting a need for new vehicles. The growing acceptance of BS-VI trucks is expected to accelerate the replacement of older BS-IV models. The company is also focusing on improving its brand presence and expects a recovery in some of its international markets.

ALL plans to enhance its product portfolio by introducing six new light commercial vehicles (LCVs) in FY25. The company has seen progress in the bus segment with new orders from state transportation units. The analysts are upbeat about the increase in replacement demand and expect revenue and PAT CAGR of 5.5% and 13% respectively, over FY25-26.

3. PVR Inox:

Anand Rathi initiates a ‘Buy’ call on this movies & entertainment company with a target price of Rs 2,065, implying a potential upside of 23.2%. Analysts Shobit Singhal and Pranay Shah highlight that franchise movies are increasingly popular with audiences because they are familiar with the stories. The company expects Q3FY25 to surpass the record revenue of its best quarter, Q2FY24, which saw hits like Gadar-2, OMG-2, and Oppenheimer. Upcoming releases such as Pushpa-2, Singham Returns, Joker, and Lord of the Rings are anticipated to drive revenue growth in Q3.

PVR Inox has a durability score of 45 owing to a net loss in the past few quarters, but may have turnaround potential, backed by its momentum score of 64.2. The company plans to add 110-120 new screens in FY25, including 10-25% using asset-light models, where it earns a management fee of 8-9% of revenue and developers cover 70-80% of costs. The firm also plans to sell properties in Mumbai, Pune, and Vadodara, potentially raising Rs 300-400 crore to help reduce its current debt of Rs 1,700 crore.

Singhal and Shah expect improved occupancy and ticket rates for PVR Inox, driven by a strong content lineup and a growing number of screens. They believe high-quality content will succeed regardless of budget or star power. But the threat of streaming continues to loom over the stock.

4. Gulf Oil Lubricants India:

ICICI Securities retains its ‘Buy’ rating on Gulf Oil Lubricants India with a target price of Rs 1,659, suggesting an upside of 16.5%. Analysts Probal Sen and Hardik Solanki note that this oil marketing & distribution company may dip in volume growth in Q2FY25 due to distributor-level inventory build-up for Adblue (a diesel exhaust fluid) and slower demand in the lubricant business. Despite this, Gulf Oil is on track to achieve 2-2.5 times industry growth over the next two years supported by the company's expanding distribution, new product launches, and brand investments. 

Analysts Sen and Solanki project an improvement in margins to 13.2%/13.5%/13.5% for FY 25-27, up from the previous estimate of approximately 13.1%, supported by stable crude prices, premium product launches, and new segments. EV investments will provide diversification opportunities, cushioning the company from the internal combustion engine decline and are projected to generate Rs 7-8 billion in future revenues. The company is projected to achieve a 6-7% YoY growth in volumes for core lubricants, with revenue and EBITDA CAGR of 10.1% and 11.1%, respectively, over FY 25-27.

5. Granules India:

Motilal Oswal reiterates its ‘Buy’ rating on this pharmaceuticals company with a target price of Rs 680, indicating a potential upside of 24.2%. Analysts Tushar Manudhane, Akash Manish Dobhada and Viraj Shah highlighted recent United States Food and Drug Administration (USFDA) observations, including issues with equipment cleaning, air filters and non-dedicated equipment. The inspection also found problems with investigating out-of-specification results and managing documentation.

Analysts say that despite these concerns, the company has a solid regulatory track record with 24 successful USFDA inspections since 2009, including six at the Gagillapur facility. The management is addressing the issues raised by the USFDA and is working to resolve them within the required timeline.

Manudhane, Dobhada and Shah notes that the company recorded a 10% earnings CAGR over FY19-24. Analysts expect a 36% earnings CAGR over FY25-26 as the company focuses on building a niche pipeline in the oncology space, large volume products, innovative tech-based products and backward integration.

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

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