1. REC:

This public sector NBFC surged 3% on Wednesday after signing non-binding Memorandums of Understanding (MoUs) worth Rs 1.1 lakh crore over five years, with various renewable energy developers like Hygenco Green Energies. These agreements cover projects like solar and wind hybrid systems, floating solar plants, ultra mega renewable energy parks, hydroelectric power, and other innovative technologies. 

REC aims to play a key role in boosting India’s non-fossil-based generation capacity from 200 GW to 500 GW by 2030. With its "Shapath Patra" commitment, REC plans to grow its renewables loan book from the current Rs 42,936 crore to over Rs 3 lakh crore by 2030, increasing the share of renewables from 8% to 30%. Its total loan book is expected to reach Rs 10 lakh crore by 2030.

In Q1FY25, REC reported a 16.6% increase in consolidated net profit, reaching Rs 3,460.2 crore, driven primarily by higher revenues. This revenue figure beat Trendlyne’s Forecaster estimate by 4.8%, although net profit fell short of expectations by 2.6%. The loan book continued its steady growth, rising 17% to Rs 5.3 lakh crore compared to Rs 4.5 lakh crore in the same period last year. 

Vivek Dewangan, MD and Chairman, commented on guidance and projections, "Going forward, we aim to maintain a net interest margin above 3.6% for the next 4-5 years. We also anticipate significant growth in our renewable portfolio, which we expect to account for 30% of our total AUM by 2030, up from the current 8%. This year, we are targeting disbursements of around Rs 1.9 lakh crore."

UBS Global Research has initiated a 'Buy' call on REC, citing India's expanding renewable energy generation and infrastructure growth. The brokerage has set a target price of Rs 720 per share, indicating a 33% upside from Wednesday's closing price. Despite this positive outlook, the company is trading in the strong sell zone, indicating that it is currently trading above its historical PE.

2. Hero MotoCorp:

This two-wheeler manufacturer rose by 3.6% over the past week to touch its all-time high of Rs 6,146 on Wednesday as the company expects increased momentum in the upcoming quarter, driven by the festive season. CEO Niranjan Gupta highlights that the company aims to adjust inventory levels to support growth this festive season. They plan to keep stock within a 4-6 week range to manage increased demand effectively.

The company is in talks to invest Rs 900 crore in Altigreen Propulsion Labs, an electric three-wheeler startup. This move will put Hero MotoCorp directly in competition with industry leaders Mahindra & Mahindra and Bajaj Auto. The company also holds a 40% stake in electric 2-wheeler company Ather Energy, which recently filed papers for a Rs 312 crore IPO. 

In Q1FY25, the company reported a net profit growth of 47.3% YoY to Rs 1,045.9 crore, but missed Trendlyne Forecaster estimates by 3.7%. Revenue grew 15.4% YoY to Rs 10,218 crore during the quarter, thanks to a recovery in the 125cc segment and the success of the new Xtreme 125 cc model. The company appears in a screener of stocks with improving book value per share over the past two years.

Gupta said, "The positive response to the Xtreme 125cc has prompted us to increase its manufacturing capacity from 25,000 to 40,000 units per month, which we will implement in the next couple of months. We also have new models in the pipeline, including the Destini scooter and Xoom models in 110 cc, 125 cc, and 160 cc capacities."

Geojit BNP Paribas has a ‘Buy’ rating on the stock as the brokerage anticipates an acceleration in the coming quarters, driven by positive customer sentiment, a favorable monsoon, and the festive season. Additionally, the company's planned product launches in both internal combustion engine (ICE) and EV categories support a positive outlook.

3. Thermax:

This heavy electrical equipment manufacturer has risen 15.6% over the past week as its wholly-owned subsidiary, Thermax Babcock & Wilcox Energy Solutions, received a repeat order worth Rs 516 crore from Jindal Energy Botswana. This order is for two 550 tonnes per hour (TPH) boilers for a 300 MW energy project in Botswana, Southern Africa.

In Q1FY25, the company reported operating revenue growth of 13% YoY to Rs 2,184.4 crore but missed Trendlyne’s Forecaster estimates by 3%. Net profit also nearly doubled on a YoY basis to Rs 116 crore but was 14% below consensus estimates. This estimate miss was mainly due to lower order inflow which led to subdued order book growth. With an order inflow of Rs 2,600 crore, Thermax’s order book grew 2% YoY to Rs 10,700 crore at the end of Q1.

Managing Director and CEO, Ashish Bhandari, said, “The company is likely to see higher order inflow in FY25 compared to FY24, led by the refining and petrochemicals sector.” He highlights that the company is also venturing into newer segments to boost order book growth, and also aims to grow its chemicals business which currently contributes 7% to the total revenue.

ICICI Securities maintains a ‘Hold’ rating on Thermax as financials missed estimates in Q1. The brokerage believes that orders from the thermal segment will remain strong over the next few years and give a big boost to Thermax’s order inflow. They forecast the company’s revenue and net profit to grow at a CAGR of 15% and 21.7% respectively.

4. Delhivery:

This transportation & logistics company rose by over 3% in the past week as on September 16th, as it entered into a strategic partnership with Team Global Logistics to expand its cross-border services to 120 countries. This collaboration aims to combine Delhivery’s Part Truckload shipping network with Team Global Logistics’ expertise as the country’s largest Less-Than-Container Load (LCL) operator.

For Q1FY25, the company’s net profit rose by 160.8% YoY to Rs 54.4 crore, while its revenue rose by 12.4% YoY as its express parcel segment revenue grew 6.2% YoY. The firm beat Trendlyne’s Forecaster estimates for revenue by 2.1%, and the net profit estimate by 185.2% as the company recorded a net loss in the previous quarter and in Q1FY24. The stock appears in a screener for stocks where mutual funds have increased shareholding over the past month.

Analysts report that the company’s Express business’ service-level EBITDA was maintained at 18%, while service EBITDA for the Partial Truckload (PTL) business expanded 100 bps to 3.2%. The company has the largest coverage of  19,000 pin codes across the country. The company is also planning to enter quick commerce, where they plan to create a warehousing and delivery infrastructure for D2C brands and smaller Quality Control (QC) players. 

In February, Meesho, an e-commerce player, launched a logistics aggregation platform called "Valmo," to consolidate various logistics providers and offer their services to sellers. Unlike other e-commerce firms like Flipkart and Amazon, Meesho does not plan to invest in assets such as trucks and warehouses. When asked by analysts on whether Delhivery will join Valmo, its CEO, Sahil Barua noted that “The incentive for us to unbundle is zero. It is also not in the interest of customers to disintermediate ourselves as the cost curve flattens quickly when you run a parcel-only network.”

Despite a tough market, management expects PTL revenue to keep growing as the industry shifts toward integrated players. They note that in the US., the top five logistics companies hold a 65% market share in PTL, and they anticipate a similar trend in India. For FY25 the management expects the EBITDA margin of PTL business to improve and approach the express parcel business’ margin of 18% as volume increases.

ICICI Securities has maintained a “Buy” rating on Delhivery, with a target price of Rs 600. The brokerage values the company at 40x FY26E EV/EBITDA. It adds that the firm is strengthening its leadership position in the express parcel. In the PTL sector, it became profitable at the service EBITDA level starting Q4FY24.

5. Shyam Metalics and Energy:

This iron & steel/intermediaries products manufacturer rose 3.2% on Monday, hitting an all-time high of Rs 908.9 the next day. This surge followed the company's announcement of the expansion of its production capabilities with a state-of-the-art Greenfield Cold Rolling Mill (CRM) in Jamuria, West Bengal with a total capital cost of Rs 603 crore.

The new facility has a capacity of 400,000 tons per year and will produce pre-painted galvalume coils and galvanized iron/steel coils. The mill is located in eastern India, which provides logistical advantages and helps address the region's shortage of color-coated sheet manufacturing units. This expansion will enhance Shyam Metalics' product offerings and manufacturing capabilities.

The CRM's output will cater to various sectors, including housing, warehousing, and industrial sheds, with a particular focus on affordable housing through initiatives like Pradhan Mantri Awas Yojana.

Brij Bhushan Aggarwal, Vice Chairman and MD of the company, said, “We aim to achieve optimal utilization of the new facility within the next two years, contributing 8% to 10% of the company’s revenue & EBITDA in the years to come.” The expansion will enhance production capabilities, reinforce the company's position as a key supplier of high-quality steel products, and leverage lower production costs and logistical advantages.

UBS initiates a ‘Buy’ rating on Shyam Metalics and Energy with a target price of Rs 1,200. The brokerage highlights the company's successful foray into new businesses (aluminum and stainless steel products) as a confirmation of its execution capabilities. They believe the multiple new projects commencing operations in FY25/26 provide strong earnings visibility, while diversification mitigates profitability risk.

Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.