1. Gopal Snacks:
Emkay initiates a ‘Buy’ rating on this packaged food manufacturer with a target price of Rs 600. This indicates an upside of 28.6%. Analysts Nitin Gupta and Pinky Mahato note that the company is exploring mergers and acquisitions (M&A) in eastern and southern India to expand its capacity and drive growth in new markets.
During Q2FY25, Gopal Snacks’ sales grew 12.5% YoY to Rs 402.6 crore, driven by a rise in wafers (up 47%) and other snack products (up 20%) segments. However, the EBITDA margin contracted by 110 bps to 11.6%, due to higher advertising and promotional spending – this jumped to Rs 5.5 crore from Rs 2 crore. The company’s business in Gujarat increased by 6%. Gupta and Mahato said, “We expect double-digit growth in the second half, as the 6% growth in Gujarat during Q2 indicates that business pressures are beginning to ease.”
Gopal Snacks has expanded its distributor network to 828, up from 667 in March 2024, and aims to reach 1,100 distributors by March 2025. It also plans to add one distributor per day in FY26. The analysts expect a revenue CAGR of 16.3% and a net profit CAGR of 34.4% over FY25-27.
2. Mastek:
Sharekhan maintains a ‘Buy’ call on this IT software firm with a target price of Rs 3,610, indicating a potential upside of Rs 27.8%. Mastek reported a revenue growth of 13.2% YoY to Rs 867.4 crore in Q2FY25, beating the analysts’ estimates by 2.1%. This growth is primarily driven by strong performance in the health and lifesciences, retail, and manufacturing & financial services verticals.
The company says that it is confident it can fully absorb the impact of wage hikes in Q3, ensuring strong performance in Q3 and Q4. Its EBITDA margin improved by 125 bps QoQ to 16.5%, with a target of reaching 17% or higher in the upcoming quarters. Analysts believe Mastek is on track for industry-leading growth, supported by a strong start to FY25. The firm saw strong momentum in North America's healthcare sector. Additionally, its expansion in the UK is benefiting from the new government's support for digital transformation initiatives.
Mastek added 14 new clients in Q2FY25, bringing the total number of active clients to 380. The 12-month order backlog reached Rs 2,194.7 crore, reflecting a 17.9% increase in rupee terms and 10.9% in constant currency. The analysts highlight that the strong and stable order backlog offers solid revenue visibility for the company.
3. State Bank of India:
ICICI Securities maintains a ‘Buy’ rating on the bank with a target price of Rs 1,000, indicating an upside of 27.2%. In FY24, SBI reported an improvement in its domestic loan-to-deposit ratio (LDR) to 69%, up from below 65% in FY23. The bank's gross non-performing assets (GNPA) stand at 2.21% in FY24, down from 4% in FY22. It has gained market share in retail and SME segments, outperforming other public sector banks, with a 16% YoY growth in corporate loans in FY24.
Analysts Jai Prakash Mundhra, Chintan Shah and Hardik Shah are optimistic about SBI's potential to gain credit market share, estimating a 15% CAGR in loans over FY25-26. They believe the bank’s leadership in retail products and improved loan offerings, particularly in the SME segment, positions it favorably despite heavy competition. SBI has maintained a credit market share of 22-23%, with expectations of sustaining this range in the coming years.
The analysts believe that SBI’s focus on enhancing digital banking services and investing in technology will strengthen its competitive position. The improvements in customer experience and operational efficiency could potentially attract more customers over the long term.
4. Newgen Software Technologies:
ICICI Direct assigns a ‘Buy’ rating to this IT software company, with a target price of Rs 1,465, indicating an upside potential of 18.7%. In Q2FY25 its net profit surged by 47.2% YoY to Rs 70.3 crore. Revenue grew by 25.5% to Rs 379.7 crore, driven by improvements in the Indian, Europe, the Middle East and Africa (EMEA), Asia-Pacific (APAC), and US markets.
Analysts Bhupendra Tiwary, Anjini Sharma, and Deep Thosani note that the company's focus on larger deals and scaling down of smaller accounts, with an aim to increase the average deal size from $700K to $2 million, has contributed to this growth. Analysts highlighted that the management plans to aggressively invest in achieving its goal of $500 million in revenue over the next 3-4 years, implying a CAGR of 36%. The order book of the company grew by 22% YoY in H1FY25.
Tiwary, Sharma, and Thosani expect revenue to grow at a CAGR of 23.8% between FY25-27, and EBITDA margin of 24.7%, 24.2%, and 24.2% for FY25, FY26, and FY27, respectively.
5. HDFC Life Insurance Company:
KRChoksey maintains its ‘Buy’ rating on HDFC Life Insurance, with a target price of Rs 845, with a potential upside of 16.8%. This life insurance company reported a net profit growth of 14.8% YoY to Rs 433 crore in Q2FY25. Revenue increased by 23.8% to Rs 28,489.3 crore, owing to improvements in annual premium equivalent (APE) and new business premium.
Analyst Dipak Saha highlights that the company expects annualized equivalent premium (APE) growth between 18-20%, and value of new business (VNB) growth in the 15-17% range for FY25. He notes that the company focuses on product innovation and expanding distribution channels, especially in tier 2 and 3 cities, while strengthening its partnership with HDFC Bank to enhance geographic reach.
Saha believes the company is well-positioned for sustainable growth in the coming quarters, supported by the management's strategic flexibility in addressing regulatory changes, disciplined pricing, and a strong solvency ratio. The brokerage expects a CAGR of 16.6% in net premiums, 15.8% in VNB, 24.4% in net profit and 19% in embedded value (EV) over FY 25-26.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
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