1. Varun Beverages:

KR Choksey maintains a ‘Buy’ call on this beverages company with a target price of Rs 738, indicating a potential upside of 21.1%. Varun Beverages reported revenue growth of 24.1% YoY to Rs 4,804.7 crore in Q3CY24, outperforming analyst expectations by 3.6% and Trendlyne’s Forecaster estimates by 4.9%. This growth was primarily fueled by strong performance in its carbonated soft drinks, juices, and water segments.

The company’s net profit grew by 23.7% YoY to Rs 619.6 crore, driven by higher sales and improved margins. The growth was partially offset by an 89.7% increase in finance costs related to the acquisition of BevCo, a Kerala-based beverage company. Analyst Dipak Saha notes that the company’s expansion in India is on track, with new facilities expected to be commissioned before summer next year. With some facilities opening in early 2025 (January-February) and the rest by August, Saha expects this expansion to double the firm’s capacity from current levels.

The company also plans to expand its facilities in Africa to double its capacity there by February 2025. Saha remains optimistic, noting that ongoing expansion in Africa, new facilities in India, and product innovations like an upcoming jeera-based beverage should be the major growth drivers for the company.

2. ICICI Bank:

Edelweiss reiterates its ‘Buy’ rating on this bank with a higher target price of Rs 1,490. This indicates a potential upside of 11.9%. In Q2FY25, the bank's net interest income (NII) increased by 3% QoQ to Rs 20,048 crore, though net interest margin (NIM) fell by 9 bps to below 4.3%. Meanwhile, the cost-to-income (C/I) ratio improved to 38.6%, down 108 bps, as operating expenses remained stable due to lower employee costs.

Analysts Raj Jha, Umang Patil, and Sanjana Faujdar, said, “The contraction in NIM was expected but improved C/I ratio & lower credit cost is a positive. We expect the bank to maintain strong performance due to its digital initiatives and solid balance sheet.” 

ICICI Bank is optimistic about its balance sheet, as it does not anticipate any loan growth challenges in FY25 and is confident in generating sufficient deposits to fund loan growth. The management indicated that there are many opportunities present to drive risk-calibrated growth, particularly in the credit card segment, which currently constitutes 5% of the overall mix and has a minimal impact on credit costs.

Jha, Patil, and Faujdar noted that operating expenses may rise slightly in H1 FY25 due to increased spending related to festive activities and technology investments. They expect the bank’s price-to-earnings (P/E) ratio to decrease from 17.9 in FY24 to 13.4 by FY26.

3. Strides Pharma Science:

Sharekhan reiterates its ‘Buy’ rating on this pharma company with a target price of Rs 1,874, indicating a potential upside of 25.5%. The analysts highlight Strides Pharma’s investment in nasal sprays and other areas, as part of a long-term strategy focused on achieving $400 million plus in revenue from the generics segment. The company has identified three opportunities within the nasal spray market, which they believe will compensate for a decline in soft gelatin volumes.

In Q2FY25, the company reported a 20% YoY revenue growth to Rs 1,201 crore, largely driven by its US business, which achieved record sales of $75 million. EBITDA margin improved by 71 bps YoY to 20%. The company saw unexpectedly high demand for the GLP-1 drug, used in the treatment of diabetes and obesity. The surge was driven by two key factors: the dosage requirement for pens — an injection to deliver insulin into the body, is twice as high, and some customers miscalculated their volume forecasts, resulting in greater demand than initially expected. The company also relaunched products from its inactive portfolio, resulting in a surge in market share and revenue in the US.

The analysts note that cost control measures and a healthy product mix support the 20% annual EBITDA growth guidance for FY25. They expect a revenue CAGR of 12.5% and a net profit CAGR of 33.3% over FY25-27.

4. Can Fin Homes:

Axis Direct maintains a ‘Buy’ rating on this housing finance company, with a target price of Rs 1,000, implying a potential upside of 15.9%. Can Fin Homes has shown strong growth in sanctions and disbursements, with the latter up 30% YoY to Rs 2,617 crore in Q2FY25. The company’s management anticipates this momentum to continue, projecting total disbursements of ~Rs 10,000 crore for FY25.

Analysts Dnyanada Vaidya and Pranav Nawale said, “Driven by positive expectations on NIMs, along with the availability of multiple levers, we anticipate a healthy CAGR of 15% in NII and 17% in earnings over FY25-27.” They believe the cost ratios are expected to remain between 17-18% due to the company’s investment in technology and the establishment of a marketing team.

The company’s management expects assets under management (AUM) growth of 13-14% in FY25, with further acceleration to 15-17% by FY26 onwards. Vaidya and Nawale attribute this growth to the addition of 15-20 branches each year and the company's expansion into North and West India.

5. ICICI Prudential Life Insurance Company:

Motilal Oswal maintains a ‘Buy’ rating on this life insurance firm with a target price of Rs 900, implying a potential upside of 17.1%. The company reported a 13.1% YoY growth in new business premium (NBP) to Rs 4,930 crore in Q2FY25. Value of new business grew 1.6% YoY to Rs 590 crore, but margins declined 460 bps on a YoY basis to 23.4%, missing analysts’ expectations of 25%. This margin decline was due to a shift towards Unit Linked Insurance Plans (ULIPs), which generally have lower margins.

Analysts Prayesh Jain and Nitin Aggarwal are optimistic about the insurer’s strategy to grow its network and introduce new products, which cater to customers seeking investment benefits and greater liquidity. Additionally, to enhance financial stability, the company plans issuance of non-convertible debentures worth Rs 1,400 crore. 

Analysts are optimistic as the company sees strong growth potential in its proprietary channels due to increased investments in expanding its agency network and enhancing the skills of its agents. Jain and Aggarwal expect the firm to deliver a VNB CAGR of 20% over FY25-27.

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

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