1. Tata Power:
Motilal Oswal reiterates a ‘Buy’ rating on this electric utilities company with a target price of Rs 509, indicating an upside potential of 17%. Analysts Abhishek Nigam and Preksha Daga note that Tata Power plans a capex of Rs 1.5 lakh crore over the next five years, approximately three times the capex incurred over the last five years. As part of this, the company has revised its annual capex guidance for FY26-27 to Rs 25,000-26,000 crore, up from the earlier range of Rs 22,000-23,000 crore.
The analysts highlight that the company expects to double its transmission and distribution capacity to 10,500 circuit kilometers (cKm) by FY30, up from the current 4,633 cKm. The operational green capacity target for 2030 has been increased to 23 GW from the earlier 20 GW. Meanwhile, the under-construction pipeline has significantly expanded to 10 GW, up from 3.7 GW previously.
Nigam and Daga note that the management plans to double its EBITDA and net profit to Rs 30,000 crore and Rs 10,000 crore by FY30, respectively. They expect a CAGR of 7.3% in net sales, 6% in EBITDA over FY25-27.
2. Supreme Industries:
Sharekhan retains its ‘Buy’ rating on this plastic products manufacturer with a target price of Rs 5,700, indicating an upside potential of 15.8%. In Q2FY25, the company reported a net profit decline of 15% YoY to Rs 206.6 crore. Revenue decreased 1.4% YoY to Rs 2,288 crore during the quarter. Regarding the results, analysts said, “Earnings were hit by the sharp fall in PVC prices, weak infrastructure demand and extended monsoons.”
Analysts note that the company is entering the gas piping market with an initial capacity of 3,000 tonnes per month, set to begin sales in the current quarter. The annual market size for gas pipes is estimated at 1 lakh tonnes. The company's total capital expenditure plan stands at Rs 1,500 crore. Plastic pipes capacity is set to increase to 8.4 lakh tonnes by FY25, up from 7.4 lakh tonnes in FY24.
Analysts mention that the management expects a revenue/net profit CAGR of 16%/18% over FY25-27. The brokerage notes healthy demand outlook and incremental capacity additions are likely to drive an 18% net earnings CAGR over FY25-27.
3. Dhanuka Agritech:
Axis Direct recommends a ‘Buy’ rating on this agrochemicals manufacturer with a target price of Rs 1,760, indicating an upside potential of 9.7%. Analysts Sani Vishe and Shivani More highlight that the company has recently shifted its outlook from negative to positive for FY25. The business has a portfolio of approx. 90 products and a pan-India distribution network with around 6,500 distributors and dealers, along with 80,000 retailers.
In Q2FY25, Dhanuka Agritech’s revenue grew 5.9% YoY to Rs 654.3 crore, but missed Forecaster estimates by 1.3%. Analysts attribute the miss to around Rs 100 crore in sales returns from Q1 due to continuous rainfall in the months of August and September, which delayed the spraying of insecticide. However, with good reservoir levels and favorable groundwater conditions, Rabi acreages are expected to improve.
Initially, the management had anticipated a 100 bps YoY decline in margins for FY25. However, this outlook has now been revised to a 100 bps improvement, driven by positive market response to new product launches like Purge, LaNevo, and MYCORe SUPER.
Vishe and More expect that the company will deliver strong top-line and margin growth in FY25, driven by a robust product mix, improving prices, and a strong Rabi season. They expect the firm's revenue to grow at a CAGR of 17.3% over FY25-27.
4. Uno Minda:
Geojit BNP Paribas upgrades its rating to ‘Buy’ on this auto parts manufacturer with a target price of Rs 1,209. This indicates a potential upside of 13.4%. Uno Minda reported a 17.2% YoY revenue growth to Rs 4,245 crore in Q2FY25, driven by new customer additions in the 2-wheeler (2W) and 4-wheeler (4W) segments and leveraging its client base. EBITDA margin improved by 28 bps to 11.4%, supported by a superior product mix. The company’s management expects margins to remain in the 11-12% range in FY25, considering the ongoing capex and expansion efforts.
The automotive industry saw a 9% YoY increase in production volumes for Q2FY25, driven primarily by the 2W segment, which saw a 12.5% rise, reaching 62.6 lakh units. Analyst Saji John said, "The channel inventory correction has shown signs of improvement over the past two months, and we expect the auto industry to deliver stronger volume growth in the second half of the fiscal year compared to the first."
The company is working on increasing its kit value across all segments by expanding capacity and forming partnerships, despite the slow growth in the EV market. It has partnered with Hyundai Mobis to manufacture automotive speakers and secured a significant order for EV charging solutions from a Japanese original equipment manufacturer (OEM). John expects a revenue CAGR of 24% and a net profit CAGR of 23.7% over FY25-27.
5. Sonata Software:
Emkay initiates a ‘Buy’ rating on this IT solutions provider with a target price of Rs 780, indicating an upside of 16.3%. The company’s international IT services business achieved a 26% revenue CAGR over FY21-24 and a 4.3% quarterly growth over the past 10 quarters. While revenue growth slowed in the last three quarters due to macro uncertainty, analysts Dipesh Mehta and Kevin Shah view this as a “temporary setback”. They expect strong growth as market conditions improve, with increased consumer spending anticipated in CY25.
Sonata Software has a long-standing partnership with Microsoft. Mehta and Shah believe the partnership gives SSOF an opportunity for growth within the Microsoft ecosystem. Sonata expects AI services to contribute 20% to the company’s revenue in the next three years.
Sonata aims for a revenue of $1.5 billion by FY27. The company’s focus on building a large-deal team has led to consistent growth in deals worth over $5 million, increasing from 10 in FY23 to 14 in FY24, and 6 in H1FY25. Analysts expect the company to return to top-quartile revenue growth as demand stabilizes.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
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