1. Triveni Engineering & Industries:
Sharekhan maintains a ‘Buy’ rating on this sugar stock with a target price of Rs 582. This indicates an upside of 23.3%. Triveni Engineering & Industries (TEIL) has approved a composite scheme involving the merger of Sir Shadi Lal Enterprises (SSEL) with itself. Following this, the gear and defence business, Triveni Power Transmission (TPT), will be demerged and listed as a separate entity. Analysts believe that this restructuring will enhance shareholder value in the long run.
Both TEIL and SSEL are involved in the production of sugar and alcohol/ethanol. The proposed merger aims to consolidate all sugar, ethanol, and alcohol operations into one entity.
The demerged power transmission business represents 4.8% of TEIL’s total turnover. As of September 2024, the business had an order book of Rs 345 crore. The management is focusing on R&D to improve efficiency and meet global standards. They expect higher order bookings from the defense segment in the coming years.
Analysts are forecasting strong growth in the distillery business due to expanded capacity. They believe that higher minimum selling prices (MSPs) and rising international sugar prices will keep sugar realizations stable, leading to an improved EBITDA margin from 12% in FY24 to 12.5% by FY27.
2. Max Healthcare Institute:
Axis Direct initiates its ‘Buy’ rating on this healthcare facilities firm with a target price of Rs 1,315, indicating an upside of 10.2%. Max Healthcare is a leader in the Delhi-NCR and Mumbai regions, operating over 2,900 beds and holding a strong presence in oncology. Its oncology segment is valued at Rs 1,400 crore and holds nearly 20% market share. The company also has the highest average revenue per occupied bed (ARPOB) of Rs 76,000 and an occupancy rate of 75% compared to its peers.
Max Healthcare plans to add 3,000 beds to its network over the next three years, representing 70% of its current capacity. The company has already invested Rs 1,700 crore for capex. Analysts Ankush Mahajan and Aman Goyal estimate an additional investment of Rs 5,000 crore for this expansion and believe the company’s cash flow will be sufficient to cover the costs.
The company’s EBITDA has grown from Rs 332 crore in FY21 to Rs 1,806 crore in FY24, with the EBITDA margin increasing from 9.2% to 26.5%. Mahajan and Goyal write, “We expect the margins to remain stable in the range of 27-28%, as the new beds from brownfield expansions will take time to become operationally profitable.”
3. ICICI Bank:
Motilal Oswal maintains its ‘Buy’ rating on this bank with a target price of Rs 1,550, indicating a potential upside of 14.1%. ICICI Bank achieved a deposit growth of ~20% YoY in FY24, supported by its digital banking and extensive branch network. Analysts Nitin Aggarwal, Dixit Sankharva, and Disha Singhal highlight the bank’s focus on profitable growth, backed by a retail deposit-driven balance sheet. Despite competition on deposit rates, it manages rates to handle outflows, keeping its credit-deposit (CD) ratio at ~85%.
ICICI Bank has a comfortable current CD ratio and is focusing on monitoring its liquidity coverage ratio (LCR). Analysts highlight that the bank is working to maintain a healthy balance between giving out loans and attracting deposits in tough market conditions. They also see a strong potential for growth in fee income, particularly through transaction banking. Additionally, ICICI is reportedly exploring opportunities to expand its NRI segment.
Analysts Aggarwal, Dixit, and Singhal note that ICICI Bank is expected to maintain healthy loan growth, stable asset quality, and competitive return ratios. Margins may face short-term pressure due to potential rate cuts and rising funding costs. However, strong deposit inflows and a low CD ratio support its growth prospects.
4. Shriram Pistons & Rings:
Emkay maintains its ‘Buy’ rating on this industrial machinery manufacturer with a target price of Rs 2,950. This indicates an upside potential of 36.6%. Shriram Pistons & Rings’ (SPRL) subsidiary, SPR Engenious, has entered into an agreement to acquire a 100% stake in TGPEL Precision Engineering for Rs 220 crore. This acquisition will enable the company to expand its product portfolio beyond internal combustion engine (ICE) powertrains, and is expected to be completed by December 2024.
The analysts Chirag Jain, Jaimin Desai, Nandan Pradhan, and Omkar Rane note that TGPEL manufactures high-precision injection molds with two facilities in Uttar Pradesh. It has presence in both automotive and non-automotive segments (Electrical, Consumer Goods, Medical), with clients that includes Denso, Continental, Motherson, Havells, Polycab, Dabur, Gilette, etc. The acquisition strengthens SPRL’s diversification strategy into non-engine parts, following its previous acquisition of Takahata Precision India in February 2023.
Jain, Desai, Pradhan, and Rane believe the acquisition, though small (around 4% of SPRL sales), is important strategically and represents another step in diversifying away from engine parts. They expect revenue to grow 10% in FY25 and 12% in FY26.
5. Apeejay Surrendra Park Hotels:
IDBI Capital initiates a ’Buy’ rating on this small cap hotel company with a target price of Rs 245, indicating an upside potential of 31.1%. The company operates 34 hotels with 2,410 rooms across metros and emerging cities under five brands and has plans to expand to 61 hotels in over 45 cities, totaling 5,048 rooms by FY29.
Analyst Archana Gude highlights that ASPHL outperformed the industry with a 92% occupancy rate in FY24, significantly higher than the industry average of 70%. Its retail food and beverage brand, Flurys, has expanded from 19 outlets in FY17 to 95 as of H1 FY25, with plans to reach 120 by FY25 and add 40 stores annually. This asset-light and scalable business model is expected to improve ASPHL’s growth potential and overall business prospects.
Gude expects ASPHL’s net sales to grow at 11% annually from FY25 to FY27, driven by 8% growth in the hospitality segment and 32% in Flurys. EBITDA is projected to grow at 11% per year from FY24 to FY27, while profit after tax is expected to rise by 26% annually during the same period.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
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