1. Radico Khaitan:
Sharekhan retains its ‘Buy’ rating on this breweries and distilleries company with a target price of Rs 2,996. This indicates an upside potential of 25.4%. Radico Khaitan (RKL) has been focusing on premiumisation, and aims for 15-18% volume growth in the prestige & above (P&A) category for FY25. This segment has delivered 15 consecutive quarters of double-digit growth. The P&A portfolio’s contribution to Indian-made foreign liquor sales increased from 28% in FY19 to 46% in FY24 and is expected to reach 56% by FY27.
The company is implementing cost-optimisation measures such as backward integration with the Sitapur distillery and packaging shifts from glass to plastic bottles in the regular segment. These initiatives are expected to improve operating profit margins (OPM) by 125-150 bps annually, with a target to achieve late-teens OPM within three years.
The analysts mention that with no major capex planned for the next 6-7 years, RKL aims to repay most of its Rs 745 crore debt by FY27. They expect a CAGR of 16.6% in revenue and 29.6% in net profit over FY25-27.
2. Signatureglobal (India):
Motilal Oswal reiterates its ‘Buy’ rating on this NCR-based realty company with a target price of Rs 2,000. This indicates an upside potential of 52.8%. The company is expected to achieve a 35% CAGR in pre-sales from FY25-27, driven by its shift from affordable housing to the mid-luxury segment. Since 2014, the company has sold over 32,000 units (~25 million square feet) and achieved a 63% CAGR in pre-sales from FY21-24.
Analyst Abhishek Lodhiya notes that the company has a pipeline of 25.4 million square feet (msf), including projects in Gurugram's high-demand markets like South Peripheral Road and Dwarka Express Highway. The company is executing approximately 51msf of projects, with 25.3msf underway and 25.4msf in forthcoming projects that are set to be launched in the next 12-24 months.
Lodhiya believes that the company has a strong launch pipeline of premium projects, and expects it to deliver a 35% CAGR in bookings over FY25-27. He estimates the value of Signatureglobal’s current project pipeline at Rs 15,000 crore.
3. Metro Brands:
Emkay initiates a ‘Buy’ rating on this footwear manufacturer with a target price of Rs 1,500. This indicates an upside potential of 18.1%. Analysts Devanshu Bansal, Vishal Panjwani and Mohit Dodeja highlight Metro’s 20% CAGR growth in India’s sports and athleisure market from FY18-23. The company holds exclusive rights to FILA and Foot Locker.
The analysts note that the company caters to a wide audience with products priced from Rs 700 to Rs 12,000. Around 30% of employee compensation is linked to sales, which improves performance and drives consistent same-store growth of 3-4%. Analysts mentions that the company has ample expansion potential as premium brands like Tanishq operate in 290 cities, while Metro’s brands such as Metro, Mochi, and Crocs are present in only 171, 122, and 97 cities, respectively. They anticipate Metro can add 110-120 stores annually.
Bansal, Panjwani and Dodeja expect Metro Brands to continue adding 80-90 exclusive Metro/Mochi brand outlets annually to deliver a 18% revenue CAGR over FY25-27. They also expect net profit to grow at a CAGR of 22% over the same period.
4. Black Box:
Ventura maintains a ‘Buy’ rating on this IT software firm with a target price of Rs 826. This indicates a potential upside of 28.2%. The company offers digital infrastructure solutions in data centers and cybersecurity, as well as consulting services. Black Box expects its pipeline to grow to $3 billion from $2 billion and aims for a conversion rate of ~25%, up from the current 20%.
Analysts highlight that the company plans to expand its data center operations, primarily in North America and India, which contribute about 20% of its revenue. Black Box expects major clients like Meta, Amazon, and Microsoft to invest heavily in data centers, driving revenue growth. Analysts anticipate data center revenue to grow at a CAGR of 15%, rising from Rs 1,256 crore to Rs 1,994 crore by FY27.
Black Box has redefined its strategy by focusing on its top 300 customers and exiting less profitable long-tail clients, which do not contribute to margin growth. The company achieved an 8.9% EBITDA margin in Q2FY25 and 8.5% for H1FY25. Analysts note that Black Box has consistently outperformed in H2 compared to H1 in terms of operating profitability. They expect revenue to grow at a CAGR of 8% and net profit at a CAGR of 25.9%.
5. Canara Bank:
Hem Securities maintains its ‘Buy’ rating on this bank with a target price of Rs 118, suggesting a potential upside of 23.3%. The company’s management targets an 11% YoY increase in credit for FY25. Analyst Madhur Mandhana highlights that, of the total Rs 18,000 crore in unsecured personal loans, about Rs 12,000 crore was allocated to retirees and wage account holders, which poses no concerns. The remaining Rs 6,000 crore was used for education loans.
Mandhana believes that the 2020 merger of Canara Bank with Syndicate Bank enhanced its market position, giving it a market share of over 6% in advances and deposits as of FY24. The bank's net profit rose by 37.3% YoY to Rs 14,554 crore in FY24, with the net interest margin (NIM) increasing to 2.6%, up from 2.5% in FY23. It expects a gross NPA of 3.5% and a net NPA of 1.1% for FY25, compared to 4.2% and 1.3% in FY24. However, Mandhana expects these figures to stay below 3.5% and 1.1%, respectively.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
(You can find all analyst picks here)
