1. SRF:
Emkay reiterates its ‘Buy’ rating on this specialty chemicals firm with a target price of Rs 3,250. This indicates a potential upside of 13.9%. SRF is experiencing strong demand and higher prices for refrigerant gases in India. Globally, prices of R32 and R22, commonly used in air conditioning and cooling, are rising due to higher refrigerant gas prices in China and a shift to eco-friendly alternatives with lower global warming impact. Analysts Meet Vora and Meet Gada expect prices to remain stable through this season and into 2025.
Vora and Gada noted the company’s efforts to reduce costs for key products while keeping profit margins steady (EBITDA margin at 19.7% in FY24). SRF’s new active ingredients (AIs) are expected to start making a significant impact from FY26 and reach full production by FY28. The total market for manufacturing these AIs is estimated at around $1-1.5 billion, with SRF aiming to capture a 35-40% share.
The analysts project SRF’s revenue to grow at a CAGR of 17.6% and net profit at 52% over FY25-27. This growth is expected to be driven by increasing contributions from new products, and rising refrigerant gas prices globally.
2. Godrej Properties:
Hem Securities initiates a ‘Buy’ rating on this Mumbai-based realty company with a target price of Rs 2,405. This indicates a potential upside of 19.8%. The company’s revenue grew 126% YoY to Rs 1,240 crore in Q3FY25, driven by the delivery of 2.6 million square feet (msf) of projects.
Analyst Deepanshu Jain highlights that the company has achieved 71% of its Rs 27,000 crore FY25 booking value target. Godrej Properties has surpassed its business development guidance of Rs 20,000 crore, adding 16.9 msf of saleable area with a potential booking value of Rs 23,450 crore.
Management remains confident in achieving its Rs 30,000 crore launch target, supported by Rs 7,000 crore in Q4 launches across Hyderabad, Noida, Gurugram, Mumbai, Pune, and Indore. The company also raised Rs 6,000 crore through a qualified institutional placement (QIP) to expand its project pipeline.
Jain is optimistic about the company, citing its CY24 pre-sales of Rs 2.9 lakh crore as the highest among peers. With better cash flow, a strong land bank, and high demand, he expects sales to grow at 39.8% CAGR and net profit at 31.4% over FY25-26.
3. AU Small Finance Bank:
ICICI Securities upgrades its rating to ‘Buy’ on this bank with a target price of Rs 725, indicating a potential upside of 32.2%. AU Small Finance Bank (AU SFB) merged with Fincare Small Finance Bank in April 2024. Following the merger, AU SFB’s profitability was affected by higher-than-expected loan defaults in its credit card (CC) and microfinance (MFI) portfolios, leading to increased credit costs. For 9MFY25, credit costs stood at 5.4% in the MFI segment and 9.2% in the CC segment.
AU SFB’s return on assets (RoA) fell to 1.5% in Q3, reflecting a continued pressure on profitability. Analysts Renish Bhuva and Chintan Shah expect RoA to gradually improve to ~1.8% by FY27, driven mainly by a reduction in credit costs, which are projected to normalize to 3% in the MFI segment and 6–7% in the credit card segment.
Bhuva and Shah are optimistic about the RBI’s 25 bps rate cut to 6.25%, believing that the bank is well-positioned to benefit the most in the current falling rate cycle. They point out that during the last rate-cut cycle, the repo rate dropped from 6.5% in December 2018 to 4% in May 2020. Within a year of the cut, AU SFB’s margins expanded by 100–120 bps.
The bank’s management has raised its net interest margin (NIM) estimate to 6% for FY25, up from its earlier guidance of 5.8% in H1 FY25, while analysts expect it to be slightly higher at 6.2%.
4. Krishna Institute of Medical Sciences:
Geojit BNP Paribas upgrades its rating to ‘Buy’ on this hospitals company with a target price of Rs 622, indicating an upside of 21.3%. In Q3FY25, the company’s revenue grew 27.5% YoY to Rs 772 crore, while average revenue per operating bed (ARPOB) increased by 25.2%. However, occupancy declined to 50.7% from 61.6% in Q3 FY24, mainly due to lower occupancy at its Telangana facilities.
Krishna Institute of Medical Sciences (KIMS) recently signed an agreement with Valiyath Institute of Medical Sciences (VIMS) in Kerala’s Kollam district to manage its 300-bed facility. It also plans to expand capacity over the next two years, including in Telangana and Andhra Pradesh. The company has allocated Rs 500-600 crore for expansion in the coming year.
The analysts highlight that with new units set to contribute, KIMS is well-positioned to achieve its FY25 revenue growth target of 24% and continue expanding beyond that. They project revenue and profit CAGR of 28% and 32%, respectively, over FY25-27.
5. Healthcare Global Enterprises:
Axis Direct maintains a ‘Buy’ rating on this cancer care hospitals company with a target price of Rs 575, indicating an upside potential of 12.1%. In Q3FY25, revenue rose 18.9% YoY to Rs 1,058.7 crore, driven by a 3.5% YoY increase in average revenue per occupied bed (ARPOB) and 16% growth in occupied days.
Analysts Ankush Mahajan and Aman Goyal note that during the quarter, the company acquired MG Hospital in Vizag, which contributed Rs 25 crore in revenue with EBITDA margins of 24%. The company’s digital business grew by 14% YoY, generating Rs 76 crore in revenue. Meanwhile, KKR, an American private-equity and investment firm, acquired a majority stake 54% in Healthcare Global for approximately Rs 3,350 crore, taking full control from CVC Asia.
Mahajan and Goyal stated that the company operates in the cancer treatment industry, which is expanding at 17% CAGR. To capitalize on the emerging opportunities the company plans to add 900 beds over the next 4-5 years. Management expects EBITDA margins to expand by 100-150 bps in FY26. The analysts also anticipate a 1,000 bps increase in return on invested capital (RoIC) over the next three years.
Note: These recommendations are from various analysts and are not recommendations by Trendlyne.
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