Latest broker research reports from Monarch Networth Capital Limited buy, sell, hold, neutral recommendations along with
share price targets forecast and upside.
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We retain BUY on Manappuram Finance (MGFL) with SOTP based target price (TP) of Rs255. Superior risk management and credit underwriting have enabled MGFL avert severe shocks, as also seen in the FY21 results. This should also help overcome nearterm challenges posed by the second wave of COVID (in addition to the healthy provisioning buffer and respectable CE trends) and emerge stronger as normalcy is restored. MGFL offers a blend of a diversified balance sheet, healthy revenue/earnings growth, and superior return ratios. At 1.2x FY23E ABV, it remains grossly under-valued...
We believe that Valiant Organics Limited (VOL), a chemical company with focus on specialty chemicals and expertise in processes like Chlorination, Ammonolysis, Hydrogenation, and Acetylation, is a standout in the chemical space, characterised by a differentiated business model with products across the value chain, decades of experience in Chlorophenols products, high entry barriers, reputed clientele, and high return ratios. The company has made significant investments to enhance capacities, which will help boost revenue growth. The stock appears undervalued as compared to its specialty chemical peers in light of its robust financials and business model. We value VOL at INR...
ALKEM LABORATORIES LTD (Alkem) is a dominant Acute focused player in the IPM with leadership in the AntiInfectives. Its strong brands and penetration in the Acute side has led to its superior performance in the IPM. Chronic segment likely to double in size every 3 years on the back of Cardiac and Anti-diabetes. Higher profit contribution from chronic portfolio, improving MR productivity and rising scale in US generics will drive margin expansion of ~430bps over FY20-23E. Alkem's margins expansion visibility, rich return ratios and improving business profile merits a better multiple. We thus value Alkem at INR 4,000 on 17.5x EV/EVITDA on FY23E which gives an upside of 35% from the CMP. At current valuation of 13x EV/EBITDA and 18x PER on FY23E. Key risks include NPPA actions on key products, adverse USFDA regulatory actions and delay in biosimilars....
Offtake from DuPont has been impacted in FY21 as the product is used for high end applications like replacing metals in F1 cars, Kevlar (bullet proof jackets), etc. The contract is with take or pay terms with...
We raise our TP to Rs290 and move to ACCUMULATE rating on Kirloskar Ferrous Industries Ltd. (KFIL). We expect earnings to stay robust in FY22E due to full ramp up of VSL steel plant, strong pig iron spreads and further hikes in casting realisation. A large project pipeline which includes commissioning of iron ore mine, phase 2 of coke oven & WHRP and PCI will result in savings of Rs3bn over next 3 years, offsetting fall in pig iron spreads, if any. Strong earnings will keep the balance sheet lean (deleveraging to start from FY23E) despite...
We present the investment Idea Mrs. Bectors Food Specialities Ltd (BFSL), a promising biscuit and bakery player in North India. We expect the company, one of the largest exporters of Biscuits from India and one of the largest suppliers of buns to QSR, to ride the discernible tailwinds of consumer spending. BFSL over the years has built a strong and recognizable brand. BFSL should continue to expand its product portfolio within the existing segments, focus on increasing sales realization and volumes, and provide differentiated offerings. The company can leverage its extensive experience to strengthen its industry position by developing new products to capitalize on emerging...
Our positive stance on Central Depository Services Ltd (CDSL) is based on the premise of its business model, positioning, and market share gains, return ratios, and free-cashflow yield. The co. has been the biggest beneficiary of the revival in capital market activities evident in 170%+ YoY in its transaction charges (35% of its revenues) and continued growth in its annual issuer charges. With tailwinds in form of GoI initiatives and efforts by CDSL at enhancing its revenue opportunities, we see drivers for strong revenue/earnings growth. However, in the backdrop of recent outperformance and need for consistency, we lower our rating to HOLD, albeit revise our TP upwards to Rs750 (valued on a two-stage dividend discount model). We have argued for valuation...
We maintain BUY on Alembic Pharmaceuticals Ltd (ALPM') and increase our March FY22 TP to INR 1,480 (from INR 1,475 on modeling changes) thus an upside of 47% over the CMP. Q4FY21 results were on expected lines. Subdued US performance was on the back of headwinds coming from Sartans pricing erosion, which is likely to continue in the medium term. RoW business was a pleasant surprise on the back of low base post serialisation. Domestic continues to underperform due to Covid related headwinds; Specialty to lead the FY22 growth. Key medium term trigger would be USFDA's EIR for the general injectable plant which has already been audited by the USFDA on Feb-2021, deemed mission critical. Using DCF, we value Umbralisib at INR 160 per share discounting these sources of revenues including milestone based payments and CMP revenues over Umbralisibs commercial life. ALPM is currently trading at ~12x / ~9.6x EV / EBITDAx for FY22E / FY23E....
Fine Organic Industries Limited (FOIL) is the largest Oleo Additives player in India and a dominant player globally. FOIL has a strong moat in Oleochemicals including High Entry Barriers, High Customer Stickiness, High Return Ratios and Strong R&D; Capabilities. FOIL is in the midst of doubling its capacity, thus helping it to improve share of Cosmetics, Feed and Food additives which will be margin accretive. Given FOIL's strong earnings visibility from new capacities and consistent 30%+ return ratios, which reflect its robust business model, we believe it is truly deserving of a premium valuation other specialty chem peers. We thus value FOIL at INR 3,300 on 26x EV/EVITDA on FY23E which gives an upside of 15% from the CMP. At current valuation of 32x / 24x FY22E / FY23E EV/EBITDA. Key risks include RM Fluctuations, Forex Fluctuation and breach of IP....
