Dabur India – Buy
Recommendation by Edelweiss Financial Services
In CY21 too, Dabur would remain a strong volume growth story considering: i) addition of new consumers to Health portfolio in the wake of the pandemic; ii) worst is behind for Fruit Juices and other segments impacted by the lockdown; and iii) an impressive innovation funnel (PET bottle juices, health drops, health juices, Amla-plus juices, pickles and apple cider vinegar are doing well).
Given the positive structural levers coming in place for the company, we revise up our target multiple to 55x (from 50x) and arrive at a revised TP of INR665. Maintain ‘BUY’.
JSPL — Buy
Recommendation by Motilal Oswal Financial Services
JSPL’s power subsidiary JPL has been awarded the 6mtpa Gare Palma Coal block which should increase EBITDA by 5.5b p.a. (30 %) and improve PLF to 45-50 % (from 32 % in FY20).
Seel business outlook is strong with EBITDA to be amongst the highest ever at Rs 19,000/t in 2HFY21.
Stock trades at an attractive 3.5x FY22E EV/EBITDA for the steel business which is a significant discount to peers.
Exide Industries — Buy
Recommendation by LKP Securities
Exide Industries (Exide), the bellwether of Indian Automotive and Industrial Battery manufacturing industry is well poised to take advantage of the blooming replacement market demand within automotive, telecom and inverter batteries.
We maintain BUY on Exide with SOTP target price of Rs 233 (17x times FY 23E EPS standalone business @Rs 203 + Rs 30 of insurance arm valued at 1x embedded value).
Varun Beverages — Buy
Recommendation by Motilal Oswal Financial Services
We estimate 12%/31% revenue/PAT CAGR over CY19-22E, driven by newly acquired territories and stable operating margin. We value the stock at 30x CY22E EPS of Rs 36.2 to arrive at our target price of Rs 1,100. We initiate coverage with a Buy rating.
Sun Pharma — Buy
Recommendation by Emkay Global Financial Services
Sun Pharma’s initiation of Phase 2 trials for SCD-044 in Plaque Psoriasis bodes well for its specialty aspiration as SCD-044 could broaden the company’s offering for Plaque Psoriasis, effectively leveraging all the investment made till now for Ilumya.
We maintain Buy on the stock and raise the TP to Rs 660, based on the SOTP value of Rs 645/share and SCD-044 NPV of Rs15/share. The SOTP value of Rs 645 implies a P/E multiple of 22x on FY23E EPS.
Hindustan Petroleum Corporation Ltd — Buy
Recommendation by Geojit Financial Services
HPCL’s net revenue stood at Rs 51,773 cr (-14.9% YoY) in Q2FY21. However, it improved 37.3% on a sequential basis on the back of a sharp recovery in petroleum demand and refineries utilization rate of 100%, despite the lockdown. During the first half of this fiscal year, HPCL added 895 new retail outlets & 103 new CNG retail outlets. Strong infrastructure and pipeline network, along with robust inventory management will boost the company’s performance in the long-term. Therefore, we upgrade our rating to BUY on the stock with a target price of Rs 260 based on SOTP Valuation.
HDFC Bank Limited — Hold
Recommendation by Geojit Financial Services
HDFC Bank is temporarily restricted from undertaking digital business generation activities and securing new credit card customers, until it addresses IT infrastructure issues that have resulted in outages. However, impact should be minimal on its current ongoing operations. On December 4, RBI kept the rates unchanged for the coming quarter. It also announced strengthening of internal redressal framework for banks for a more efficient complaint resolution of customer complaints. Bank’s fundamentals and asset quality remains strong. We change rating to Hold from BUY with a revised TP of Rs 1,529 based on 3.8x FY22E BVPS.
NMDC Limited — Buy
Recommendation by Emkay Global Financial Services
We have a Buy rating on NMDC with a TP of Rs160, which comprises Rs132 for the mining business at 5x FY22 EVEBITDA and Rs 28 for the NISP Steel plant CWIP. Our estimates include 1.5mt /7mt production from Donimalai mines for FY21/22 and 22.5% premium for production from Donimalai mines and all mines in Chhattisgarh. We have not included the premium for Kumaraswamy mines as the premium is applicable only on the renewal of the mines. Kumaraswamy mines are due for renewal in Oct’22 and our FY23 estimates account for the same. We believe domestic iron ore shortage will continue as iron ore mines auctioned in Mar’22 are nowhere close to pre-auction volumes. Moreover, the EC/FC clearance for these mines are valid only for two years post which if fresh EC/FC is not obtained, the mines will again close, leading to a massive shortage of iron ore in the country. We believe that NMDC is well positioned to capitalize on this opportunity despite domestic prices at a 40% discount to the landed price of imported ore.
ITC Limited — Buy
Recommendation by Centrum Broking
ITC’s renewed focus on maintaining cigarette market share, tailwinds for FMCG foods business, strong FCF, high dividend yield and compelling valuations make it more attractive for long term investors. We maintain our estimates and reiterate a strong Buy rating with DCF-based Target price of Rs 353, implying 23.6x FY23E EPS. Key risks are sharp increases in any form of taxation.
L&T Infotech-Neutral
Recommendation by Motilal Oswal Financial Services
LTI is up 130% since its inclusion in our model portfolio (in 3QFY20) and is currently the most expensive (28x FY23 EPS) IT company within our Coverage Universe. While we continue to deem it among the best-in-class IT services companies on execution and management quality, we believe the stock more than factors in the potential; hence, we downgrade the stock to Neutral.
Hindustan Aeronautics–Buy
Recommendation by Anand Rathi Share and Stock Brokers
Hindustan Aeronautics is engaged in the business of Manufacture of Aircraft and Helicopters and Repair, Maintenance of Aircraft and Helicopters. q HAL is one of the premier defence PSU in India along with Defence Research & Development Organization (DRDO) and has over the years showcased research, design and development capabilities with the successful development of military aircraft and helicopters such as the Ajeet, Marut, HPT-32, Kiran and Advanced Light Helicopter.
Thus based on the business capabilities, industry growth prospects and valuations, we initiate our coverage on Hindustan Aeronautics Limited with a BUY rating and a target price of Rs 1,152 per share.
Disclaimer: Views and recommendations given are those of brokerages and analysts and do not represent those of IANS. Users should check with certified experts before taking any investment decision. IANS has no financial liability whatsoever to any user on account of the use of information provided.
–IANS
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