PICK OF THE WEEK

Lux Industries--Buy

Recommendation by Anand Rathi Share and Stock Brokers

 

With its healthy growth trajectory, we are upbeat on Lux's long-term growth prospects for its strong brand equity, long-standing operations in innerwear and new launches. Its extension to casual wear and women's wear via the proposed merger would unlock synergies that would further propel growth. We initiate coverage on Lux Industries with a Buy rating and a TP of Rs 2,574, based on 30x FY23e EPS of Rs 85.80.

Cummins India--Buy

Recommendation by HDFC Securities

Going ahead, we make a case of PE expansion, given (1) structural changes in emission norms, (2) strong budget roadmap for infrastructure creation aligning with CIL product portfolio, (3) ahead-of-peers leadership in clean energy solutions, (4) recovery in end exports markets and, lastly, (5) probable long-term case for CIL-CTIL merger. We maintain BUY on CIL with a revised TP of Rs 1,068 (SOTP); upgrade P/E from 25x to 30x FY23E EPS.

Dalmia Bharat--Buy

Recommendation by HDFC Securities

Dalmia Bharat (DBEL) reported that Supreme Court has restored its siphoned mutual fund units (Rs 3.8 billion currently) to the company. While the amount is relatively small (2 per cent of its consolidated net worth), the ruling broadly casts off any doubt on DBEL's corporate governance (post this event came to light in Feb 19). Given that the company continues to deliver robust earnings and has managed its balance sheet well despite major expansion, this ruling should drive valuation rerating. We maintain BUY with a revised TP of Rs 1,770 (12x its consolidated Mar'23E EBITDA).

Intellect Design Arena--Buy

Intellect's focus on capital allocation and profitability remains high with the company settling for a little lower growth aspiration (than in the past) but retaining a strong margin focus. It expects to keep cost structures and R&D investments steady, driving up higher EBITDA. We raise our FY22e/FY23e EBITDA 3 per cent/6 per cent and our target to Rs 700 (from Rs 550) at 26x FY23e adj. EPS (23x earlier). We retain a Buy.

SBI Cards and Payment Services--Buy

Recommendation by Motilal Oswal Institutional Equities

The stock has corrected ~11 per cent since our initiation and is trading at 35x FY23E earnings, which is attractive given its strong fundamentals, earnings growth, and long-term structural story. At the CMP, the stock offers ~23 per cent upside to our unchanged TP of Rs 1,200 (43x FY23E EPS). Consequently, we are upgrading our rating to Buy. Our earnings estimates stands unchanged.

Mrs. Bectors Food Specialities--Buy

Recommendation by LKP Securities

The company has turned Free cash flow (FCF) positive in H1FY21. We expect the improvement to continue going forward resulting in better returns and growth. We Initiate Coverage on Mrs. Bector's Food Specialities Ltd with a BUY and a target price of Rs 627.

Emami Limited--Buy

Recommendation by HDFC Securities

The stock is currently trading at heavy discount to some of its peers. We feel investors can buy the stock at Rs 447-454 band (26xFY22E EPS) for the base case value of Rs 476 (28xFY23EPS) and bull case fair value of Rs 553 (32xFY23E EPS).

Tech Mahindra Ltd--Buy

Recommendation by Emkay Global Financial Services

For Tech Mahindra, HLS is a focus vertical (8-9 per cent of revenue) and the Perigord acquisition will augment its domain capabilities and also expand its BPaaS offerings. Given the size of the acquisition (<0.5 per cent of Tech Mahindra's revenue), we do not expect any meaningful revision to our earnings estimates. We have a Buy rating on the stock with a TP of Rs 1,170 at 18x FY23E earnings.

Hero MotoCorp--Buy

Recommendation by Centrum Broking

Our target price comes to Rs 4,295 and we assume coverage with a BUY rating. Slower economic recovery and rising fuel prices could act as a dampener to its Splendor and HF Deluxe sales.

Visaka Industries Ltd.--Buy

Recommendation by HDFC Securities

The stock is currently trading at valuation of 6x FY23E earnings. We feel the base case fair value of the stock is Rs 555 (7x FY23E) and bull case fair value is Rs 635 (8x FY23E). Investors willing to take risk can buy the stock at current levels of Rs 482 and add on dips at the price of Rs 432.

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Source: IANS