Select stocks including SRF, Welspun Corporation, Go Fashions (Go Colors), Voltamp Transformers and Latent View Analytics have found a ‘buy’ rating from the host of brokerage firms, who have initiated coverage on that particular company.
Brokerages including Anand Rathi, BP Equities, Emkay Global, Sharekhan and ICICI Securities have launched their maiden reports in select stocks and see up to 40 per cent rise in these counters from their Thursday’s prices. Here’s what is making these brokerages positive on them:
Sharekhan on Welspun Corporation
Rating: Buy | Target Price: Rs 274 | Upside: 30%
“We initiate viewpoint coverage on Welspun Corp with a Positive view and expect a 30 per cent upside. Strong order book and ramp-up of US operations, DI pipes, TMT bars and specialty steel to drive EBITDA and PAT CAGR of 46 per cent and 25 per cent, respectively, over FY22-25E and improvement in RoCE to 17 per cent,” said Sharekhan with a buy tag.
“Growth outlook is impressive with the companyтАЩs revenue/EBITDA target of Rs 15,000 crore and Rs 1,600-1,800 crore, respectively. ABG Shipyard deal offers an opportunity to enter shipbuilding while Sintex acquisition would help expand product portfolio and augurs well for B2C business,” it said.
Anand Rathi on Latent View Analytics
Rating: Buy | Target Price: Rs 455 | Upside: 40%
LatentView is laser-focused on revenue growth. It struggled to grow during FY19-FY21, largely for two reasons: the shift from staff augmentation and loss of clients. In Q1 FY20, Rajan Sethuraman took up the responsibility of CEO and aligned the company per industries and ramped up front-end and domain efforts, said Anand Rathi Shares and Stock Brokers.
Strong footing in the US and technology vertical. In margins, the company outstrips the industry with a 29.8 per cent FY22 EBITDA margin The margin would be 25-27 per cent, primarily due to the companyтАЩs aspiration of venturing into the BFSI and Retail verticals, where competition is keener, it said with a buy rating and a target price of Rs 455.
ICICI Securities on Voltamp Transformers
Rating: Buy | Target Price: Rs 3,610 | Upside: 30%
“We initiate coverage on Voltamp Transformers with a buy rating and a SOTP-based target price of Rs 3,610. The company is a key player in the transformer manufacturing space with a domestic market share of 15 per cent, catering to diversified sectors. Voltamp has developed strong relationships with clients,” said ICICI Securities in its maiden report.
The brokerage firm believes Voltamp stands to be a key beneficiary of energy transition, private capex revival and PLI initiatives of the government in the manufacturing space. The companyтАЩs current order book at Rs 900 crore, strong balance sheet and improved outlook on profitability would likely keep earnings growth strong in the next three years.
Emkay Global on Go Colors (India)
Rating: Buy | Target Price: Rs 1,220 | Upside: 31%
Go Fashion has only 9 per cent share of the branded market, which in turn is only 33 per cent of the Rs 13,500 crore category, said Emkay Global. Its bullish investment thesis rests on 3 pillars- accelerated gains for branded women bottom wear, increased market share and improved RoIC.
We expect the high double-digit revenue growth to continue for several years beyond FY26. We also expect Go Fashions to be far more immune to an unfavorable macro, as distribution-led share gains are relatively easier to attain for an incumbent leader, it added while initiating its coverage on the stock with a ‘buy’ rating and a target price of Rs 1,220.
BP Equities on SRF
Rating: Buy | Target Price: Rs 2,803 | Upside: 24%
“SRF is one of the leading producers in the fluorine-based specialty chemicals space, and is likely to clock superior ROCE of 22.1 per cent and ROE of 18.9 per cent by FY25E. SRF is in a sweet spot to most of its peers, both in terms of profitability and growth profile led by higher contributions from the chemical business,” said BP Equities’ initiating coverage report.
“We expect Revenue, EBITDA and PAT to grow over FY22тАУ25E led by significant investments in the chemical and packaging business, strong execution track record, diversification into high growth areas and higher consumption of fluoro compounds across the agrochemical and pharma sector. We initiate coverage on SRF with a ‘buy’ rating and target of Rs 2,803,” it said.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)
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