Analysts are largely positive on a handful of stocks post September quarter results. Among them is JK Cement, which has been upgraded to ‘Buy’ by Motilal Oswal Securities. CCL Products beat Nuvama Institutional’ s Q2 estimates and is seen reporting solid numbers in the quarters to come. CE Info Systems (MapMyIndia) Q2 revenue was strong but margin fell. Nonetheless, Centrum Broking has retained its ‘Buy’ on the stock. Carborundum Universal has seen is price target being upped by Nuvama Institutional on rolling over of earnings estimates to FY24.
CCL Products| Target Rs 581
Nuvama Institutional Equities said CCL’s overall Q2 results were ahead of estimates with solid top-line growth of 51 per cent YoY, driven by volume and pricing gains. Ebitda and PAT, it said, beat its estimates on the back of pricing gains and stable per-kg margins.
“With new capacities slated in Vietnam and India over the next 18 months, supported by strong global tailwinds driving CCL’s market share gain, we believe CCL’s top-line-led growth to remain solid. We retain ‘BUY’ with a target price of Rs 585 as we roll forward to Q3FY24E with unchanged P/E multiple of 28 times,” thje brokerage said.
Capex commissioning is a key monitorable for the stock in the near-term, Nuvama said.
JK Cement | Target Rs 3,170
Motilal Oswal has upgraded the stock to buy, valuing it at 13.5 times September FY24 EV/Ebitda, which is at a premium to its five year average one-year forward EV/Ebitda of 12.5 times.
Motilal said JK Cement is increasing its grey cement capacity by 27 per cent to 18.7mtpa by FY23-end, driving a CAGR of 11 per cent in grey cement volume over FY22-25E. It further intends to increase its grey cement capacity to 25 mtpa by FY25E, it noted.
“We estimate further upside will be driven by Ebitda growth (12 per cent CAGR over FY22-25E); improvement in profitability of grey cement business; and higher OCF, which will support expansion as well as deleveraging of its balance sheet,” the brokerage said.
CE Info Systems | Target Rs 1,673
Centrum Broking said CE Info Systems (MapMyIndia) reported robust revenue growth driven by better than expected performance in the automotive & mobility segment. The company’s Q2 revenues were above Centrum estimates. Ebitda margins at 39.9 per cent were impacted by increased investment in the IoT business of Gtropy along with higher marketing expenses for MapMyIndia and Mappls.
Ex-Gtropy, the company’s H1FY23 Ebitda margins stood at 49.9per cent.
“We tweak estimates slightly to reflect higher revenue growth and lower Ebitda margins due to Gtropy and maintain our BUY rating with an unchanged target price of Rs 1,673,” it said.
Carborundum Universal | Target Rs 1,040
Nuvama Institutional Equities said Carborundum Universal missed consensus PAT estimates by 15 per cent in Q2, owing to elevated losses in domestic and recently acquired overseas subsidiaries (abrasives). The company has taken corrective actions and losses are likely to glide down towards a breakeven in H2FY24 (earlier H2FY23), it said.
The company management does not expect a major dent in demand prospects due to the global slowdown given better product acceptance and ample room for growth.
“We are trimming FY23E and FY24E EPS by 5 per cent each given higher loss at Rhodius and input cost pressure. We retain ‘BUY’ with a target of Rs 1,040 (earlier Rs 1,015) based on a rollover to FY24E,” it said.
