Benchmark indices may open higher on Monday, but are likely to trade in a range, said analysts. A host of stocks, however, could be in action, following brokerage updates. Price targets on Medplus Health Services, V-Mart Retail, Piramal Pharma and GSPL suggest potential up to 60 per cent upsides for the four stocks.
V-Mart Retail | Motilal Oswal | Target Rs 3,950
Motilal Oswal said South India constitutes 20 per cent of the sales mix, aiding V-Mart Retail’s growth and margin. But a pain in East India persists, it said.
With a cut in the average selling price, the festive and upcoming winter season can usher a revival in demand, the brokerage said while revising upward its FY23/FY24 Ebitda estimate by 12 per cent/4 per per cent, building in a revenue/Ebitda CAGR of 37 per cent/49 per cent over FY22-24.
“In the medium to long term, given the huge growth opportunity in the Value
Fashion segment and VMART’s strong execution capability, it has the potential to sustainably garner double-digit revenue growth for a prolonged period, backed by SSSG and new store additions,” it said.
Medplus Health Services | Nomura India | Rs 928
Nomura India said Medplus is increasing the number of stores in smaller cities as 56 per cent of new store additions in Q2FY23 were in Tier II and beyond. As per the company, 71 per cent of the stores that were opened between Sept 2021 and March 2022 achieved break-even in the first six months of operations. Nomura India has raised its revenue estimates for FY23-25 by 1.1 per cent-2.9 per cent.
Operating Ebitda estimates have increased for the three financial years by 16.5 per cent, 4.4 per cent and 2.4 per cent, respectively.
“Net earnings changes are significant due to the low base and IndAS116 impact. We continue to value the stock using DCF methodology and arrive at a new Dec-23F target price of Rs 928 (implying 60 per cent upside), with implied one-year forward EV/Ebitda of 24.6 times and EV/Sales of 2 times,” Nomura said.
Piramal Pharma | ICICI Securities | Target Rs 200
ICICI Securities said Piramal Pharma’s September quarter performance was driven by growth across its business segments. The brokerage remains positive on Piramal Pharma considering the growing requirement for development services, especially with complex regulatory processes for newer drugs, high entry barriers, limited competition for the complex hospital generics (provides sustainable growth over the longer term) and the rising contribution from the fast growing consumer segment.
ICICI Securities expects revenue, Ebitda and PAT CAGRs at 14.5 per cent, 21.1 per cent and 30 per cent over FY22-FY25E, with margins expanding 260 bps to 17 per cent led by growth in CDMO and reducing expenses in OTC segment.
GSPL: Kotak Institutional Equities | Target Rs 350
Kotak Institutional Equities said GSPL’s Q2 Ebitda was in line, as sharp volume decline (down 17 per cent QoQ) was part offset by higher realized tariff on ship-or-pay gains. For the core business, pending tariff review is the key overhang, it said.
“We assume 30 per cent tariff cut, and note that sensitivity to far value is not high. But, we note that at current market price, the implied hold- co discount for 54 per cent stake in Gujarat Gas is 70 per cent. Or put other way, adjusted for GGAS stake, the core business is trading at negative Rs 75 per share,” the brokerage said.
Kotak Institutional Equities has Upgrade GSPL to Buy with fair value of Rs 350.
