We see Transport Corporation of India (TCIL) as a good opportunity in the current subdued operating environment for the logistics sector. Key points: 1) In the process of refining freight mix in favour of higher-margin LTL business; 2) Capex in high-margin sea freight segment likely to improve overall margins; 3) Improving performance of JVs expected to result in further earnings improvement; and 4) Trading at relatively attractive valuation compared to peers. Going ahead, we believe that higher LTL proportion in freight business and addition of two new ships (despite seaways margin receding) in seaways division are the two main growth drivers. Factoring in favourable risk-reward at current valuations vs. peers, we initiate coverage on TCIL with a BUY rating and TP of INR 1,200 based on 22x FY26E EPS
Posts by
Steel Strips Wheels Ltd is on a steady growth trajectory, re-rating is imminent. Buy for target price of ₹330 (40% upside): ICICI Direct
Steel Strips Wheels Ltd. (SSWL), is a Chandigarh based company involved in designing and manufacturing of automotive wheels – both steel and alloy wheels. It currently has five plants in India with total production capacity of ~2.4 crore wheels per annum (including ~0.36 crore of alloy wheels)
Mankind Pharma is unlocking new vertical through BSV acquisition. Buy for target price of ₹2650 (24% upside): Motilal Oswal
Mankind Pharma has agreed to acquire Bharat Serum Vaccines (BSV) for EV of INR136b, implying EV/EBITDA of 28x/22-23x on FY24/FY25 basis.
Zen Technologies is a niche defense play! Buy for target price of ₹1775 (31% upside): Motilal Oswal
Asset-light model can potentially generate strong RoE and RoCE: The company boasts an asset-light business model that does not require high capex. Instead, ZEN invests in R&D to build robust Intellectual Property Rights (IPRs). The manufacturing of simulators is outsourced, which helps generate a healthy fixed asset turnover ratio. Material costs account for 20-25% of sales, resulting in a significantly higher gross margin. The asset-light business model also helps to generate an RoCE of 30-40%.
Ratnaveer Precision Engineering is expected to show strong earnings growth of ~55% CAGR over FY24-26E. Target price is ₹245 (33% upside): ICICI Direct
Ratnaveer Precision Engineering (RPEL), is a Gujarat based stainless steel (SS) product manufacturer focused on producing finished sheets, washers, solar roofing hooks, pipes and tubes
Budget Review 2024-25 by ICICI Direct
The spotlight of the Union Budget 2024-25 was anchored on pillars of a) Youth skilling and Job creation, b) Tax simplification, c) Consistent capex momentum & d) Smooth and Efficient accessibility of credit to MSME. On a broader level, fiscal deficit of 4.9% and 4.5% for FY25E and FY26E, respectively, signifies government’s prerogative to carve out a sustained economic model of inclusive growth and development. To sum up, the Union Budget reflects a realistic set of measure to drive long term growth ahead. Nonetheless, market would await long term roadmap for specific growth pockets
Pre Budget Expectations 2024-25 by HDFC Securities
We think that any correction post the Budget may be short lived unless impacted by some other trigger. However, retail investors will do well to review their asset allocation and equity portfolio and rebalance their excess holdings in equities (due to the rise in values) into other asset classes and in the process take some profits out of stocks that have run up much ahead of their fundamentals in the past few months
Piramal Pharma is at critical inflection point and expect overall improvement as the CDMO momentum continues. BUY for target price of ₹210 (42% upside): ICICI Direct
Piramal Pharma Limited (PPL) is a carved-out Pharma entity from Piramal Enterprises limited and is a part of Piramal group of companies. The company operates in 3 major segments.
L&T Finance Earnings in line; strong retail momentum continues NIM improves ~15bp QoQ; asset quality stable. Target Price ₹230 (25% upside): Motilal Oswal
LTF has invested in process automation, security, and customer journeys. This, along with partnerships with e-aggregators, should lead to a stronger and more sustainable retail loan growth. Over the past few quarters, the company has consistently delivered strong growth in its retail loan book.
Downgrade Defence Sector on Super Rich Valuations: Nirmal Bang
The Defence stocks within our coverage universe have delivered 58% returns in the last three months, 75% returns in the last six months, 148% returns in the last 12 months and 776% returns in the last three years, buoyed by healthy order books, revenue expansion and the government’s major push for indigenization in the Defence secto
Recent Comments