The CDMO specialty chemicals business in India is poised to enjoy an advantage over China owing to stringent intellectual property (IP) compliance and labour cost advantage. Innovators are reluctant to give business to Chinese vendors in CDMO as they have a history of crashing prices
Even with a sharp run-up in the stock prices of the defence basket (Nifty India Defence index 6m returns- 37%); our outlook on the sector remains optimistic due to the following factors: (1) visibility into long-term execution growth supported by a strong order book and a healthy pipeline; (2) timely execution facilitated by localization, integrated modular construction, and subcontracting; (3) government preference and domain expertise; (4) cash-rich balance sheets that prevent significant working capital challenges due to stage payments; and (5) in-house research and development investments and suitable technological supportEven with a sharp run-up in the stock prices of the defence basket
We have a positive view on Coal India amidst healthy volume growth on anvil, superlative return ratios (RoCE’s at ~40%), healthy net cash positive b/s and its leading contribution to India’s energy needs. We assign BUY rating to Coal India with target price of ₹550 wherein we have valued it at 5x EV/EBITDA on FY26E. High dividend yield of ~6% is added positive
Shalby is a multi-specialty hospitals chain that manages 16 hospital assets across India (10 owned multispecialty hospitals and 6 franchisee hospitals). Total bed capacity- 2362
Raymond is a diversified business conglomerate with presence in Textile, Apparels, FMCG, Realty, Engineering and Prophylactics etc. With the backing of a strong brand, Raymond is reckoned for delivering world-class quality products to its consumers for the past 9 decades.
The stock is currently trading at a P/B multiple of 1.8x/1.7x on FY2025E/FY2026E and offers a buying opportunity. Hence, we retain our Positive view on the stock with an upside potential of 45% owing to its strong growth outlook over medium to long term
The dividend yield is computed based on the closing price of 1st April 2024. We have considered companies that have consistently paid dividend in the last 3 years – i.e FY23/CY22, FY22/CY21 and FY21/CY20.
we maintain our Dec’24 Nifty target at 23000 as we value it at 20x on Dec’25 earnings. The current level of India VIX is below its long-term average, indicating that the market is currently in a neutral zone (neither panic nor exuberance). While the medium to long-term outlook for the overall market remains positive, we may see volatility in the short run with the market responding in either direction. Keeping this in view, the current setup is a ‘Buy on Dips’ market. We recommend investors to remain invested in the market and maintain good liquidity (10%) to use any dips in a phased manner and build a position in high-quality companies (where the earnings visibility is quite high) with an investment horizon of 12-18 months
Reasonable valuation: At the current market price, the stock trades at FY24E/FY25E P/E multiple of 20.3x/14.1x based on Bloomberg consensus earnings. We believe the valuation to be reasonable given the robust order book position of the company, strong execution capabilities and positive outlook on the overall infrastructure space
With business transformation imbibed & new competitive leadership,
current trajectory of business restructuring is expected to continue.
Increased focus on retail & MSME segment to aid granularization and
margins which is expected to drive RoA at ~0.9-1% ahead. Valuing the
stock at 0.8x FY26E BV, we assign a target of ₹ 35 and recommend a BUY
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