Posts in category investments

Bajaj Housing Finance will be among top-4 mortgage players in the medium term. Buy for target price of ₹210 (27% upside): Philip Capital

Bajaj Housing Finance Ltd (BHFL) was classified as an upper-layer NBFC as per scale-based regulations, and so it got listed within three years of this classification. We have worked out three scenarios, and taken a hold-co discount of 15% to be conservative, even though present tax considerations don’t mandate a hold-co discount. We have taken a 50% weightage for our base scenario, 40% for our bear scenario, and 10% for a bull scenario. In the bull case, we assumed a P/E multiple of 30x – c.20% lower than +1sd of BAF. We are using earnings multiple for the standalone entity, given it is a fast-churn, high-velocity, consumption-driven credit business. We are using price-to-book multiple for the housing finance entity as it’s a traditional lending business

Aadhar is a large affordable HFC (Rs211 bn of AUM in FY2024, 7% market share in the affordable segment) with a long track-record, well-diversified geographical presence and customer profile. Buy for target price of ₹550 (41% upside): Kotak Institutional Equities

We initiate coverage on Aadhar with a BUY rating and RGM-based FV of Rs550/share (41% upside). Aadhar stands out versus most affordable peers due to a larger balance sheet, longer vintage and superior RoEs. On the other hand, its loan growth (21% CAGR during FY2024-27E) is comparable more to mature housing finance companies than fast-growing smaller affordable HFCs.

HG Infra has strong balance sheet, return ratios and healthy working capital cycle. Buy for target price of ₹1885 (21% upside): ICICI Direct

HG Infra Engineering Ltd is a Jaipur (Rajasthan) based infrastructure company having primary focus on Roads and along with railways and solar sectors. Additionally, the company is actively looking to diversify itself by targeting into water infra segment

Granules India has a sound compliance track record of USFDA till date. Buy for target price of ₹680 (20% upside): Motilal Oswal

Till date, GRAN has gone through 24 USFDA inspections since 2009. Out of 24 inspections, Gagillapur (Medchal-Malkhajgiri) has been inspected six times. With a sound regulatory track record, the company received either Voluntary Action Indicated (VAI) or No Action Indicated (NAI) classifications in these inspection.

India’s Electronics Manufacturing Services (EMS) industry is witnessing a strong revenue growth trajectory. Top stocks to buy by Motilal Oswal

India’s Electronics Manufacturing Services (EMS) industry is witnessing a strong revenue growth trajectory, primarily driven by healthy industry demand, the addition of new segments and onboarding of new customers, increasing domestic manufacturing, import substitution, and global partnerships. In this report, we discuss the healthy revenue growth visibility within the sector and the scope to improve margin, leading to a strong earnings growth trajectory. Our coverage universe includes Kaynes Technology (KAYNES), Avalon Technologies (AVALON), Syrma SGS Technology (SYRMA), Cyient DLM (CYIENTDL), Data Patterns (DATAPATT), Dixon Technologies (DIXON), and Amber Enterprises (AMBER)

Buy NMDC for target price of ₹286 (33% upside) as Iron ore prices are bottoming across the globe; expect short-term rally: Nuvama

NMDC’s stock has been under pressure amid falling iron ore prices along with lower volumes during Apr-Aug‘24 due to labour strikes, heavy monsoons and a few logistics constraints. We believe global iron ore prices have bottomed out at ~USD90/t and reckon they shall recover and average USD105–110/t in FY25E/26E

SENCO is one of the most promising players in the organized retail jewelry market. Buy for target price of ₹1350 (23% upside): Motilal Oswal

SENCO is strategically expanding its presence in eastern markets and other regions. The company aims to grow its consumer base by focusing on lightweight jewelry and capitalizing on the trend of studded jewelry, thereby expanding into more geographical areas. We reiterate our BUY rating on the stock with a TP of INR1,350 (based on 35x Jun’26 P/E).

Federal Bank is a credible alternative to larger private sector banks. Buy for target price of ₹225 (22% upside): HDFC Sec

We recently met Mr. Shyam Srinivasan, the outgoing CEO of Federal Bank (FB), to reflect on the bank’s evolution during his tenure and the key areas that need incremental attention for the bank to reset its ceiling. With its loan book at INR2.2trn and the deposit base at INR2.7trn, FB has broken through the midsized banks league and has steadily narrowed the gap with larger peers.

VA Tech Wabag bagged a mammoth order of INR 27bn (equivalent to its FY24 revenue). Hold for target price of ₹1541 (17% upside): ICICI Securities

VA Tech Wabag (Wabag) bagged a mammoth order of INR 27bn (equivalent to its FY24 revenue) from the Middle East for a desalination plant – the entire order is for EPC. As a result, Wabag’s EPC order book (OB) is now close to INR 79bn or >3x book to bill ratio. Order inflow (OI) has been a concern for the last 18 months – FY24/Q1FY25 OI undershot Street’s expectations (lower than revenues)

Va Tech Wabag Ltd is ‘RIDING THE WAVE’. It is well-placed to serve the growing water security/conservation market. Buy for target price of ₹1700 (30% upside): Axis Securities

Headquartered in Chennai, WABAG Group has a history spanning more than 90 years. With a presence in four continents, WABAG is a pure-play water technology multinational offering a wide range of solutions focused on conservation, optimization, recycling, and reuse of resources, addressing global water challenges. The group currently has a workforce of over 2,000 employees across more than 25 countries.