Despite the impressive run-up (~37% in the past 3months), we believe that there is still room for a 25% upside for CIL’s stock price performance

I-Sec estimates its specialty chemical coverage universe’s revenue may dip 12% YoY in Q2FY24E due to destocking and weak demand. EBITDA is likely to decline 16.7% YoY on weaker spreads and operating deleveraging

Speciality Chemicals, Chemical prices for Jul’23

Five Star Business Finance’s FY23 annual report provides an insight on how it is progressing towards its vision of “reaching the unreached through suitable credit solution” and capturing the INR 22trn MSME lending opportunity. AUM growth reviving to 37% in FY23 vs 14% CAGR between FY20-22 (covid impact) is a testimony to its agility and business resiliency. In a high human touch model, adherence to standard-operating-process (SOPs) becomes a prerequisite, and negligible frauds / mishandling of cash in FY23 (and even in previous years) reflects its tight control on processes and staff quality. Notably, gross stage 3 increased marginally to 1.36% in FY23 vs 1.06% in FY22 despite the implementation of daily DPD recognition from Oct’22. Maintain BUY with an unchanged target price of INR 860, valuing the stock at 4.5x on Sep’24 BVPS

SMEL offers a unique business model comprising longs, value-added flats, stainless steel – both flats and longs – and downstream aluminium products. Now the company is focusing on going further down the value chain, filling in the gaps left by the major players

Suzlon is best equipped to benefit from industry tailwinds. We expect a sharp uptick in earnings FY24E onwards. Initiate with BUY and a target price of Rs 22 per share (assigning a multiple of 24x FY25E EPS).

MDSL’s lack of order visibility offsets its near-term robust revenue estimate. As a result, we perceive unfavourable risk-reward at CMP. We maintain SELL on MDSL stock with an unchanged TP of Rs600 (based on DCF methodology)

We value GAIL on the basis of FY24E EV/EBITDA multiples of 4-5.5x applied to various segments, leading to a target price of Rs127/sh (implying 30% upside). Current valuations of 6.3x FY24E EPS and 5.3x FY24E EV/EBITDA remain well below 5-year valuation bands. Even at our target price, P/E of 8.2x FY24E EPS, and
EV/EBITDA at 4.7x FY24E, are below peak valuations. Reiterate BUY

Despite formidable stock returns of ~70% on average over a year, we believe there is further steam left in the sector on the back of robust orderbooks and improving earnings quality. We maintain HAL (BUY; TP: Rs3,170), BEL (BUY; TP: Rs125) and Astra Microwave (BUY; TP: Rs380) as our preferred picks in the space. We maintain SELL on MDSL (TP: Rs575) and GRSE (TP: Rs390) owing to earnings peaking out by FY25

We remain 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. We initiate coverage post demerger with a BUY rating and an SoTP-based target price of Rs200/share