Tag: Buy

TCS: Strong Deal Momentum and Revamped Organizational Structure Provide Resilience and Position the Company for Growth TCS, India's largest IT services company, has reported robust deal wins over the past few quarters. The company is also well-positioned to grab market share during the current challenging environment due to its strong domain expertise, global presence, and proven ability to cross-sell its services. The recent organizational restructuring is expected to alleviate concerns and aid in driving growth. Analysts maintain a Buy rating on TCS with a revised price target of Rs. 4,200, as they believe the company is well-placed to grab cost takeout as well as digital transformation programs along with opportunities arising from vendor consolidation.

Harley Davidson India's sales momentum is building up ahead of the festive season, with the company receiving over 25,000 bookings for its new HD X 440 motorcycle. Analysts maintain a Buy rating on the stock, citing attractive valuation and strong fundamentals.

Sansera Engineering (SEL) is on track to meet its revenue and profitability targets for FY24, driven by strong growth in exports and aerospace. The company is also confident of crossing ~20% pre-tax RoCE by FY25. SEL's mid-year update is positive, with the company well-positioned to benefit from the long-term growth trends in the automotive and aerospace industries.

Karnataka Bank is a south-based private sector bank with a focus on the retail, MSME, and agri segments. It has a pan-India presence with 901 branches and a large customer base of 1.3 crore. The stock is currently trading at a relatively lower valuation, with a potential upside of 28%.

Tata Steel is setting up a 3mtpa EAF at its Port Talbot steel making facility in the UK, with a capex of GBP 1.25 billion. The project is expected to be EPS accretive for the company due to various benefits such as reduced cash losses, lower volatility in earnings, and lower energy costs. We maintain a ‘Buy’ rating on Tata Steel at a revised target price of Rs 144.

Dabur is aiming to grow its business much faster in the next few years and improve its profits. It is doing this by focusing on its Healthcare and Food & Beverages businesses and by making its operations more efficient. We believe that Dabur is a good investment and recommend that investors buy the stock.

Star Health & Allied Insurance Company (STARHEAL) sees strong growth opportunities in India's health insurance market. The company is focusing on deepening its presence in rural India and enhancing its bancassurance channel to capitalize on this growth. Analysts expect STARHEAL to report a 19% CAGR in overall gross premium over FY23-25, driven by a 20% CAGR in retail health and a 10% CAGR in group business. Claims ratios are likely to normalize at ~64%, with the combined ratio at ~93%. These factors should boost STARHEAL’s profitability over FY23-25, with RoE improving to 16% in FY25E from 11% in FY23.

Bromine prices have fallen sharply in China, but are expected to recover in the fourth quarter of fiscal year 2024. Archean Chemical (ACI), the largest bromine producer in India, has reported strong Q1 FY2024 results despite the volatility in bromine prices. ACI is also in the process of commissioning its derivative plant, which will increase earnings visibility in the coming years.

ICICI Securities upgraded NMDC's rating to "BUY" from "ADD" and raised its target price to INR 180 from INR 130. The brokerage firm expects NMDC's sales volume to breach the 32-40 million tonne range in FY24E, and its long-term volume visibility is clearer as the roadmap for 100 mtpa by FY30 is being worked on. Commercial mining in Odisha is also progressively getting undermined, resulting in more opportunity. RoE may improve further from the current level of 22% as the mining business takes the centre stage and the steel plant is demerged.

Emami's promoters' pledge is expected to be reduced to 15% by FY2024-end after the sale of AMRI Hospitals. The company is also targeting high single-digit revenue growth in FY2024 with an EBITDA margin expansion of 200-250 bps. Emami's discounted valuation and improving growth prospects make it a good pick in the mid-cap FMCG space.