Jubilant Foodworks — Accumulate
Recommendation by Geojit Financial Services
JFL posted standalone revenue of Rs 806 crore in Q2FY21 (-18.5% YoY; +111.8% QoQ), due to muted growth in Dine-in channel. System sales recovery for Q2FY21 stands at 82.3% YoY, whereas Like-for-Like sales recovery stands at 86.9%. EBITDA Margin expanded by 287bps YoY to 26.7%. Margin improvements can be attributed to flat input costs, lower discounts and introduction of delivery charges. Outlook improves with the ongoing growth momentum across delivery and take-away channels and expected recovery from Dine-in. Therefore, we upgrade our rating on the stock to ACCUMULATE with a revised price target of Rs 2,830 based on 63x December 2022E adj. EPS.
Mphasis Ltd — Hold
Recommendation by Emkay Global Financial Services
While strong deal momentum and continued traction in the Direct business augur well for revenue growth, the weakness in DXC revenues and uncertainty around the revenue trajectory after the MRC period remain key risks. Maintain Hold with a TP of Rs1,440.
Motherson Sumi Systems — Buy
Recommendation by Emkay Global Financial Services
Our positive view on MSS is underpinned by its strong management capabilities and expectations of a gradual pick-up in underlying segments. FY20-23E EBITDA/earnings CAGRs are likely to be robust at 15%/28%. We retain Buy rating with a revised TP of Rs155 (Rs139 earlier), based on 20x FY23E EPS.
SBI Life Insurance — Buy
Recommendation by Motilal Oswal Institutional Equities
SBILIFE is also looking to optimize its product mix in the Protection/Annuity business. This should help VNB margin to further expand to 22% by FY23E, which should drive 19% CAGR in VNB over FY20-23E. We expect operating RoEV to remain steady 18%, while EV clocks 17% CAGR over FY20-23E. Maintain Buy with TP of INR 1,050/share (2.7x September 22E EV).
Kotak Mahindra Bank — Neutral
Recommendation by Motilal Oswal Institutional Equities
KMB has delivered 18%/19%/21% CAGR in BV over the past 3/5/10 years owing to successive capital raises. However, with Tier I at 22.8% (highest in the past decade), modest growth trajectory and no further requirement to dilute as the promoter holding issue is already settled, we estimate BV to compound at 13% CAGR over FY21-23E. We, thus, downgrade our rating to Neutral and revise our TP to INR 1,800/share (3.6x September 22E ABV + value its subsidiaries at INR 511/share).
Sumitomo Chemical India — Add
Recommendation by Axis Capital
Such expected strong growth in exports will reduce the cyclicality in domestic business (monsoon dependence) and derive operating leverage benefits (+merger-led synergies) in the medium term; expect 14% revenue CAGR and 29% earnings CAGR over FY20-23. Strong balance sheet (Rs 7 billion cash currently) with healthy FCF generation and return ratios (FY23E RoCE at 29% vs. 25% currently) offer comfort. Initiate with ADD rating and TP of Rs 310 (35x Sept’22E EPS).
Engineers India-Hold
Recommendation by ICICI Direct
Going forward, we expect revenue, EBITDA and PAT to grow at -0.3%, 3.3% and 5.4% CAGR, respectively, in FY20-22E with marginally higher contribution from the consultancy segment. However, short-term headwinds may affect execution in FY21E amid challenges. EIL’s balance sheet continues to remain healthy with zero debt and cash balance of 2,500 crore. Its book-to-bill is at a healthy 3x (order book at 8,978 crore). We value EIL at 11x P/E on FY22E EPS of 7.6 with a revised target price of 83 per share and change our rating from BUY to HOLD. Key risks are any project headwinds or delays in the turnkey segment may further affect revenue growth.
IndiaMart InterMesh Ltd-Buy
Recommendation by Anand Rathi Share and Stock Brokers
We initiate coverage on the company with a Buy rating and a target of Rs 5,670 (valued on a DCF basis on assuming 11% WACC and a 5% terminal growth rate, implying a PE of 43x FY23e, we have assumed a 20% revenue and EBIT CAGR over FY24-34 respectively). We see value in the stock owing to network-effect driven pricing power, healthy cash-flows (on high operating-profit growth), negative working capital and lower capital expenditure in an asset-light model.
Siemens-Buy
Recommendation by Edelweiss
As SIEM looks inward to continually realign its products with structural changes across manufacturing/infra, potential for OPM scale-up remains high. Despite its recent rally, we are revising the TP to INR1,748 (from INR1,370), based on higher earnings (up 4/11% for FY21E/22E) and multiple (up to 50x from 42x) building in potential for better growth/returns scale-up over the next three-five years. Retain ‘BUY/SO’.
Cochin Shipyard-Buy
Recommendation by ICICI Direct
CSL continues to be one of the top-tier shipyards in the country with ample capacity, capability & the orderbook to support it. Recent tie-up with Fincantieri would help CSL gain technological inputs, design support & collaboration in high end/new gen defence vessels. Further, a solid order book of 13,862 crore, healthy cash balance of 1,400 crore (ex-advances) and robust order pipeline provides growth visibility for the company. A growing company, with high dividend pay-out & debt free b/s makes CSL an attractive bet trading at 7.4x FY22E EPS. We maintain our BUY rating on the stock. We value CSL at 9x FY22E EPS and revise our target price to 435.
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