Antiques at Patanjali Foods
Buy call, target Rs 2,144
The company has approved a proposal to acquire Patanjali Ayurved’s HPC business for Rs 1,100 crore
We believe this acquisition is a positive move and should help drive growth for the company.
The acquisition is expected to improve the profitability of the business overall.
The acquisition is being made at a very attractive valuation of 0.4x FY24 revenue and 2.2x FY24 EBITDA.
In our view, the profitability of the HPC business is more stable and sustainable than that of the oil and food businesses.
Jefferies and HDFC Bank
Buy call, target Rs 1,880
HDFC Bank’s shareholding profile for June ’24 shows that foreign shareholding has declined to 54.83% from 55.54% in March ’24.
MSCI to raise foreign investment factor (FIF) from 50% to 100%
This could make the bank eligible to increase its weighting in the index at the next review in August 2024.
This could be a short-term positive for the stock market.
Over the medium term, strong deposit growth and improving net asset value will be the main drivers.
City on M&M Finance Services
Neutral call with target at Rs 310
The company’s June expenditure/business asset growth was broadly in line with expectations
Expenditure in the first quarter of FY25 stood at Rs 12,730 crore, up 4.6 per cent year-on-year.
Operating assets increased 3.7% quarter-on-quarter
The recovery efficiency in June 2024 was 95%, but fell below 96% in May 2024 and June 2023.
Collection efficiency in the first quarter was 94%, stable year-on-year
As expected, seasonality increased GS3 to 3.6% in the first quarter from 3.4% in FY24.
First quarter credit costs are expected to be around 2.4%, with ROA forecast at 1.5%
NIM expected to ease from high levels
City on Avenue Supermart
Sell ​​call, target level at Rs 3,400
Q1 2025 update shows no signs of accelerating growth; margin trajectory to watch
The company’s Q1FY25 update highlighted revenue growth of 18.4% year-over-year.
Revenue per store will grow at a 3% CAGR over the five-year period (5.3% increase year-on-year)
Sales/sq ft grew at a 5-year CAGR of -1.5% (5% YoY assuming average new store size matches TTM store size)
Revenues/square foot expected to continue to be impacted by unfavorable product mix
The rise of new stores in smaller towns continues to impact revenue per square foot
The number of stores added during the quarter was 6, 3/10 stores in Q1 24/Q1 23, and 41/40 stores in 24/23.
Given the risks associated with store expansion, we remain cautious on the company at its current valuation.
Maintained sell rating, implying price-to-earnings ratio of 56x for FY2014 (current price-to-earnings ratio of 78x)
CLSA at ICICI Lombard
Upgraded to outperform from hold, target raised to Rs 2,000
The company’s motor insurance premiums rose 31% year-on-year in the second half of FY25.
The company’s auto insurance premiums are significantly higher than the industry average of 15%.
Growth to be restrained due to worsening third-party loss ratios of competitors in the automotive industry
Premiumisation of cars and benefits of the Motor Vehicle Act may also help Motorbooks
It raised its forecast for the increase in total premium income for fiscal 2013 by just 2%.
I believe Motorbook’s momentum will continue.
We are raising our Gordon target price-to-earnings multiple to 30 times and our target price.
That’s expected to rise 11% from here.
Bernstein’s comments on REC and PFC
Initiated a buy call on REC with target price of Rs 653
Initiated a buy call on PFC with target of Rs 620
They are one of the most favored players in the power cycle
Investors are underestimating the duration and intensity of this power cycle
The bad loan risk for both companies has declined significantly this cycle
Both companies have better ROE (over 20%) and growth rates (15%) than the power industry.
Despite the rally, it is still trading cheaper than other stocks.
[8:41 am, 3/7/2024] +91 98330 43598: Prashanth Tapse, Sr. VP (Research), Mehta Equities Ltd
Yesterday, Nifty hit an all-time high of 24,236.35 on profit booking before plummeting. FIIs were net sellers of Rs 200 billion while DIIs bought Rs 64.8 billion. Nifty is expected to trade between 23,500-24,500 with 24,500 being the key resistance level. Fed Chairman Powell’s comments on inflation suggest a cautious market outlook. Important events include FOMC minutes on Wednesday and Non-Farm Payroll report on Friday. We recommend buying Nifty at 24,124 with target at 24,251/24,501 and Bank Nifty at 51,900-52,000 with target at 52,501/53,181. Top Stocks: HDFC AMC (CMP 4096) with target price at 4,187/4,301.
