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Sula, AIA, Dodla Dairy, Raymond & Happiest Minds: These 5 stocks see fresh brokerage initiations

Sula, AIA, Dodla Dairy, Raymond & Happiest Minds: These 5 stocks see fresh brokerage initiations

Stocks such as Sula Vineyards, AIA Engineering, Dodla Dairy, Raymond and Happiest Mind Technologies have seen fresh interest from the various domestic and global brokerage firms, who have recently initiated their coverage on them.

 The host of brokerages, including IIFL Securities, CLSA, Systematix Institutional Equities, YES Securities and Centrum Broking suggest up to 47 per cent potential upside in these stocks. The host of brokerages, including IIFL Securities, CLSA, Systematix Institutional Equities, YES Securities and Centrum Broking suggest up to 47 per cent potential upside in these stocks.

Select popular stocks such as Sula Vineyards, AIA Engineering, Dodla Dairy, Raymond and Happiest Mind Technologies have seen fresh interest from the various domestic and global brokerage firms, who have recently initiated their coverage on the said companies. The host of brokerages, including IIFL Securities, CLSA, Systematix Institutional Equities, YES Securities and Centrum Broking suggest up to 47 per cent potential upside in these stocks. Here's why these brokerages are positive on the stocks:IIFL Securities on Sula Vineyards Rating: Buy | Target Price: Rs 390 | Upside Potential: 10% Sula Vineyards provides an opportunity to invest in the nascent and fast-growing wine market in India. With 53 per cent market share in the domestic 100 per cent grape wine market, more than 25 per cent Ebitda margin, secured long-term contracts for grapes, and the highest distribution in the industry, said IIFL Securities.Systematix Institutional Equities on Dodla Dairy Rating: Buy | Target Price: Rs 1,018 | Upside Potential: 47% Dodla Dairy is gradually climbing up the prominence ladder in India’s Rs 15 trillion dairy industries by displaying immaculate consistency and efficient execution. With regional focus and a continuous improvement mindset, the company has been able to gradually ramp up its procurement base to become the third -largest private dairy player in India, and has also created well-recognized brands in South India, said Systematix Institutional Equities. "We have built-in revenue, EBITDA and PAT CAGR of 19.6 per cent, 18.5 per cent and 20 per cent over FY22-25E, respectively. We initiate coverage with a 'buy' rating and our TP of Rs 660 is based on 17x FY25E earnings for consistent 17-19 per cent RoCE. We see DODLA as a consistent 15 per cent compounder, currently trading at around 16x one-year forward earnings, which is quite attractive," it said.YES Securities on Happiest Minds Technologies Rating: Buy | Target Price: Rs 1,018 | Upside Potential: 27% Happiest Minds is an IT company with a 20 per cent plus revenue growth outlook led by predominant presence in digital business that includes a focus on cloud, SaaS, security solutions, AI, IoT, etc. Over 20 per cent EBIT margin for IT companies, that is significantly smaller than other Tier 2 IT companies, led by high offshore effort mix (96 per cent) and better revenue mix with a dominant presence in digital business, said Yes Securities. "Diversified revenue base across industry verticals and geography. It derives 67.5 per cent of its revenue from the US, 15.4 per cent from India, 9.4 per cent from Europe and 7.7 per cent from the rest of the world. Strong revenue growth outlook along with superior margin profile makes it credible play in the IT services space," it added with a buy rating and a target price of Rs 1,018. Sula is well-placed to benefit from the secular growth story. Moreover, valuation at 27x FY25 EPS is at about a 30 per cent discount to United Spirits, despite higher growth, which factors in risks to a large extent, it said in its maiden coverage report with a buy rating and a target price of Rs 390.Centrum Broking on AIA Engineering Rating: Buy | Target Price: Rs 390 | Upside Potential: 21% AIA Engineering is a dominant player in high chrome mill internals, a global duopoly. The highly technical and customized products are used as consumable wear parts for grinding and crushing in the mining and cement industry. The cement sector has matured in the usage of high chrome, where AIAE has attained a strong market share of 95‐97 per cent in India and 30‐35 per cent globally, said Centrum. "Mining offers immense growth prospects as only 15‐20 percent of consumables have shifted to high chrome, where AIA's solutions are superior to peers with strong value propositions. Given replacement demand being a key volume driver, large export revenue base and full pass-through of commodity prices and freight, AIA’s growth, margin and cash flows remain secured," it said with a buy rating and a target price of Rs 3,420.Systematix Institutional Equities on Raymond Rating: Buy | Target Price: Rs 1,832 | Upside Potential: 47% Raymond finally looks well placed to realize its full potential and unlock shareholder value, post a change in management and a strategy rejig. While the past growth has been slow and the branded apparel business performance has been volatile, the current management team looks committed and energized to aggressively drive its agenda of Go To market revamps, digital integration, cash generation and cost rationalization, said Systematix Institutional Equities in its maiden report. "We have built-in 11 per cent and 13 per cent revenue and EBITDA CAGR over FY23-25E, respectively, on a consolidated basis. Continued strong cash generation should aid constant reduction in leverage and improvement in RoCE to 33% in FY25E from 17% in FY22. An IPO of the engineering business and any fund-raising in the real estate business could help reduce the leverage and support future growth," it added with a buy rating and a target price of Rs 1,832.CLSA on Sula Vineyards Rating: Buy | Target Price: Rs 475 | Upside Potential: 34% Sula Vineyards is well placed to leverage the global consumer shift towards the low-alcohol beverage segment - beer and wine. With strong backend capabilities and a pan-Indian distribution network, Sula is India’s market leader in wines with a more than 52 per cent market share in the 100 per cent grape wine category, said CLSA. "It's healthy Ebitda margin gives Sula the ability to invest in category development which would be key for long-term growth. We expect an EPS CAGR of 18.6 per cent over the next two years and initiate with a buy rating and a target price of Rs 475," it said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)

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Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Published on: Mar 24, 2023, 12:16 PM IST
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