Diwali Samvat 2080 Recommendations

Diwali Samvat 2080 Recommendations

Diwali Samvat 2079 Performance

Outlook:

ARE&M is a well-positioned company with a strong growth outlook. Company expects a 6-7% YoY increase in the aftermarket for 4W and a strong 12- 13% increase in the aftermarket for 2W. Furthermore, the industrials sector is growing at a constant rate of 7-8% YoY, and due to continuous expansion initiatives, there has been a considerable increase in demand within the telecom market as 5G networks require more batteries than previous generations of networks, and Amara Raja is a leading supplier of telecom batteries in India. We recommend to buy the stock for the target price of Rs. 780 with the time horizon of 12 months.

Outlook:

Angel One is a great play on the digitalization and the financialization of savings. It reflected strong operating performance in Q2FY24 with markets hitting all-time high. Management’s continuous focus on the investment in the technology would further strengthen its position among peers. We remain positive on Angel One due to expected growth in the net interest income on account of growth in MTF book, lower capex and better F&O orders. On the performance front, the TTM EPS of the stock is at Rs.121.61 and is trading at the PE of 23.15x at the current price level of Rs.2,815. We recommend buying of the stock at the current price level for the target price of Rs.3,400 with the time horizon of 12 months.

Outlook:

The management forecasts progressive recovery in rural demand (particularly in the entry-level category), new product introductions in premium motorcycles and scooters, and a ramp-up of the EV product portfolio to help drive double-digit revenue growth in FY25, owing to the strong Indian economy. Going forward, the business expects EBITDA margins to be in the region of 14%-16%. We are bullish on the company notwithstanding a rise in rural demand and Harley volume, a solid dividend yield (3.7%), and a reasonable value. We recommend to buy the stock for the target price of Rs. 3700 with the time horizon of 12 months.

Outlook:

ICICI Bank remains one of the prominent bank among the private banking space with strong business momentum and healthy asset quality. It is well positioned with superior margins, strong RoE and robust capitalisation levels. Moreover, its well-performing subsidiaries, which are strong players in their respective fields, add value to the overall business. We remain positive on the ICICI Bank considering its sustained growth leadership across segments, ability to drive productivity and sustained RoAs. Hence, we suggest investors to buy the stock on the CMP for the target price of Rs.1200.

Outlook:

Lemon Tree is the leader in the fastest-growing sector in Indian hospitality, with 90 hotels (8,491 rooms) in Q1 FY24. It stands to gain from its efforts in brand creation, cost efficiency, prudent global expansion, and pricepoint mix. Its aggressive expansion strategy and asset-light approach bode well for the long run. With a rebound in corporate travel and major events and conferences, Lemon Tree, which has 86% of its hotels in business destinations, stands to gain further. We recommend to buy the stock for the target price of Rs. 140 with the time horizon of 12 months.

Outlook:

PVR Inox, the country’s largest theatre chain recorded its highest-ever sales, EBITDA, and PAT in Q2FY24. Also notable is management’s prediction of INR 1.2bn to INR 1.4bn in EBITDA synergy in H1FY24, with more to follow. The company anticipates a positive FCF in FY24. It is also aiming to reduce profits volatility by negotiating revenue sharing contracts with landlords. Overall, management anticipates a continuous increase in ROCE to the mid-teens in FY24. We recommend to buy the stock for the target price of Rs. 2060 with the time horizon of 12 months.

Outlook:

The medium-to-long term outlook for RIL is favourable due to developments in the retail and digital industries, increased gas production from new fields, the nationwide rollout of 5G services, and JioAirFiber. Development in the retail business is expected to be boosted by the upcoming festive season. Furthermore, the global oil demand growth is expected to remain strong led by voluntary cuts by OPEC+ and geopolitical tensions. RIL has given the EPS of Rs. 101.09 on TTM basis and is trading at the PE of 23x on the current price level of 2320. We recommend investors to buy the stock for the target price of Rs. 2700 with the time horizon of 12 months.

Outlook:

Tata Power is expanding its business portfolio across renewables, transmission and distribution, as well as customer centric businesses of Solar Rooftops, Solar Pumps, and Micro grids, EV charging, Energy Services (ESCO), Home Automation and Floating Solar. The company’s focus to shift from a B2G to B2C model would further drive robust earnings growth over the next 4-5 years. The company’s renewables and distribution business makes it the best private player in the sector. Currently Tata Power is trading at the PE of 23x and BV of 3x at the current price level of Rs.245. Hence, we recommend to buy the stock for the target price of Rs.300 with the time horizon of 12 months.

Outlook:

WEL’s Q1 FY 2024 performance reflects positive outcomes of their efforts and investments made over the past few years. It has a healthy cash position of Rs.1,058 cr. and comfortable level of debt. Company continues its strategic positioning towards development of BOT & HAM and EPC projects. Further it plans to explore monetization possibilities of various assets, including HAM assets and oil and gas portfolio and also evaluating opportunities in the renewable energy space. We remain positive on WEL’s diversified portfolio, strong execution and light asset model. On the performance front, the TTM EPS of the stock is at Rs.19.39 and is trading at the PE of 14.57x .We recommend buying of the stock at the current price level for the target price of Rs.325 with the time horizon of 12 months.

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Disclosure Appendix

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Kiran Tahlani, Elite Wealth Limited, kirantahlani@elitestock.com

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