Mumbai, Oct 4 (IANS):
Godrej Consumer Products--Buy
Recommendation by Anand Rathi Share and Stock Brokers Ltd
The monthly chart of GODREJCP which depicts that the stocks is on the verge of a breakout from the falling trend line. At the same time a breakout confirmation would bring the counter above the resistance formed by Ichimoku cloud. In addition the monthly RSI too has confirmed a breakout that resembles inverse H&S. The technical evidences indicates a strong upside in the coming months. Traders can accumulate the stock between 720 to 710 with a stop loss of 640 (closing basis) for an upside target of 825.
Reliance Industries-Buy
Recommendation by Angel Broking
Reliance Industries Ltd. (RIL) is India's largest company with a dominant presence in Refining, Petrochemicals, Telecom and Retail businesses. Telecom business to witness robust growth over next few years due to tariff hikes and shift of subscribers from Vodafone Idea to other telecom players.
Metropolis Healthcare-Buy
Recommendation by Angel Broking
We are positive on the company given expected long term growth rates of 15% CAGR. Stable margins profile and moderating competitive intensity.
Inox Leisure-Buy
Recommendation by Angel Broking
Share prices have corrected more than 40% as all theatres are closed down due to covid-19 issue. Although, long term fundamentals are intact. Covid-19 can lead to further consolidation in the industry.
Chalet Hotels-Buy
Recommendation by Angel Broking
Company has posted strong sequential revpar growth in July. Future improvement is expected over next few months led by increased occupancy.
Zensar Technologies-Buy
Recommendation by Angel Broking
Company was adversely impacted in FY2020 due to ramp down in the retail and consumer group segment. However Company has won deals worth $150mn during the quarter and management has said that the deal
pipeline is very strong at $1.5bn as compared to $1bn a quarter ago. We expect the company to post revenue/EBITDA/PAT growth of 4.5%/17.8%/19.7% between FY20-FY22 given that the worst is over for
the company in terms of client ramp downs.
Persistent Systems-Buy
Recommendation by Angel Broking
Company has won a large deal during the quarter which will ramp up over the next few quarters. We expect the company to post revenue/EBITDA/PAT growth of 11.6%/21.4%/19.7% between FY20-FY22 given
negligible impact of Covid-19 on FY21 numbers strong deal wins, ramp up of existing projects along with margins expansion.
Endurance Tech-Buy
Recommendation by Angel Broking
Post Covid19, evolving consumer preference for lower ticket priced means of private transport amid pressurized incomes & awareness around social distancing are expected to act as tailwinds for domestic 2-Ws in India, 4-Ws across developed nations.
Sun Pharmaceutical Industries Ltd. --Overweight
Recommendation by J P Morgan
Investment Thesis
We have long viewed Sun Pharma as being best placed to transition into a specialty player in the U.S., with a large part of the investment already in place. We have seen declines in specialty sales
in the U.S. due to the pandemic that could recover gradually through the year, but we believe the specialty costs (higher R&D and SG&A) and slower ramp-up in specialty revenue are factored into our margin estimates. The stock is trading at a discount to its long-term average and peers despite a more sustainable growth story with the specialty business. In our view, the execution risk in the specialty business is well understood at this point, and with Taro's DoJ settlement and improving earnings from 2HFY21, we see scope for rerating from current levels.
3M India -Add
Recommendation by ICICI Securities
3M India (75% subsidiary of 3M USA) follows same template of its parent to steadily launch R&D backed niche products at regular intervals. While 3M products do not cost much to the consumer, they
serve critical purposes and add considerable value. Hence, there is high stickiness to 3M products, even in B2B segments. Steady growth (5-10%) in India's key segments (auto, telecom, healthcare, consumer, construction, mining and safety) will lead to sustainable growth for 3M products. 3M India generated RoE > cost of capital and PAT CAGR of 17% over CY08-FY20 due to moats like (1) strong brands (3M, Post-it, ScotchBrite, Command); (2) strong distribution network and 3M car care centres and (3) access to technology pool of parent.
Increase in domestic manufacturing will lead to structural margin expansion bridging the 600bps gap between 3M India and parent's EBITDA margins. We model 3M India to report PAT CAGR of 8.2% over FY20-FY23E. Initiate with ADD and a DCF-based TP of Rs20,000 (55x FY23E).
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