Wipro Ltd — Hold
Recommendation by Emkay Global Financial Services
Wipro’s acquisition of these IT units is in line with its strategy of focusing on the Europe region as the company looks to scale business and accelerate revenue growth in the region. We expect Wipro’s USD revenue growth to accelerate in FY22 to 8 per cent from a low-single digit decline in FY21. This deal is broadly in line with these assumptions. We maintain Hold with a TP of Rs 360 at 18x September 23E earnings.
Inox Leisure — Buy
Recommendation by J M Financial
On valuation, it is extremely attractive and, as per our single-screen analysis, the current market price is merely discounting a value for 405 screens relative to its current size of c.600 screens. We initiate coverage with a BUY rating and Target Price of INR 450 with 68 per cent upside.
Larsen & Toubro — Buy
Recommendation by Centrum Broking
Valuations offer room for upside given historical levels an all-round improvement in ordering and execution environment. We value L&T’s E&C business at 18x FY23E EPS (16x FY22E EPS earlier) and maintain Buy with SOTP based target of Rs1428.
Recommendation by JM Financial
We conducted checks with Ashok Leyland (AL) dealers to gauge the market response of the recently launched Bada Dost LCV. The new 3ton+ LCV has received positive customer response driven by benefits such as better mileage, superior pick-up and lower service cost vs. peers. The increase in addressable market and product acceptability should aid the company to gain market share in the LCV segment.
Westlife Development — Neutral
Recommendation by Motilal Oswal Financial Services
We initiate coverage on WLDL with a Neutral rating and TP of INR 440 per share valuing the company at 22x FY23E EV -to -EBITDA (discount to JUBI). From a 3-year perspective, we arrive at a TP of INR 810 per share (24.5 per cent CAGR), assuming no multiple expansion.
Reliance Industries Limited (RIL) — Add
Recommendation by Axis Capital
We are impressed with the execution of the KG-D6 project which involved development of complex deep waterfields. We assume 20/22.5 mcmd gas production from the basin in FY22/23 at 8.5 per cent and 9 per cent slope to dated Brent crude price. We value E&P business at Rs 250 billion or Rs 40/share, 8x of H1FY23E EBITDA. We estimate 19%/ 8%/ 38%/ 22% EBITDA CAGR for consolidated/ cyclical/ RJio/ Retail business over FY20-24. Reiterate ADD with SoTP-based TP of Rs 2,220.
Navin Fluorine International — Buy
Large capex undertaking for MPP ensures long-term earnings growth, in our view. We raise our TP by 17 per cent to Rs 2,742 as we move from target PE to target PEG methodology (forward PE/1-year prospective EPS growth). We applied 1.38x PEG on December 22E EPS and 25 per cent growth in December 23E EPS. Maintain a Buy rating and OW in EAP.
PVR — Buy
Recommendation by JM Financial
On a normalised basis, our workings suggest an Enterprise Value of INR 107mn/screen, which would imply that valuation is currently discounting only operational screens and does not seem to give the benefit of growth, making it rather attractive in our view. We initiate with BUY and a DCF-based target price of INR 1,840, implying 46 per cent upside.
Amber Enterprises — Buy
Recommendation by Anand Rathi Share and Stock Brokers
Amber is set to emerge as the primary beneficiary of the government’s steps on air-conditioner imports. The industry estimates 2.7m units are imported, of which 70 per cent are filled with refrigerants. After the notification, Amber added four OEM clients and is adding a few more. The full benefits of an expanding client list will be visible in FY22. With its two new factories expected to be commissioned by FY22, Amber can benefit from further policy support in the form of production linked incentives (PLI) for components. We raise our estimates significantly and move our target to 30x FY23e EPS (from SOTP earlier), taking into account synergy/interlinks of the integrated model.
Dabur India Limited — Buy
Recommendation by Geojit Financial Services Ltd.
In Q2FY21, Revenue rose 13.7 per cent YoY driven by healthy growth in the domestic and international market through the launch of new products and increase in demand. EBITDA margin stood at 22.6 per cent (+50bps YoY) helped by cost reduction initiatives, i.e., Samriddhi project. New product launches, pickup in economy post lockdown, efficient supply chain, and cost reduction initiatives will boost financials in the medium to long term. Hence, we upgrade our rating to BUY on the stock with a revised target price of Rs 584 based on 53x FY22E adj. EPS.
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