Zensar Technologies | Motilal Oswal expects revenue growth momentum of the firm to continue in 2HFY22 and FY23. Sustained traction, despite margin falling to mid-teen levels, is expected, analysts say. With a likely return to high-teens organic growth in FY23E (about 19 percent YoY) on a good FY22 exit and a recovery in key accounts, there is a potential for a significant stock rerating as valuations catch up with its peer group, according to the financial services company.
APL Apollo Tubes | The earnings momentum to continue on the back of growing demand across segments, robust distribution network, launch of new products under the parent company and newly merged entity Tricoat, increase in the share of VAP driving margin, and market leadership position, Motilal Oswal said. It expects a revenue/EBITDA/PAT CAGR of 27 percent/ 26 percent/ 37 percent over FY21-24E.
Ramco Cements | The company remains a play on the volume recovery theme and one of the better picks in the cement space, led by its capacity expansion plans and balance sheet deleveraging. However, investors must be wary of near-term cost inflation.
TCI | According to Motilal Oswal, the firm has a well-blended portfolio. Its unique multimodal capabilities would drive consistent growth in volumes and earnings over the next few years. The growth momentum is likely to continue with a pickup in economic activity, normalisation of transportation activity, and government reforms leading to formalisation and market share gains for organized players. “We expect TCI to clock a revenue/EBITDA/PAT CAGR of ~17%/25%/33% over FY21–24E,” the brokerage said.
Indian Hotels | A gradual recovery in FY22E and sharp recovery in FY23E is expected on a low base, improvement in ARR once normalisation is achieved, improved occupancies, positivity in cost rationalisation efforts in FY21, an increase in F&B income as banqueting and conferences resume, and higher income from management contracts.
Orient Electric | With demand scaling back gradually and the festive season ahead, Motilal Oswal believes OEL is best placed to capture this trend with its strong manufacturing and distribution capabilities. It has forecast a revenue/EBITDA /adjusted PAT CAGR of 19 percent/21 percent/25 percent over FY21-24E. With the potential for margin expansion, as it bridges the wide gap with peers, we expect RoE to remain robust at 26-28 percent over FY22-24E.
Aditya Birla Fashion | 2QFY22 revenue recovered to 89 percent of pre-COVID levels. Therefore, the management expects a strong and sustained recovery. While the near-term increase in losses from expansion in the ethnic wear vertical remains a concern, the brokerage expects this to be largely offset by lower losses from other businesses and growth in the lifestyle brands/Pantaloons business.
Chola | According to Motilal Oswal, Cholamandalam Inv. and Finance is the best play among asset financiers. The brokerage expects a sustained recovery in disbursements by the firm in 2HFY22 and AUM growth of 6 percent and 12 percent in FY22E and FY23E, respectively.
Endurance Technology | The company’s outperformance of India in the underlying 2W industry would continue on the back of content increase, mining of recently added customers, and ABS supplies from 3QFY22, the brokerage said. Coupled with its knowledge in aluminum die-casting in the EU, Motilal Oswal believes there is scope to increase contribution from the PV segment.
SAIL | The steelmaker continues to reap the benefits of higher steel prices. Its earnings sensitivity to prices is the highest among steel companies. The brokerage expects the state-owned firm’s EBITDA to grow at 21 percent CAGR over FY21-23E, led by 8 percent volume CAGR to 17.5mt.