Book publisher S Chand and Company Ltd., real estate developer Oberoi Realty Ltd. and roofing sheets maker Everest Industries Ltd., received a favourable rating from brokerages recently.
Meanwhile, country’s largest two-wheeler maker Hero MotoCorp Ltd. was upgraded by an international broking firm first time in three years.
Here’s what the brokerages had to say:
Goldman Sachs On Hero MotoCorp
- Upgraded to ‘Neutral’ from ‘Sell’; maintained price target of Rs 3,295.
- Added Hero to Sell List on December 2014.
- The risk reward is more balanced now at current levels.
- New launches hold the key for the company in the medium to long term.
- Expect volume and revenue to grow at a compounded rate of 7 percent by March 2020.
- Hero will rely on Ather Energy for its drive into the electric vehicle market.
Ather should launch the debut EV scooter S340 by mid-2018 with a niche positioning.Goldman Sachs Report
Hero had picked up around 30 percent stake in the electric-vehicle startup in 2016.
Credit Suisse On S Chand
- Initiated ‘Outperform’ with price target of Rs 625.
- S Chand is the largest player in this market and with a strong track record.
- Leading player in attractive Indian education content market
- Expect compounded growth rate of 14 percent, 13 percent and 25 percent for revenue, operating income and earnings per share by March 2020.
- Lower borrowing cost and tax rate to accelerate earnings per share.
- Management looking at two acquisitions in Western India state board and Cambridge international board.
- Positives: large and young population, growth of private schools and increasing share of education in consumers' discretionary budget.
Motilal Oswal On Oberoi Realty
- Initiated ‘Buy’ with price target of Rs 580.
- Sharp focus and trusted brand are the key strengths.
- Company to be a key beneficiary of likely consolidation post RERA.
- Annuity business – portfolio expansion to provide consistent cash flows.
- Recent foray into affordable housing should help it enjoy tax incentives.
- Low net debt provides ample room to acquire large land parcels in the Mumbai.
- Expect revenue and net profit to grow at a compounded rate of 47 percent and 56 percent respectively by March 2020.
- High operating margins to be backed by premium pricing.
- Strong cash flow visibility for 10-12 years from ongoing/planned projects.
- Bull case price target of Rs 638.
Ventura On Everest Industries
- Initiated ‘Buy’ with price target of Rs 712.
- Government policies to promote housing sector is positive.
- Boards and Panels segment to lead to better profitability.
- Roofing - new product launches to maintain growth momentum.
- Change in product mix to boost profitability; To reduce dependence on roofing.
- Expect revenue, operating income and net profit to grow at a compounded rate of 11 percent, 53 percent and 173 percent by March 2020.
- Benefits from low base of previous financial year, which was impacted by demonetisation and high material costs.
- Margin expansion and debt repayment to boost return ratios.