Hot Stocks: Brokerage views on Arvind, Colgate, Nestle India and Ugro Capital
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We have collated a list of recommendations from top brokerage firms from ETNow and other sources:
SPARK on Arvind: Buy| Target Rs 352
SPARK initiated coverage on Arvind with a target price of Rs 352. The company has undergone several transformations in its textile business.
Turnaround efforts are paying off. Change in the segment mix and operational leverage should lead to ~18% EBITDA CAGR.
Lower interest costs on the back of debt repayment will likely result in ~31% earnings CAGR over FY24-26.
HSBC on Consumer: Colgate Palmolive & Nestle India
HSBC upgraded Colgate Palmolive India to a buy-from hold earlier and raised the target price to Rs 2650 from Rs 2100 earlier.The global investment bank downgraded Nestle India to hold from buy earlier but raised the target price to Rs 25200 from Rs 23600 earlier.
Pricing power is key as competition increases across a range of categories. Staples to keep underperforming discretionary discretion.
Key ideas for 2024: Avenue Supermarts, Asian Paints, Colgate, Titan, and Nykaa.
Colgate Palmolive is emerging from a prolonged disruption due to the rise of naturals in the toothpaste/oral care category; regaining pricing power; earnings growth is the key potential catalyst for stock; attractively valued.
Nestle India has been an exception within staples, on the back of consistent operating performance; but now looks quite expensive discretionary.
Centrum on Ugro Capital: Buy| Target Rs 395
Centrum Institutional Research initiated coverage on Ugro Capital with a buy rating and a target price of Rs 395. UGRO Capital is a tech-enabled NBFC with an exclusive lending focus on the MSME segment.
Our positive stance is underpinned by (1) large TAM in MSME lending; (2) strong productivity metrics vis-à-vis peers reflecting scalability of business model; (3) efficient systems and processes backed by data analytics giving comfort on asset quality; (4) capital efficient co-lending/co-origination aiding AUM growth and profitability; and (5) improvement in RoA/RoE profile as a mix of high yield book rises and operating leverage plays out.
“We expect AUM/EPS CAGR at 42%/67% over FY24-26E with RoA and RoE of 3.6% and 14.4%, respectively in FY26E. Sustained growth and profitability to support re-rating in stock, in our view,” said the note.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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