Month: September 2021

6- Dimensional Growth Path

According to Sharekhan, on its annual investor and analyst day 2021, L&T Technology Services highlighted on its business strategy, both near-term and long-term outlook for 2025, a six-dimensional growth path, six strategic bets, customer-focused approach to achieve industry-leading growth and a sustainable operating model.

“The company wants to be among the top 5 global pure play engineering services providers of choice. We believe the company’s strength around 4Es (complex engineering, digital engineering, design engineering and business engineering) and strong frameworks across segments will provide significant headroom for growth,” the brokerage has said.

According to Sharekhan, the management aims to achieve $1 billion annual revenue run rate by Q2-Q3 of FY2023, which translates 3.3%-4% CQGR. On long term, it aspires to achieve $1.5 billion in revenue in FY2025, which implies a 19.5% CAGR over FY2021- FY2025.

Valuations and reasons to buy the stock of L&T Technology Services

“We expect USD revenue/EPS to clock a CAGR of 19%/ 28%, respectively, over FY2021- 24E. Management aims to achieve 18% EBIT margin by FY2025, aided by higher revenue growth, improving margins in the hi-tech vertical and change in revenue mix,” the brokerage has said.

“At the current market price, the stock trades at 36x/31x its FY2023E/FY2024E earnings estimates, which justifies premium valuations, given anticipated large deal wins in the coming quarters, presence in the fast-growing ERD segment, and consistent payouts. On account of improving return ratios and free cash flow (FCF) generation, we retain a Buy on L&T Technology Services with a revised price target of Rs. 4,650.. ,” Sharekhan has said in its report.

Disclaimer

The above stock is based on the report of Sharekhan. Investing in stocks is risky and investors should do their own research. The author, the brokerage firms or Greynium Information Technologies are not responsible for any losses incurred due to a decision based on the above article. Investors should hence exercise due caution as are at record peaks. Please consult a professional advisor.

Jubilant Foodworks: Buy the stock says Motilal Oswal

Broking firm, Motilal Oswal has a buy on the stock of Jubilant Foodworks for a price target of Rs 4,830.

“In addition to its delivery and value moat, Jubilant Foodworks is boosting its technological moat to enhance its lead over its QSR peers and aggregators. Improving its pre-order experience, usage of Hindi and regional languages, and setting up of its analytics and insights division are some of the efforts on this front,” Motilal Oswal has said.

“Robust growth in urban and rural internet penetration is likely to be boosted further by the launch of 5G technology. Online ordering is growing strongly, even in smaller centers. As a result, delivery and takeaway (a clear focus area going forward) will be the key drivers of SSSG in the next few years, even when dine-in recovers,” the brokerage has said.

Other reasons to buy the stock of Jubilant Foodworks

The company recorded its highest ever app downloads at 57.2m in FY21. Despite aggregators doing well, majority of Domino’s online sales are generated on its own platform. This is important as it reduces commissions and builds loyalty. “Besides driving sales, usage of its own app gives it access to granular consumer behavior, which helps in better decision making via menu curation, marketing enhancements, and store opening choices. In FY21, the company launched a Hindi version of its app. It is focused on adding support for other languages in its app to personalize the customer experience. The more Jubilant Foodworks expands its store network, greater would be the additional edge. We maintain our Buy rating on the stock with a taregt price of Rs 4,830 per share, ” Motilal Oswal has said.

Buy Ceat Ltd: HEM Securities

HEM Securities has a buy call on the stock for a price target of Rs 1,550, as against the current market price of Rs 1,309, implying an upside of nearly 20% on the stock.

Company has a good Capital expenditure plans lined up already. For the Chennai plant expansion, debottlenecking at the Halol plant and expansion in Off the Road Tyre segment. According to HEM Securities, the company has seen recent entries into Honda Bikes till 125 CC, Yamaha FZ 150 CC, Suzuki Gixxer 150 CC, Ashok Leyland Truck 1618, Daimler BSVI Trucks, Piaggio Aprilia 150 CC, Hyundai i20.

“The company targets to use 50% of its its FY23 power requirements from renewable sources,” the brokerage has said.

Ceat: Price target of Rs 1550

“Q1FY22 was subdued majorly due to weak demand and raw material cost inflation. Company is strongly focusing on passenger vehicles, OTR and 2 wheeler segments to boost their margins. We believe that strong CAPEX push for FY22-23 would be key driver in gaining CEAT’s market share in India. We also believe that company would gradually pass the raw material cost inflation by judicial price hikes and targeting gross margins of 40%-42%. We initiate a “BUY” rating on the stock and value the stock at 12x FY23E earnings to arrive at the target of Rs 1550,” says HEM Securities.

Disclaimer

The above stocks are based on the reports of brokerage firms. Investing in stocks is risky and investors should do their own research. The author, the brokerage firms or Greynium Information Technologies are not responsible for any losses incurred due to a decision based on the above article.