Phoenix Mills, TCI Express, DLF, GSPL and Greenpanel Ind: Here's what analysts said on these 5 stocks
TCI Express has reported healthy growth over the last 7 years as it leveraged its wide distribution and infrastructure reach and had asset light model with longstanding relations with vendors
- Dec 7, 2022,
- Updated Dec 7, 2022 8:51 AM IST
Phoenix Mills' November sales data managed to earned it a 'Buy' from a domestic brokerage. PNGRB's recent amendments with regards to natural gas pipeline tariffs has made GSPL looks attractive, said another brokerage. A broking firm has initiated coverage on TCI Express while another brokerage has discontinued coverage on Greenpanel Industries following the gains on the counter. Most positives are priced in for DLF, said another brokerage.
Phoenix Mills| Nuvama| Buy| Target Rs 1,821
Consumption at malls of Phoenix Mills in November stood at Rs 720 crore—this is 127 per cent of the November 2019 levels (113 per cent on a like-to-like basis). Year-over-year consumption rose 10 per cent in November. Year-to-FY23 consumption stands at Rs 6,070 crore, which is 115% of the Apr–Nov 2019 (LTL basis). Phoenix Mills is also witnessing strong recovery in occupancy and ARRs in its hospitality portfolio (St. Regis recorded highest-ever monthly revenue in November) while traction in commercial leasing and residential sales also remains healthy.
Consolidation in the realty space and Phoenix's leadership in retail realty and unique understanding of the Indian consumer’s psyche coupled with the structural story of urban consumption growth has enabled it to weather the Covid-19 storm. Entry in new cities and operationalisation of under-construction/planned assets are some of the stock triggers that may play out over the next few years. Revival in consumption in malls and occupancy in hotels, and liquidation of ready inventory in the housing segment are likely to culminate in robust cash flows.
Gujarat State Petronet (GSPL) | Sharekhan| Buy | Target Rs 342
Recently the PNGRB has announced several amendments in natural gas pipeline tariff. Key amendments include – Relaxed volume ramp-up period to 10 years, allowance of transmission loss at 0.1 per cent, tax rate of 25 per cent for tariff applicable from FY24 and non-retrospective and exclusion of pipeline capacity addition for tariff calculations due to addition of new gas source.
Amendments on prospective applicability of a tax rate of 25 per cent for tariff calculation and allowance of transmission loss at 0.1 per cent would allay concern over steep tariff cuts of 15-20 epr cent to large extent, Sharekhan said adding that volume ramp-up and exclusion of new gas source bodes well for revival in gas pipeline capex cycle.
"Core pipeline business is effectively available free to investors as market value of GSPL’s investment in Gujarat Gas (after assuming 20 per cent holding company discount) is close to GSPL’s current market capitalisation of Rs 15,070 crore). We maintain a Buy on GSPL with a revised PT of Rs 342 as assign higher valuation multiple to core pipeline business given PNGRB amendments removes tariff overhang and higher value for stake in Gujarat Gas (at 40 per cent holding company discount to our target of Rs 560)," Sharekhan said.
TCI Express | Kotak Securities | Buy Target Rs 2,275
Kotak Securities said TCI Express has reported healthy growth over the last 7 years as it leveraged its wide distribution and infrastructure reach and had asset light model with longstanding relations with vendors. The company, Kotak Securities said, has diversified less than Truck Load (LTL) client base and has one contact point for express logistics solution. Besides, it is seeing structural shift of volumes from air to road. TCI claims to have a market share of 7 per cent in express industry.
"Going forward, we estimate the above factors and investment in sorting centres, automation and technology to drive revenue and earnings CAGR of 17 per cent/20.5 per cent respectively over FY22 to FY25E, with improvement in operating margins and healthy return ratios. We initiate coverage on TCI Express with a target of Rs 2,275 at 37 times FY25E earnings and a ‘BUY’ rating," Kotak said.
DLF| Motilal Oswal Securities | Neutral | Target Rs 414
In FY21, said Motilal Oswal Securities, DLF identified a project pipeline of 35msf across different segments to be launched in New Delhi, Gurugram, Chennai, Panchkula and Goa where it continued to hold legacy land parcels. Except ONE Midtown, Delhi, the new launches for DLF since FY21 have largely comprised low-rise floors/plotted developments across its value homes/luxury segments in Gurgram, Chennai and Panchkula. Starting H2FY23, DLF's launch pipeline of 12.5msf for the next 18 months is expected to be skewed towards high-rise projects having saleable potential of 6.5msf worth Rs 16,000 crore, the brokerage said. The feedback from brokers suggests response to the high-rise projects especially in Gurugram is likely to be strong as it will be the first high rise project in Gurugram after a gap of 7-8 years, Motilal said.
"We raise our FY23E/FY24E pre-sales by 4 per cent/22 per cent, respectively, to incorporate higher realisations and anticipated stronger responses to new launches in FY24E. While we remain confident on DLF's growth trajectory in both its residential and commercial businesses, a large part of it appears to be already priced in. We reiterate our Neutral rating on the stock," it said.
Greenpanel Industries | Sharekhan | Coverage discontinued | Book profit
Brokerage Sharekhan has advised investors to book profit in Greenpanel Industries with a handsome gain of 54 per cent since its initiation report dated May 19, 2021. The brokerage has discontinued coverage on the stock due to weak growth outlook in the next few quarters because of increasing competitive intensity from imports as well as domestic peers.
"Monthly MDF imports have more than quadrupled during September-November 2022. Weak demand outlook in the US and Europe coupled with lower ocean freight rates made imports much more viable and cost effective. Hence, Greenpanel could face higher competitive pressure domestically as well as pressure on realisations in the exports market," it said.
The sharp correction in MDF export prices, lower domestic volumes, and high domestic MDF capacity additions are likely to lead to erosion in OPM and lower net profit growth during FY2023E-FY2025E, the brokerage said.
Also Read: Hatsun Agro Products to go ex-rights today; Hinduja Global Solutions to turn ex-dividend
Phoenix Mills' November sales data managed to earned it a 'Buy' from a domestic brokerage. PNGRB's recent amendments with regards to natural gas pipeline tariffs has made GSPL looks attractive, said another brokerage. A broking firm has initiated coverage on TCI Express while another brokerage has discontinued coverage on Greenpanel Industries following the gains on the counter. Most positives are priced in for DLF, said another brokerage.
Phoenix Mills| Nuvama| Buy| Target Rs 1,821
Consumption at malls of Phoenix Mills in November stood at Rs 720 crore—this is 127 per cent of the November 2019 levels (113 per cent on a like-to-like basis). Year-over-year consumption rose 10 per cent in November. Year-to-FY23 consumption stands at Rs 6,070 crore, which is 115% of the Apr–Nov 2019 (LTL basis). Phoenix Mills is also witnessing strong recovery in occupancy and ARRs in its hospitality portfolio (St. Regis recorded highest-ever monthly revenue in November) while traction in commercial leasing and residential sales also remains healthy.
Consolidation in the realty space and Phoenix's leadership in retail realty and unique understanding of the Indian consumer’s psyche coupled with the structural story of urban consumption growth has enabled it to weather the Covid-19 storm. Entry in new cities and operationalisation of under-construction/planned assets are some of the stock triggers that may play out over the next few years. Revival in consumption in malls and occupancy in hotels, and liquidation of ready inventory in the housing segment are likely to culminate in robust cash flows.
Gujarat State Petronet (GSPL) | Sharekhan| Buy | Target Rs 342
Recently the PNGRB has announced several amendments in natural gas pipeline tariff. Key amendments include – Relaxed volume ramp-up period to 10 years, allowance of transmission loss at 0.1 per cent, tax rate of 25 per cent for tariff applicable from FY24 and non-retrospective and exclusion of pipeline capacity addition for tariff calculations due to addition of new gas source.
Amendments on prospective applicability of a tax rate of 25 per cent for tariff calculation and allowance of transmission loss at 0.1 per cent would allay concern over steep tariff cuts of 15-20 epr cent to large extent, Sharekhan said adding that volume ramp-up and exclusion of new gas source bodes well for revival in gas pipeline capex cycle.
"Core pipeline business is effectively available free to investors as market value of GSPL’s investment in Gujarat Gas (after assuming 20 per cent holding company discount) is close to GSPL’s current market capitalisation of Rs 15,070 crore). We maintain a Buy on GSPL with a revised PT of Rs 342 as assign higher valuation multiple to core pipeline business given PNGRB amendments removes tariff overhang and higher value for stake in Gujarat Gas (at 40 per cent holding company discount to our target of Rs 560)," Sharekhan said.
TCI Express | Kotak Securities | Buy Target Rs 2,275
Kotak Securities said TCI Express has reported healthy growth over the last 7 years as it leveraged its wide distribution and infrastructure reach and had asset light model with longstanding relations with vendors. The company, Kotak Securities said, has diversified less than Truck Load (LTL) client base and has one contact point for express logistics solution. Besides, it is seeing structural shift of volumes from air to road. TCI claims to have a market share of 7 per cent in express industry.
"Going forward, we estimate the above factors and investment in sorting centres, automation and technology to drive revenue and earnings CAGR of 17 per cent/20.5 per cent respectively over FY22 to FY25E, with improvement in operating margins and healthy return ratios. We initiate coverage on TCI Express with a target of Rs 2,275 at 37 times FY25E earnings and a ‘BUY’ rating," Kotak said.
DLF| Motilal Oswal Securities | Neutral | Target Rs 414
In FY21, said Motilal Oswal Securities, DLF identified a project pipeline of 35msf across different segments to be launched in New Delhi, Gurugram, Chennai, Panchkula and Goa where it continued to hold legacy land parcels. Except ONE Midtown, Delhi, the new launches for DLF since FY21 have largely comprised low-rise floors/plotted developments across its value homes/luxury segments in Gurgram, Chennai and Panchkula. Starting H2FY23, DLF's launch pipeline of 12.5msf for the next 18 months is expected to be skewed towards high-rise projects having saleable potential of 6.5msf worth Rs 16,000 crore, the brokerage said. The feedback from brokers suggests response to the high-rise projects especially in Gurugram is likely to be strong as it will be the first high rise project in Gurugram after a gap of 7-8 years, Motilal said.
"We raise our FY23E/FY24E pre-sales by 4 per cent/22 per cent, respectively, to incorporate higher realisations and anticipated stronger responses to new launches in FY24E. While we remain confident on DLF's growth trajectory in both its residential and commercial businesses, a large part of it appears to be already priced in. We reiterate our Neutral rating on the stock," it said.
Greenpanel Industries | Sharekhan | Coverage discontinued | Book profit
Brokerage Sharekhan has advised investors to book profit in Greenpanel Industries with a handsome gain of 54 per cent since its initiation report dated May 19, 2021. The brokerage has discontinued coverage on the stock due to weak growth outlook in the next few quarters because of increasing competitive intensity from imports as well as domestic peers.
"Monthly MDF imports have more than quadrupled during September-November 2022. Weak demand outlook in the US and Europe coupled with lower ocean freight rates made imports much more viable and cost effective. Hence, Greenpanel could face higher competitive pressure domestically as well as pressure on realisations in the exports market," it said.
The sharp correction in MDF export prices, lower domestic volumes, and high domestic MDF capacity additions are likely to lead to erosion in OPM and lower net profit growth during FY2023E-FY2025E, the brokerage said.
Also Read: Hatsun Agro Products to go ex-rights today; Hinduja Global Solutions to turn ex-dividend