Macrotech, MPRL, Craftsman, SJS, RateGain ZEEL: 8 stocks see brokerage initiations this week

Macrotech Developers, MPRL, Craftsman Automation, SJS Enterprises, RateGain Travel Technologies, Muthoot Finance, Zee Entertainment and Manappuram Finance have found a 'buy' rating from the host of brokerage firms, who have initiated coverage on that particular company.

Brokerages including Anand Rathi, HDFC Securities, SMIFS, Morgan Stanley, Motilal Oswal and Kotak Securities have launched their maiden reported in select stocks and see up to 28 per cent rise in these counters. Here's what is making these brokerages positive on them:

SMIFS on SJS Enterprises
Rating: Buy | Target Price: Rs 593 | Upside: 32%
SMIFs recommended to 'buy' as the next leg of growth will come from the combination of cross-selling Exotech-SJS products to each other clients, selling higher realization new generation products developed in-house; aims to grow exports faster; premiumization in auto/consumer durables; and mining existing accounts along with acquiring new customers domestically as well as overseas.

It has given a target price of Rs 593, hinting an upside of xx per cent from its latest close at Rs xx. SMIFS have highlighted subdued export markets and uncertain supply chain situation for OEMs as the biggest risks for the company. SJS is a technology agnostic company with no risk of EV transition, it said.

HDFC Securities on Macrotech Developers
Rating: Buy | Target Price: Rs 1,249| Upside: 26%
Macrotech Developers benefits from the Indian real estate upcycle as it navigates through new markets like Bengaluru and further consolidates its market share in new regions of MMR and Pune. Since listing, it has laid great emphasis on deleveraging; outperformed on growth-related drivers like industry-leading GDV addition, presales; and excelled in cash flow generation and right capital allocation, said HDFC Securities.

"Asset-light land bank addition, new product introduction and non-core land bank monetization shall restrict leverage and help deliver growth. MDL has built a strong ecosystem of financing, land tie-ups, branding, execution, ESG, innovative products, and land bank monetization," it said in its maiden report with a buy rating and a target price of Rs 1,249.

Motilal Oswal on Craftsman Automation
Rating: Buy | Target Price: Rs 3,925 | Upside: 16%
Craftsman demonstrated track record of creating and gaining market leadership organically is not very common in the auto component industry. RoE will improve by 4.6 per cent to 22.3 per cent by FY25E. This has enabled the company to maintain its good balance of strong growth and superior capital efficiencies, placing it in the top quartile of the auto component industry, said Motilal Oswal.

It sees faster electrification in CVs and tractors, lower than anticipated growth in underlying industries, iii) risk of macro headwinds in developed markets, as the hey downside risks. "We initiate coverage on the stock with a buy rating and a target price of Rs 3,925," it said.

Anand Rathi on Mangalore Refinery & Petrochemicals
Rating: Buy | Target Price: Rs 66 | Upside: 20%
The 15mtpa Mangalore Refinery and Petrochemicals is a play on refining and petrochem in South India, promoted by ONGC and HPC. The high refining-margin context and robust demand would support earnings, creating shareholder wealth with lower debt, said Anand Rathi.

Falling crude prices and discounted crude sourcing have reduced working capital and eased debt, it added with a buy rating target price of Rs 66. The brokerage has cited lower GRM environment, change in crude prices and inventory losses, adverse government policy – subsidy-sharing.

Morgan Stanley on Muthoot Finance
Rating: Equalweight | Target Price: Rs 1,150 | Upside: 14%
"Our price target of Rs 1,150 per share for the consolidated entity is our base case scenario value. We derive it using a base case sum-of-the-parts valuation. We use a cost of equity of 13 per cent, assuming a beta of 1.0, a risk-free rate
of 7.5 per cent and a market risk premium of 5.5 per cent," said Morgan Stanley in initiating coverage report.

"We assume a terminal growth rate of 6 per cent, similar to that for other financials in our coverage. We assume terminal ROE of 16 per cent. We value the standalone business at Rs 1,099 per share, implying 1.7x September 2024 P/standalone BV in our residual income valuation," it said.

Kotak Securities on RateGain Travel Technologies
Rating: Overweight | Target Price: Rs 450 | Upside: 21%
RateGain is a leading travel and hospitality industry-specific SaaS player focused on revenue maximization for clients. The company competes with a broad set of product offerings in a highly fragmented market, with many points solution-oriented players, said Kotak Securities in maiden coverage report.

Its ability to cross-sell an expanding product suite would drive wallet share gains and 20% organic US dollar revenue CAGR over FY2022-25E. Valuations are reasonable at 3.5X EV/sales FY2025E, it said initiating coverage with a fair value at Rs 450.

Morgan Stanley on Manappuram Finance
Rating: Overweight | Target Price: Rs 150 | Upside: 28%
"Our price target of Rs 150 per share for the consolidated entity is our base case scenario value. We derive it using a base case sum-of-the-parts valuation. We use a cost of equity of 14.4 per cent, assuming a beta of 1.25, a risk-free rate of 7.5 per cent and a market risk premium of 5.5 per cent, said Morgan Stanley in its initiating coverage report.

"We assume a terminal growth rate of 6 per cent, similar to that for other financials in our coverage. We assume terminal ROE of 14 per cent. We value the standalone business at Rs123 per share, implying 1.1x September 2024 P/standalone BV in our residual income valuation," it said.

Keynote Capitals on Zee Entertainment Enterprises
Rating: Buy | Target Price: Rs 253 | Upside: 15%
Zee Entertainment Enterprises Ltd. (ZEEL) was incorporated in 1992 as India’s first private satellite TV channel. Besides Hindi, the company pioneered sports and movie genres. Over decades, the company branched out to movie production (Zee Studios), music production (Zee Music), live events organization (Zee Live), and digital broadcasting (Zee5), it said in its maiden report.

"In 2021, ZEEL entered into a definitive agreement to merge with Culver Max Entertainment (CME), whose operating name is Sony Pictures Network India. This merger will infuse growth capital of Rs 9,000 crore into the combined entity. Given the potential synergies, strong market hold, and growth opportunities for the combined entity," it said with a buy rating and a target price of Rs 253.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)
 

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