Stylam, Medanta & 3 other stocks see brokerage initiations with upside potential of up to 52%

Select stocks including Stylam Industries, Global Health (Medanta), Olectra Greentech, Kalpataru Power Transmission and Fiem Industries saw a host of brokerage firms initiating coverage on them. A majority of these stocks have 'buy' ratings on them with an upside potential of up to 52 per cent. However, Olectra Greentech has been initiated by Geojit with an 'accumulate' tag, while the period for Kalpataru Power is 6-9 months. Here's what brokerage firms said on these counters:

Phillip Capital on Stylam Industries
Rating: Buy | Target Price: Rs 1,710 | Upside: 52%

China+1 strategy, increase in global certification for Indian brands, growth in real-estate registrations, a high number of commercial projects under implementation, pickup in private capex, and shift in demand to branded players will benefit Stylam, said Phillip Capital in its maiden report with a 'buy' tag and a target price of Rs 1,710, suggesting an upside of 52 per cent.

 

"We expect it to deliver a revenue CAGR of 26 per cent over FY22-25 backed by strong industry tailwinds, continues investments in technology and certification, increasing share of value-added products, strong focus on distribution/touch-point expansion and hiring a new sales team to cater to the domestic market, and shift from carpenter-based furniture to OEM/architect-based furniture," it said.

SMIFS of Global Health
Rating: Buy | Target Price: Rs 582 | Upside: 19%

"We like Medanta as it has one of the highest ARPOB in the industry, expanding its presence in under-penetrated markets which have 100 per cent cash and insurance patients resulting in superior payor mix than peers and in-house doctors against visiting consultants which resulted in 2.3x improvement in EBITDA margins from 9 per cent in FY18 to 20.8 per cent in FY22," said SMIFS.

Going ahead, as the bed utilization level would improve, the EBITDA margins will further improve to 23.7 per cent in FY25E due to operating leverage. We assign 19x EV/EBITDA on FY25E EBITDA and arrive at a target price of Rs 582 per share," said the brokerage in its initiating coverage report suggesting an upside of 19 per cent from its previous close.

BP Wealth on Fiem Industries
Rating: Buy | Target Price: Rs 1,853 | Upside: 11%

Fiem Industries has managed to add new clients and reduce debt significantly which is very impressive. 2-wheeler EVs will drive the next leg of growth. LED is the most compatible lighting solution and FIEM is one of the preferred suppliers for LED 2W lighting solutions. In FY21 automotive LED constituted 40 per cent of the total automotive lighting sales, said BP Wealth's IC report.

This has remained stable this year due to the pandemic but the management expects this to increase to around 60 per cent over the next 2-3 years. We expect the company to deliver healthy growth and outperform on the back of diverse product and client portfolio, healthy balance sheet and strong R&D capabilities, it said with a 'buy' rating and a target price of Rs 1,853 on the stock.

HDFC Securities on Kalpataru Power Transmission
Rating: Buy | Target Price: Rs 586-629 | Upside: 9-17%
"We remain bullish on the strong long-term outlook and revenue growth in the upcoming years for Kalpataru Power Transmission (KPTL). The company has an ambitious topline target of Rs 24,000 crore in FY25 and OPM in double digits then. We expect revenue/EBITDA/PAT to grow at a CAGR of 16.45%/21.02%/39.1% over FY22–25E," said HDFC Securities' first report on the stock.
 

It sees the base case fair value of the stock at Rs 586 and the bull case fair value at Rs 629 over the next two-three quarters. Investors can buy the stock in the band of Rs 528-539 and add more on dips to Rs 464-473 band for an upside target of up to 9 per cent and 17 per cent, respectively.

Geojit Financial Services on Olectra Greentech
Rating: Accumulate | Target Price: Rs 738 | Upside: 12%

EV adoption in buses is likely to speed up in the current year, and the center plans to procure 50,000 buses with an investment outlay of Rs 1,000 crore. Olectra bagged the biggest-ever order of 2,100 electric buses worth Rs 3,675 crore. The company received this order from BEST (Brihanmumbai Electric Supply and Transport), Mumbai, said Geojit's IC report.

The technical partnership between Olectra and Reliance on the Hydrogen Bus project is officially expected to launch next year. With the formation of a JV with BYD China for electric buses, the company is expanding its product line in the e-mobility segment for 3-wheeler electric autos and electric truck tippers, with an 'accumulate' rating and a target price of Rs 738.


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