A couple of midcap and smallcap stocks are on analysts' radar following September quarter earnings. Some of the companies have continued to impress Street with their quarterly results. Others, while falling short of Street expectations, still look reasonably valued at the prevailing. Here are a few of them:
Tatva Chintan | ICICI Securities | Target Rs 2,860
ICICI Securities said Tatva Chintan Pharma Chem’s Q2FY23 revenue fell 27.1 per cent YoY and Ebitda plunged 68.9 per cent YoY due to lower SDA sales, which seems very disappointing, but it believes the situation is transitory. Though the company’s near-term performance is likely to be weak, potential for the next two years remains very strong and may surprise on the upside, said ICICI Securities. The brokerage has slashed its EPS estimates by 37 per cent for FY23E,but increased the same by 4.5 per cent for FY24E on better margin performance. It has raise its target price to Rs 2,860 from Rs 2,730 with the multiple unchanged at 40 times FY24E EPS.
TVS Motor | Nirmal Bang | Target Rs 1,279
Nirmal Bang said TVS is the front-runner on the EV front. The company plans launch a series of EV models in the range of 5-25kwh, both in two- and three-wheeler segments over the next two years, including a premium MC in collaboration with BMW, it noted. Also, the management indicated that it plans to scale up its EV capacity to 25,000 units per month by FY23-end, the brokerage said adding that TVS Motor has tied up with BPCL and CESL to set up the EV charging infra.
"We further see an optionality of monetisation of the EV arm going ahead, which would lead to further re-rating. We expect TVS to continue to outperform the 2W industry growth with a volume CAGR of 14 per cent over FY22-25E. We also factor in margin expansion of 250bps over the same period, owing to RM cost tailwinds and product premiumisation," it said while suggesting a target of Rs 1,279.
SKF India | Nuvama | Target Rs 4,990
Nuvama Institutional Equities said SKF India delivered a strong set of operational numbers, topping consensus Ebitda by 30 per cent. Top line for SKF India rose 12 per cent YoY, driven predominantly by a bigger industrial mix and improving aftermarket accessibility, it said adding that the upward trajectory in margins was fanned by price hikes and operating leverage.
Nuvama said the capex is on track and that SKF remains a key beneficiary of the recovery in the automotive cycle.
"We have upped our EPS by 4 per cent each for FY23E/24E led by better-than-expected margins. Maintain ‘BUY’ with a revised target of Rs 4,990 from Rs 4,550 ealier, as we roll forward earnings with an unchanged target multiple of 42 times," it said.
MAS Financial | Axis Securities | Target Rs 1,050
Axis Securities said MAS Financial Services reported yet another strong quarter. While operational performance in Q2 was marginally ahead of expectations, earnings were broadly in-line with expectations, Axis Securities said.
"With the economic activities picking up, MAS has pushed the growth pedal with a view to double the book over the medium term. The ramp-up in the direct distribution channel along with support from co-lending and fintech partners should drive growth moving forward. We believe MAS remains well-placed to deliver superior growth and return ratios while maintaining stable asset quality," it said.
The brokerage has a 'Buy' rating on the stock with a revised target price of Rs 1,050 per share, valuing it at 3.3 times FY24E book value.
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