Radico Khaitan, KFin Tech, City Union Bank: Target prices for 3 stocks

ICICI Securities on Monday upped its target price on City Union Bank Ltd, initiated coverage on Radico Khaitan Ltd with a "Buy' rating and kept its price target unchanged on Kfin Technologies Ltd post Q4 results. Shares of City Union Bank were trading 3.28 per cent higher at Rs 179.25. Radico Khaitan shares were up 2.92 per cent at Rs 2,515.  KFin Technologies fell 3.98 per cent to Rs 1,089.80. 

City Union Bank

In the case of City Union Bank, its Q4 results were marked by fee income-led strong profitability and steady return on asset (RoA). The guidance on net interest margin (NIM) and asset quality was quite strong. Despite 70 per cent of bank's portfolio being floating rate -- of which 48 per cent is EBLR linked), the management stayed confident of defending margins in the range of 3.6 per cent. 

ICICI Securities has revised its target on the stock to Rs 210 from Rs 200. Another brokerage Axis Securities sees the stock at Rs 225 "City Union Bank intends to continue the business growth momentum it has picked up in FY25 while focusing on delivering a sustainable RoA of 1.5 per cent. We expect NIM pressures to surface in the next couple of quarters and the benefit of the deposit rate cuts taken to be realised with a lag. However, they will continue to find support from the multiple measures undertaken by the bank to minimise the hit on NIMs," Axis Securities said. 

KFin Technologies
ICICI Securities likes KFIN Technologies for its business growth potential perspective over the next 3–5 years, basis core Indian mutual fund Registrar and Transfer Agent. It said the long-term AUM outlook for KFin Tech is a very safe lever along with near-term triggers such as introduction of new asset class. This, along with possible traction in international business, alternates and corporate registry add to KFin Technologies' appeal.

"New wins, organic as well as inorganic product suites across FA and TA should help to achieve continued client wins and to embark new segments such as wealth management," it said while suggesting a target price of Rs 1,248 on the stock. 

Radico Khaitan
ICICI Securities aid Radico Khaitan is the only Indian spirits company to have successfully crafted eight ‘millionaire’ brands. It has achieved this over the past 25 years despite the stiff competition in the IMFL industry, the domestic brokearge said/

"Radico Khaitan's strong performance is a blend of its ability to launch products in the niche category (ignored by large players) and differentiate products in the growing Indian single malt market. We believe the company’s sector-leading volume/revenue CAGRs of 15 pre cent/22 per cent in P&A could extend over FY25–27E, the brokerage said.

Further, investment in backward-integration with softer raw material prices should improve its Ebitda margin by 200 bps over FY25–27, the broking firm said. 

Radico Khaitan's capability to introduce brands with superior quality and better execution would be key drivers for revenue/earnings CAGRs of 16 per cent/39 per cent over FY25–27E – which should help in sustaining its premium valuation. ICICI Securities initiated coverage on the stock with 'Buy' and a DCF-based target of Rs 2,900.