Brokerages have companies like Ambuja Cements Ltd. and Laurus Labs Ltd. on their radar for the day. Ambuja Cements is in focus after the Adani Group company entered into a definitive agreement to acquire Penna Cement Industries Ltd. for Rs 10,422 crore.
NDTV Profit tracks what the brokerages are putting out on stocks and sectors. Here are all the top calls from analysts that you need to know about on Friday.
Emkay On Ambuja Cements
Emkay maintains 'buy' on Ambuja Cements with a target price of Rs 700 per share, a 5.4% upside from the previous close.
The acquisition of Penna Cement Industries allows the firm to secure a foothold in the southern market.
Deal pegged at favorable valuation of $89 per tonne.
Maintains preference for strong growth/capex plans, pan-India presence, robust balance sheet.
Consolidation in the sector to improve pricing, and profitability in the long term.
Expect small/mid-cap cement players to remain in momentum on ongoing mergers and acquisitions news flows.
Citi On Ambuja Cements
Citi maintains 'neutral' on Ambuja Cements with a target price of Rs 675 apiece, an upside potential of 1.7% from the previous close.
Acquisition of Penna Cement Industries to add total 16.5 tonnes to capacity.
Transaction EV/tonne at $93, close to greenfield replacement cost.
Transaction suggests company can deliver on growth plans.
Maintains 'neutral' stance as most positives appear priced in.
Penna cement limestone reserves total 630 tonnes.
Company to make PCIL cost-competitive.
Citi On Laurus Laboratories
The brokerage maintains 'sell' with a target price of Rs 320 per share versus the earlier target of Rs 315 apiece. This implies a potential downside of 27% from the previous close.
Values generics at 12 times in line with other generic players due to similarity in growth and risk profile.
Values the contract development and manufacturing organisation business at 24 times
Synthesis business valuation of 24 times is at 20% discount to sector leader.
Upside risks include better-than-expected numbers from synthesis, high traction in active pharmaceutical ingredient and non-antiretroviral formulations and sharp margin expansion.
Nuvama On Ambuja Cements
Nuvama maintains 'buy' on Ambuja Cements with a target price of Rs 767 per share, implying a potential upside of 15.5% upside from the previous close.
Brokerage likes the company on healthy capex plans, measures to lift cost efficiency.
Potential turnaround to Penne Cement's liquidity to enhance value for the Adani Group company.
Utilisation ramp-up at PCIL to bring additional volumes into market.
Adani Cements remains debt-free with cash of Rs 24,300 crore.
PCIL can achieve a similar turnaround like Sanghi Industries.
Kotak Institutional On Adani Ports
Kotak maintains 'buy' on Adani Ports & Special Economic Zone Ltd. and raised the target price to Rs 1,650 per share, implying a 17.5% upside from the previous close.
Volumes grew 14% in April–May 2024 versus low-to-mid single-digit growth in the market.
Expects outperformance to continue for long with a boost to margins.
Sees potential of growing existing capacity by 5–6 times over time.
Increases volume estimates by 5–6% for financial year 2026 and 2027.
Kotak Institutional on Real Estate
Residential real estate sector continues to scale new peaks.
All-India residential sales cross the 1-billion-square-foot mark in sales, growing 20% in fiscal 2024.
Among listed players, Godrej Properties Ltd., Prestige Estates Projects Ltd., Signatureglobal (India) Ltd. and Brigade Enterprises Ltd. reported strong pre-sales growth.
Demand in the fourth quarter of fiscal 2024 led by the Mumbai Metropolitan Region, Bengaluru and Hyderabad.
Overall inventory across the country reduced 6% YoY to 1.37 billion square feet.
Expects the sales momentum to continue unabated in FY2025.
Valuations for residential real estate stocks stand at 7–12 times adjusted EV/Ebitda
Top picks include DLF Ltd., Brigade and Signatureglobal.
CLSA On Prestige Estates
The brokerage retains 'buy' with a target price of Rs 2,320 apiece from Rs 1,875 per share earlier, implying an upside of 23.7%.
The stock has outperformed peers on a year-to-date basis and valuation is still at discount.
Company is targeting rental income to grow five times over the next four years.
Expecting pre-sales growth of 25–30% per annum.
Expects operating cash flow to support its capex and project pipeline growth.
Debt likely to increase but at comfortable levels.
Key concerns include lower project pipeline and increase in leverage due to high planned capex.
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