The markets are moving upwards in bits and pieces. As the Nifty rallies towards 23,000, here are some interesting Buy recommendations by JM Financial Institutional Securities. The recommendations are based on share valuations as well as key sectoral dynamics.
JM Financial Institutional Securities On Suzlon
JM Financial Institutional Securities has maintained a Buy rating on Suzlon with a target of Rs 71 per share. This implies a 24% upside from current levels for the stock. With their order book at the highest-ever levels and growing, it now stands at 5.9GW. As a result, Suzlon remains upbeat about the revival of the industry and the resolution of execution challenges in the next 2-3 quarters.
ALSO READWhy Nuvama sees 35% upside in Pidilite? 3 key factors are…
According to JM Financials, “initiatives to enhance capabilities to handle more volume and higher-rating WTGs” a positive. The report added that “the area of the shop floor is under expansion by converting the existing warehouse into the new hub assembly shop. The capacities of EOT cranes in both shops and loading areas have been increased. With this, the manufacturing capacity of the company will increase from 3.15GW to 4.5GW, taking together capacities at both Daman and Pondicherry plants.”
However, given execution challenges constraining growth beyond FY27, they have moderated the earnings estimates and lowered the target price from Rs 80 per share earlier.
JM Financial Institutional Securities On Tata Communication
The second stock in focus is Tata Communication. JM Financial Institutional Securities initiated coverage with a Buy rating and a target price of Rs 2,030 per share. This implies a nearly 35% upside based on “11x FY27 EV/EBITDA multiple for the data segment at a slight premium to last 5 years historical average of 10.2x as we expect data segment EBITDA to grow at a robust CAGR of 21% over FY24-28.”
ALSO READWhy is this telecom penny stock rallying 5% today? The big trigger is….
The key risks, according to JMFinancial Institutions include “weak global macros leading to deferment in discretionary tech spends and adverse AGR ruling.” However, they believe that Tata Communications “competitive edge is its ownership of the world’s largest network of sub-sea cables spanning over 500,000 km; this provides significant operating leverage and has led to EBITDA margin improving to 45% in FY24 from 30.1% in FY18.”
Further,
» Read More
