Indian Inc. banks on a favorable credit landscape, diverse portfolios and a shift towards high-yield assets following the second quarter earnings. Find out market trends with JM Financial’s recommendations – what’s hot and what’s not-
Piramal Enterprises
BUY I Target Price Rs 1,250
“The company is well-placed to benefit from the benign credit environment, diversified profile and driven by its transformation towards high yielding assets, we believe PEL should be able to deliver avg core RoA of 0.7% translating into avg RoEs of 4.8% over FY24/25E (high capitalization levels, Tier1 of 30% as of FY23). Strategic changes at key leadership positions, strengthening of the governance standards and meaningful process improvements should ensure continued delivery on growth and profitability. This should enable PEL to witness meaningful valuation upside. We initiate coverage with a BUY rating and a Target Price of Rs 1,250 (valuing core PEL business at 0.9x FY25E P/BV). Relapse of asset quality pressures is a key risk to our call.”
PNB Housing Finance
BUY I Target Price Rs 825
“Management remains confident on delivering a 22-23% growth in retail disbursements and expect 17-18% AUM growth in the retail business with affordable housing loans forming more 10% of overall disbursements mix. Asset quality in retail segment improved significantly (-75bps QoQ) at 1.74% GNPA. PNBHF has delivered ROAs north of 2% over the last couple of quarters. RoE uptick will follow up as it raises leverage from current levels. We like PNBHF’s reinvigorated strategy of focusing on prime+affordable segments and expect the stock to rerate driven by i) Healthy AUM growth led by retail book ii) Increasing proportion affordable housing offering higher yields and iii) Meaningfully lower credit cost compared to past cycle trends. We value the lender at 1.3x FY25E BV to arrive at our Target Price of Rs 825. Maintain ‘Buy’.”
Amber Enterprises
BUY I Target Price Rs 3,215
“Growth outlook for the mobility and electronics divisions remains robust (FY24E: 25-35%) with guidance of doubling their revenues by FY26 over FY24E base. Diversifications into components add to stability in the durables segment while greater thrust on the electronics and mobility segments should reduce earnings seasonality and aid growth. We estimate robust revenue/EPS CAGR of 19%/39% for Amber over FY23-26E. Maintain ‘Buy’ with revised Target Price of Rs 3,215 based on 30x Sept-25 EPS (30x FY25E EPS earlier).”
(The recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)
