Hudco, Tilaknagar Industries, Five Star: Brokerages initiates coverage with up to 41% upside

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Select stocks including Housing & Urban Development Corporation Ltd (Hudco), Five-Star Business Finance Ltd and Tilaknagar Industries Ltd have seen fresh interest from the various brokerage firms, who have recently initiated their coverage on them The brokerages, including Elara Capital, Motilal Oswal and Systematix Institutional Equities have launched their maiden reports on these stocks with an upside potential of up to 41 per cent. Here’s why these analysts are positive on them:

Elara Capital on Housing & Urban Development Corporation
Rating: Buy | Target Price: Rs 297 | Upside: 28%

Housing & Urban Development Corporation (Hudco) is a niche play on difficult markets via affordable housing & urban infrastructure financing despite scalability and profitability constraints. With a 15 per cent loan CAGR over FY23-30E Hudco would be a proxy play on Indiaā€™s infrastructure and housing story, said Elara Capital.

“HUDCO is demanding scarcity premium for being biggest beneficiary of GoI thrust on housing/infra, its niche business model characterized by high entry barriers, information asymmetry, distribution arbitrage backed by its liaison with GoI and Management stability all of which is supportive of strong business visibility,” it said with a ‘buy’ rating and a target price of Rs 297.

Motilal Oswal on Five Star Business Finance
Rating: Buy | Target Price: Rs 950 | Upside: 27%

Five-Star Business Finance is a NBFC that provides small business loans (SBL) predominantly to micro-entrepreneurs, self-employed individuals, or informal salaried individuals for working capital, asset creation, or personal expense purposes. These loans are secured against collateral. Five Star has delivered an AUM CAGR of 25 per cent over FY20-FY24, said Motilal Oswal.

“Five Star’s key states are Andhra Pradesh, Telangana, Tamil Nadu, and Karnataka, which together contribute 94 per cent of the AUM. The company has 520 branches spread across 10 states and UT. We initiate coverage on the stock with a ‘buy’ rating and a target price of Rs 950,” it added, citing concentration in southern India and rising competitive intensity as the Key downside risks.

Systematix Institutional Equities on Tilaknagar Industries
Rating: Buy | Target Price: Rs 317| Upside: 41%

Tilaknagar Industries is a leading brandy-focused player with strong presence in South India. It is currently scouting for multiple initiatives in premiumization and expanding its portfolio/geography. It has risen from its difficult past where the company committed some strategic errors and has chalked out a clear growth roadmap for the medium to long term, said Systematix.

“We estimate revenue, ebitda and PBT CAGR of 13.3 per cent, 18.6 per cent and 29.9 per cent over FY24-26E, respectively, led by 12.3 per cent CAGR in volumes without building in any contribution from new non-brandy segments. The stock holds significant re-rating potential, considering its debt free balance sheet, 20 per cent RoE and above-industry growth,” it said with a ‘buy’ and target price of Rs 317.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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