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ITC: The brokerage has a 'buy' all on the stock with a target at ₹310, indicating an upside of 13 percent. As per Kotak, ITC reported a well-rounded previous quarter. The firm offer combination of decent growth, dividend yield and inexpensive valuation, added the brokerage. It expects ITC's earnings to grow by 15 percent in FY23E and by 8.1 percent in FY24E. The stock is currently trading at valuation of 18.0x P/E FY24E earnings, added the brokerage.
L&T: The brokerage is bullish on the stock with a target price of ₹2,025, indicating an upside of around 30 percent. The brokerage noted that L&T's Q4FY22 results negatively impacted by externalities, margin being hit the most. Inflationary environment would limit recovery in margin, it added. Investment in new age technologies/assets in next 5 years, selling road assets are also key positives, said Kotak. It expects the firm to grow revenues and order inflows at a CAGR of 15 percent during FY21-26.
Max Health: The brokerage sees the stock rising nearly 12 percent and has a target price of ₹410. It has an 'add' recommendation on the stock. As per Kotak, Max's key growth drivers include an improved mix, a doubling of capacities to drive growth. Robust execution to bring out sustained strength across metrics, it added. Strong free cash flow generation supports organic and inorganic growth aspirations stated the brokerage. Sales concentration, delay in payor mix recovery and fallout in agreements are key risks.
Phoenix Mills: Kotak is positive on the stock and has a buy call with a target at ₹1,380, implying an upside of over 17 percent. In the Markch quarter, the company Reported 28 percent and 39 percent YoY increase in revenues & operating profit (EBTIDA). Robust growth in commercial and hospitality segment was aided revenue growth, said the brokerage. Strong pre-leasing, execution of under construction projects and prospects for the hospitality business give visibility for earnings growth, it added.
Sapphire Foods: Kotak ahs a 'buy' call on the stock with a target price of ₹1,425 per share, implying a potential upside of 31 percent. Kotak expects Sapphire to be one of fastest growing QSR chains in India. It forecasts its EPS of 17.4 in FY23E and EPS of 25.3 in FY24E. Kotak expects 340 bps operating margin expansion to 13.9 percent over FY22-25E and internal accruals to meet capex requirement. Economic slowdown and consumer preference towards healthier option are key risks.
State Bank of India: Kotak expects the public sector lender to rise over 50 percent to ₹700 going ahead. It has a 'buy' call on the stock. According to the brokerage, the recovery in RoEs is led by lower credit costs. It also sees operating profits having a good tailwind from operating leverage. The recovery in earnings and RoE is a classical recovery in credit cycles and there is a high probability that the RoEs could surpass 15%+ level, added Kotak. The valuations are still quite undemanding to change our view, said the brokerage.
Tata Motors: The brokerage has a 'buy' call on the stock with a target price of ₹470, indicating an upside of 14 percent. The firm's Q4FY22 consolidated EBITDA came broadly in line with Kotak's expectations and it believe Tata Motors is the best bet to play on global automotive cycle recovery. However, the near-term may pose some challenges for the company. It expects earnings per share of ₹13 in FY23E and ₹38.6 in FY24E.