Symphony, UtlraTech Cement, and RBL are on the radar of Geojit Financial Services
Geojit Financial Services recommends the following stocks:
Rating: BUY CMP: Rs1,270 TP: Rs1,418
Symphony is the largest air cooler manufacturer with a market share of ~50 percent in the organised market in India.
Led by strong R&D, launched more than 40 new products in the last six years. Its asset light business model has enabled the company to sustain its EBITDA margin level above 20 percent and ROCE above 40 percent over the years. Introduction of new premium range of air coolers will prove to be margin accretive in the long run. We expect earnings to grow at 22 percent CAGR over FY17-19E led by volume growth. We have a Buy rating with target price of Rs1,418.
Rating: BUY CMP: Rs4,165 TP: Rs4,514
UltraTech Cement Ltd. (Ultratech), part of the Aditya Birla Group, is the largest producer of grey & white cement and ready-mix concrete in India.
Ultratech has completed the acquisition of Jaiprakash Associates’ assets in Q1FY18 and overall capacity has increased by 21.2 MT to 93 MT. The focus now is to improve the operational efficiency and utilisation level of the acquired assets to 60 percent over the next one year and 70 percent by FY19. We expect the acquisition will be earnings dilutive in the short run, however the volumes are likely to grow at 19 percent CAGR over FY17-19E led by steady ramp up of Jaypee assets and pickup in demand from housing and infrastructure sectors.
Rating: Accumulate CMP:Rs539 TP:Rs591
RBL Bank Ltd. has emerged as one of the fastest growing private sector banks with a network of 215 branches and 374 ATMs.
RBL Bank continue to maintain high growth momentum with 40 percent YoY growth in advances and 45 percent YoY growth in earnings during Q1FY18. Higher earnings growth, steady asset quality, improving business mix and above industry average loan growth will help the bank to sustain premium valuations over new generation private sector banks.
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