Brokerage Radar: Alkem Labs gets neutral calls, but Alembic Pharma, Biocon see downgrades

Stock Market Radar

Check out the latest brokerage calls and analyst comments on the stocks in action today. Our coverage includes Alkem Laboratories, Trent, Zydus Life, Biocon, and ABB India, among others.

Alkem Laboratories

Nomura On Alkem Labs
Neutral Call, Target Rs 5,605/Sh
Q1 Sales Below; EBITDA Ahead Of Estimates
Co Retained Its EBITDA Margin Guidance Of 18% In FY25
Co Expects Higher Investments In New Initiatives, Specifically Biologics
Biologics Likely To Elevate Operating Expenses In Near Term
Stock Is Currently Trading At 31.1x/ 25.4x FY25/26 EPS Of `182.6/`224.2

Jefferies On Alkem Labs
Underperform Call, Target Rs 5,080/Sh
Strong Margin Expansion Of 20.1% Driven By Lower Raw Material Cost
Opex Drove A Strong Q1 Beat Despite Weak Revenue Growth
Despite A Strong Q1, Co’s Mgmt Retained Its EBITDA Margin Guidance Of 18% For FY25
Co’s Retained EBITDA Margin Guidance Of 18% For FY25 Citing Higher Opex In Coming Quarters
Co’s Growth Will Remain Below Peers And Margin Normalisation Is Some Time Away
Increase FY25-27 EPS Estimate By 1-4%

Kotak Instl Eq On Siemens
Sell Call, Target Rs 4,600/Sh
Sharp 20% Miss On Q3FY24 Results
Co Saw Belying Strength Seen In Execution Of Late & Largely Reversing Uptick In Margin
Order Inflows Were Strong, Up 18% YoY, Suggesting Prospects Of Uptick In Execution With A Lag
Results Continue To Lag ABB, Potentially Reflecting Difference In Customer Connect Built Over Time
Cut PAT Estimate By 8-10%

Citi On Jubilant Food
Buy Call, Target Rs 715/Sh
Operational Performance Continued To Improve
Overall LFL Was 3% Vs Est Of 2% With Delivery LFL Of 12.1% Led By Multiple Initiatives
Dine-in Sales Were Weak, Down 5.7% YoY & Up 4.6% QoQ
Recent Initiatives Will Likely Drive Further Improvement In Dine-in Sales
Improvement In Dine-in Sales Will Lead To Overall LFL Improvement Going Forward
Conversion Rates Were Best Ever, Leading To 16% Order Growth YoY

Nomura on Info Edge
Buy Call, Target Rs 8,280/Sh
Core Recruitment Continues To Bounce Back
Losses In Other Businesses Also Reducing
Recruitment Vertical — Consultant Segment Grows After Four Quarters Of Decline
Real Estate — Reported Moderation In Billings Growth
Revise FY25-26 EPS By 1-4%

Nomura On Balkrishna Ind
Neutral Call, Target Rs 3,115/Sh
Q1 EBITDA Ahead Of Estimates
Weak Global Demand To Delay Expected Recovery With Current Valuations Pricing This In
Management Says Demand Outlook Remains Tepid For Rest Of Year Due To Macro Challenges
Co Expects Minor Volume Growth In FY25

Jefferies On ABB India
Buy Call, Target Raised To Rs 9,230/Sh
Q2CY24 EBITDA Was 17% Higher Than Expectations
Q2CY24 EBITDA Beat Estimates As 630 bps YoY Gross Margins Expansion Offset 11% Revenue Miss
Pricing Power And Revenue Mix Drove 360 bps Margin Expansion
Co Saw `200 Cr Revenue Impact From Execution Deferral To Match Customer Delivery Timelines
Co Saw `200 Cr Revenue Impact In An Election Quarter
Should Pick Up Revenue Ahead
Order Flows Rose 13% YoY & Outlook Remains Robust
Raise CY24-26 EPS By 4-6%

Nomura On Eureka Forbes
Buy Call, Target Rs 573/Sh
Co Is On Improving Growth Trajectory
Q1 Ahead Of Estimates; Premium Launches Picking Up Well
Margin Tailwinds In Place; Valuation Attractive At 35x FY26 P/E

Jefferies On Zydus Life
Hold Call, Target Raised To Rs 1,210/Sh
Co Delivered A Strong Q1 Led By US With EBITDA Margin At An All-time High Of 34%
US Grew 23% QoQ To $373 m Driven By gRevlimid And Gmirabegron Contribution
Co Increased Its FY25 Revenue And Margin Guidance
There Could Be A Positive Surprise If Key Products Ramp Up Further
FY25-27 EPS Increase By 2-5% On Higher Sales And Margins & Delay In Gasacol HD Competition
Await Better Entry Points

MS On Trent
Equal-Weight Call, Target Rs 4,812/Sh
Q1 Beat On The Top Line & Margins
Management Says Co Will Continue To Expand & Deepen Store Presence
Co’s Focus Is On Being Closer To And Convenient For Customers
Fashion Business Had Double-digit LFL Growth (10% In Q4, +10% In Q3)
Operating EBIT Margin For Fashion Business Improved To 10.6% YoY (7.8% In Q1FY24)
Gross Margin For Both Formats Were Consistent With Prior Trends
Grocery Format Showed Continued Improvement In Customer Traction & Sales Densities

HSBC On Alembic Pharma
Downgrade To Reduce, Target Rs 1,080/Sh
Q1 Miss; Except In-line Sales In US, Other Segments’ Sales Were Below Est
Assume Co’s US Sales Will Pick Up Gradually
Current Price Reflects Premature Hope On US Sales Growth, In Our View
Higher Sales From New Launches An Upside Risk

Jefferies On CONCOR
Buy Call, Target Rs 1,195/Sh
Q1 EBITDA Was 7% Below Estimates, With Weak Volume Growth & Lower EXIM Margins
Management Retained 18-20% YoY FY25 Volume Growth Guidance Driven By Road To Rail Shift
Market Share Rose In EXIM By 50 bps YoY
Have Lowered FYY25-27 EPS By 4% To Factor Q1
Medium-term Outlook Remains Robust As Rail Share Should Rise With Dedicated Freight Corridor

Jefferies On JB Chem
Buy Call, Target Raised To Rs 2,230/Sh
Q1 EBITDA Beat Our Estimates By 7%
Domestic Business Including Acquired Ophthal Portfolio Grew 22% YoY (13% Organic Growth)
Domestic Business Was Better Than Expected
Mgmt Expects Domestic Business To Grow High-teens In FY25
CDMO Growth To Accelerate From H2FY25
An Improved EBITDA Margin Towards The Upper End Of 26-28%

HSBC On Biocon
Downgrade To Reduce, Target Rs 300/Sh
Q1 Were Subdued After Adjusting For One-offs
Inflection Point For Biosimilars Sales Remains Distant Amid Multiple Challenges In Our View
Higher Sales From Biosimilars An Upside Risk