Bajaj Housing Finance, Adani Energy among 6 stocks with up to 43% upside potential

Global financial services firm Citi has initiated coverage on Varun Beverages with a 'Buy' rating and a target price of Rs 800, indicating a potential upside of 38% from the previous closing price of Rs 579 per share.

Citi cited the company's strong market position in India and significant growth opportunities in the soft drinks sector as key reasons for its positive outlook. The brokerage highlighted Varun Beverages' go-to-market (GTM) initiatives and its ability to create new product categories as essential drivers of its expansion. The international brokerage estimates that revenue and earnings per share (EPS) will grow at compound annual growth rates (CAGR) of 23% and 29%, respectively, over the period from CY23 to CY26.

Brokerage firm Investec initiated coverage on Aadhar Housing Finance with a 'Buy' rating and target price of Rs 600, which indicates an upside potential of 38% from the previous closing price of Rs 436 apiece.

Investec noted that Aadhar is the largest and most diversified housing finance company in India. The company's dual underwriting model enhances its operational efficiency and risk management capabilities, allowing it to cater to a broader customer base effectively. The firm anticipates that the company’s Assets Under Management (AUM) and Profit After Tax (PAT) will grow at impressive rates of 21% and 20%, respectively, over the FY24-27 period.

Brokerage firm Ambit initiated coverage on Anup Engineering with a 'Buy' rating and target price of Rs 3,800, which indicates an upside potential of 43% from the previous closing price of Rs 2,660 apiece.

"Increasing order flow and integration of Mabel acquisition would drive 27%/29% revenue/EBITDA CAGR over FY24-27E. Order book at Rs 8,500 crore (1.5x FY24 revenue) provides near-term growth visibility. All players are gung-ho on demand prospects with orderbook levels for most at all-time highs. Anup stands out vs peers with superior margins and RoCE given operational efficiencies," Ambit said.

Brokerage firm Equirus Securities initiated coverage on Aditya Vision with a 'Long' rating and target price of Rs 603, which indicates an upside potential of 25% from the previous closing price of Rs 483 apiece.

"We forecast a 25% revenue CAGR over FY24-FY27E with EBITDA margins remaining around current levels. AVL is currently trading at 56x/42x FY25E/FY26E P/E – higher than peers such as EMIL. However, considering superior growth, better margins, and stronger return ratios, we expect its premium valuations to sustain," the brokerage firm said.

Global brokerage firm HSBC has initiated coverage on the recently listed Bajaj Housing Finance with a ‘Reduce’ rating and a target price of Rs 110, implying a downside potential of 27%.

“Apart from an earnings slowdown, we see two other threats to BAJAJHFL's current valuations. First, as per the Gordon Growth model, its current valuation implies a 10% long-term growth and 17% ROE (vs HSBCe of 14.6%). Second, large NBFC (non-banking financial companies) peers with higher ROE, stable growth outlook and at a steep valuation discount are better alternatives,” said HSBC in its report.

Domestic brokerage firm ICICI Securities initiated coverage on India’s largest private transmission company Adani Energy Solutions (AESL) with a buy rating and a target price of Rs 1,318. The target price signals an upside room for 37% growth in the stock.

With India set to bid Rs 1.6 lakh crore worth of new transmission assets, ICICI Securities believes that Adani Energy could be a promising investment to capitalize on this growth opportunity.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)