Prabhudas Lilladher in its report said “we estimate Nifty EPS at 855.2 and 963.4 and introduce FY25 EPS at 1069.2. This shows a growth of 12.1/12.7/11.0% for FY23/24/25. Our estimates are 3.5% and 5.6% and 8.3% lower than consensus EPS estimates. Nifty is currently trading at 19x one-year forward PE which is a 7.8% discount to a 10-year average of 20.5.”
In the base case, “we value Nifty at last 10-year average PE of 20.5x on September 2024 EPS of Rs 1,016, and arrive at September 23 Nifty target of 20936,” said the brokerage.
High conviction picks
Prabhudas Lilladher added
and in high conviction picks and removed L&T from the list.
“Bharti is a play on a strong recovery in the telecom sector led by consolidation, rising data usage, integration of Data and Ecom and expected increase in ARPU with 5G adoption in coming years. We believe a strong focus on premiumisation and customer-focused strategies will drive 21.8% CAGR EBIDTA growth over FY22-25,” the brokerage said.
Whereas Jubilant Ingrevia is well placed to capitalize on long-term growth opportunities given by the 60 new products pipeline, strong traction in CDMO, import substitution, China+1 policy and commensurate Capex outlay of Rs 20.5bn over FY22-25, said the brokerage.
“EBITDA contribution from higher value segments (SPCM + NHS) is expected to increase to 67% by FY25E from 53% in FY22, as SPCM/NHS EBITDA grows at 27%/11% CAGR, while commodity vertical reduces to 33%. Strong balance sheet (Net Debt/Equity at 0.1x) despite Rs 18 billion cash outflow on Capex over FY23-25E, and earnings mix improvement will drive rerating in the stock,” It added.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)