Hot Stocks: Brokerage view on Emami, Godrej Consumer, Affle, Tech Mahindra, and others

Citi on Emami: Buy | Target price: Rs 900
Citi has maintained a buy rating on Emami and raised the target price to Rs 900 from Rs 650. According to Citi, the growth outlook is improving due to macroeconomic factors and internal initiatives. The acceleration in growth is leading to upgraded earnings, and concerns over promoter pledges are being largely resolved. Citi anticipates a broader sector re-rating.

Key Catalysts: Strong growth in the seasonal portfolio, recovery in macro-sensitive brands, and margin expansion in the organized channel.

Morgan Stanley on Godrej Consumer: Equal-weight| Target price: Rs 1,231
Morgan Stanley has maintained an equal-weight rating on Godrej Consumer with a target price of Rs 1,231. The company's Q1FY25 performance aligned with the brokerage firm’s estimates, with reported EBITDA showing double-digit growth. Organic volumes for GAUM are expected to decline in double digits, while Indonesia is projected to achieve high-single-digit volume growth and double-digit constant currency sales growth.

Citi on Affle: Buy | Target prices: Rs 1,600
Citi has initiated coverage on Affle with a buy rating and a target price of Rs 1,600.

Citi sees Affle positively leveraged to digital ad spending. While the US recovery is imminent, India's recovery is expected to follow. The brokerage forecasts a 20% top-line CAGR, with margins projected to expand by over 400 basis points from FY24 to FY27

Jefferies on Tech Mahindra: Underperform | Target price: Rs 1,065
Jefferies has maintained an underperform rating on Tech Mahindra with a target price of Rs 1,065. Tech Mahindra may face a reality check on achieving 15% margins by FY27, as Jefferies believes margins could reach only 13.6% by that time. This projection assumes that employee costs remain lower than revenue, pass-through costs are steady, and operational expenses are consistent. Given this outlook, the recent rise in the stock price appears more driven by hope than grounded in reality.

Citi on Persistent Systems: Sell | Target price: Rs 3,080
Citi has maintained a sell call on Persistent with a target price of Rs 3,080. Growth in Q1 will likely be strong, margins will likely decline sequentially. Management commentary suggests a potential further decline in Q2 margins due to wage hikes. Market concerns may arise regarding FY25 margin guidance. Additionally, deal Total Contract Value (TCV) is expected to remain within the range of the last few quarters. Despite a 24% increase, the stock has outperformed the IT index by 17% in the past month.

UBS on Dr Lal Path Labs: Buy | Target price: Rs 3,500
UBS has maintained a buy call on Dr. Lal Path Labs and hiked the target price to Rs 3,500 from Rs 2,900. The stock’s potential to invest back in growth is not priced in. Tier-3 markets are also showing strong performance with a scope to go deeper. Market concerns about low patient volume growth are likely to fade and UBS believes that growth trajectory will continue as traction for new labs and centers improves.

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