1. J Kumar Infra projects:
Axis Direct maintains a ‘Buy’ rating on this construction and engineering company with a target price of Rs 845, indicating a potential upside of 9%. The company’s revenue grew 25.4% YoY to Rs 1,433.7 crore in Q4FY24, and its net profit rose 34.9% YoY to Rs 99.7 crore.
Analyst Uttam K Srimal highlights the company’s order book of Rs 25,711 crore, which is 5X its FY24 revenue. He believes that its order inflow of Rs 11,810 crore will ensure revenue visibility for three to four years across diverse sectors and geographies.
The analyst emphasizes the company’s bidding pipeline of Rs 20,000 crore, which targets metros, elevated corridors, road tunnels, and buildings. Srimal is upbeat about the company’s aim to diversify its project profile by bidding for irrigation projects as well. He says, “J Kumar Infra projects remains one of the most established EPC contractors and will continue to benefit from its healthy order book position, strong execution capabilities, and healthy financial position.” He expects a revenue CAGR of 16.9% in FY25-26, buoyed by order inflows and expanded operational efficiencies in infrastructure projects.
2. NTPC:
ICICI Direct maintains a ‘Buy’ call on this electric utilities company with a target price of Rs 455, indicating an upside of 16.1%. The company’s net profit rose by 26.9% YoY to Rs 6,168.7 crore in Q4FY24, while its revenue increased 9.1% YoY.
Analyst Chirag Shah expects the company’s growth momentum to sustain as he says, “NTPC has been the only company that has added coal-based capacities over the past five years and reached an installed base of 73,000 MW.” He expects an 11% power generation growth, after the commissioning of the under-construction 9,300 MW of coal-based plants in FY26.
Shah is optimistic about NTPC’s aggressive approach to expanding its renewable energy portfolio, including green hydrogen. The company says that it is working to ensure that 45-50% of its capacity comes from non-fossil fuels by 2030. Shah believes that the company will also see growth in the conventional thermal portfolio. He estimates profit to grow at a 26% CAGR over FY25-26.
3. ITD Cementation India:
Edelweiss retains a ‘Buy’ call on this construction and engineering company with a target price of Rs 475. This indicates an upside of 12.7%. ITD’s net profit improved by 136.9% YoY to Rs 89.5 crore (12.5% higher than the brokerage’s estimate) in Q4FY24, while its revenue grew 39.1% YoY (10% higher than the brokerage’s estimate).
Analyst Mehul Mehta is optimistic about the company’s focus on the expansion of its bridges, marine and tunnel business overseas. It aims to balance its order inflow in the marine segment between overseas and domestic markets.
The analyst believes that the management’s focus on bidding for higher average ticket size orders across its projects should accelerate revenue growth and profitability for the company.
The company’s management says that the bid pipeline stood at Rs 28,000 crore at the beginning of FY25. According to Mehta, the current order book translates into revenue visibility of 2.6x of the FY24 revenue.
4. Ahluwalia Contracts (India):
IDBI Capital gives a ‘Buy’ call to this construction and engineering company with a target price of Rs 1,412, indicating an upside of 15.8%. In Q4FY24, the company’s profit increased 176.9% YoY to Rs 199.8 crore, while revenue grew 34.9% YoY. However, its EBITDA margin fell by 3.8 percentage points to 9%. Analysts Vishal Periwal and Shubham Shelar say, “The company’s EBITDA came in lower than our estimates as it was impacted by an increase in sub-contract expenses, due to a shortage of labour.”
Periwal and Shelar are upbeat about Ahluwalia Contracts’ order book, which currently stands at Rs 11,200 crore as it won orders worth Rs 5,500 crore in FY24. The management has guided to close FY25 with an order inflow of more than Rs 7,000 crore. The analysts expect revenue and profit to grow at a CAGR of 44.7% and 18.8%, respectively over FY25-26.
The company’s current order book is divided in a ratio of 65:35 between the government and private sectors. The analysts are optimistic about the company’s plan to further improve private orders and maintain the ratio at 50:50.
5. ITC:
KR Choksey maintains a ‘Buy’ rating on this food and tobacco products company with a target price of Rs 517, indicating a potential upside of 20.1%. In Q4FY24, the company’s revenue increased 10.3% YoY to Rs 20,130.3 crore, while its net profit fell 1.1% YoY to Rs 5,120.6 crore. Analyst Unnati Jadhav notes that the decline in net profit was due to higher tax expenses and depreciation costs. She says, “ITC reported an in-line performance in terms of overall earnings.”
Jadhav says that the growth was led by improved volumes from cigarettes and strong performance in its hotel business. However, she is cautious as the paperboard and agribusiness continued to slacken during the quarter.
Going forward, the analyst believes that the FMCG business will see stable growth due to the company’s focus on new and innovative launches and will see further improvement as consumption sees an uptick. She also expects the pipeline of upcoming properties in the hotel segment to drive growth. Jadhav sees ITC’s profit and revenue growing at a CAGR of 8.6% and 7.3%, respectively, over FY25-26.