Stock to Buy: The Nifty saw a decline of 573 points last week and has moved below its 21-day moving average. The range of 23,200 to 23,300 is a strong support level for Nifty. If this breaks, the index could touch 22,900. Amid market weakness, brokerage firm ICICI Direct has recommended investing in fundamentally strong stocks and has identified four stock picks, including one PSU stock.
Just Dial Share Target: ₹1,360
Brokerage firm ICICI Direct has recommended buying shares of Just Dial, with a target price of ₹1,360 per share. The current price of the stock is ₹1,034.60, offering a potential return of more than 31% over the next 6-12 months. Just Dial leads the local search engine segment in India, and with the expected long-term growth from its B2B platform JDMart, there is optimism for strong revenue growth. ICICI Direct has issued a BUY recommendation for Just Dial (JDL) with a target price of ₹1,360 per share. The stock is currently trading at ₹1,034.60, offering a potential upside of over 31% within the next 6 to 12 months.
Brokerage Highlights
- Market Leadership: Just Dial is a leader in the local search engine segment in India.
- Revenue Model: The company earns revenue through subscriptions and fee-based packages offered to advisors.
- Reliance Retail Stake: Reliance Retail Ventures Limited (RRVL) holds a 63.84% stake in Just Dial, further strengthening its position in the market.
- JDMart Platform: The B2B platform JDMart is expected to drive long-term revenue growth for the company.
Q3 Results: Strong Performance
- Operating Revenue:
- Q3 FY25: ₹287.3 crore (+8.4% YoY, +0.9% QoQ).
- Q3 FY24: ₹265 crore.
- Net Profit:
- Q3 FY25: ₹131.3 crore, up from ₹92 crore YoY.
- Operating Profit (EBITDA):
- Q3 FY25: ₹86.6 crore, compared to ₹60.4 crore YoY.
- EBITDA Margin:
- Improved to 30.1%, a YoY increase of 7.35%.
Growth Drivers
- Subscription Growth: A steady rise in subscription packages and an expanding advisor base contribute to revenue stability.
- B2B Expansion: JDMart has positioned itself as a key growth driver, leveraging the increasing demand for B2B services in India.
- Operational Efficiency: Improved EBITDA margins highlight better cost management and efficiency.
Outlook
Just Dial’s consistent performance, coupled with the backing of Reliance Retail and the expansion of JDMart, presents strong growth potential. With improving financial metrics and market leadership, the stock offers an attractive investment opportunity.
IREDA Share Target: ₹250
ICICI Direct has assigned a BUY rating to the PSU stock IREDA (Indian Renewable Energy Development Agency), with a target price of ₹250 per share. The stock is currently trading at ₹201.20, offering a potential upside of over 24%. The company’s market capitalization stands at ₹54,077.83 crore.
- AUM Growth: IREDA’s assets under management (AUM) grew by 36.7% YoY, reaching ₹68,960 crore.
- Net Interest Income (NII): The NII witnessed a 38.9% YoY growth, with a margin of 3.33%.
- Sector Growth: Strong growth in solar, hydro, and manufacturing AUM has been observed, contributing significantly to the company’s performance.
- Operational Boost: Translation gains positively impacted operational performance.
- Risks: Monitoring growth in wind energy and rising non-performing assets (NPAs) remains critical.
- Long-term Opportunities: The brokerage anticipates that AUM growth will enhance the company’s valuation.
IREDA Q3 Results (FY 2024-25)
The company reported robust performance in Q3:
- Net Profit: Increased by 27% YoY to ₹425.37 crore.
- Operational Income: Rose by 35.57% YoY to ₹1,698.99 crore, compared to ₹1,253.20 crore in the same quarter of the previous year.
Growth Prospects
The company’s strong performance in renewable energy financing, particularly in solar and hydro projects, positions it well for future growth. The increasing focus on renewable energy in India further strengthens IREDA’s long-term outlook.
Jindal Steel & Power Share Target: ₹1,220
Brokerage has given a BUY rating for Jindal Steel & Power (JSPL), with a target price of ₹1,200 per share. The stock is currently priced at ₹917.40, offering a potential return of 31%. With India’s increasing steel demand and possible relief from higher import duties, JSPL’s profitability could improve.
About Jindal Steel & Power (JSPL)
JSPL is one of India’s leading steel producers. The company has a crude steel production capacity of 9.6 MTPA. Its major plants are located in Angul (6 MTPA) and Raigarh (3.6 MTPA). The company’s operations include:
- Iron ore mining (10.6 MTPA)
- Pellet plants (15 MTPA)
- Finished steel capacity (13.25 MTPA)
Approximately 55% of the company’s sales come from the construction and infrastructure sectors. JSPL’s products include TMT bars, plates, structural steel, and rails.
Market Outlook
The brokerage believes that there is significant potential for growth in the steel sector in India due to the increasing domestic demand. India is the second-largest consumer of finished steel, with per capita consumption currently at 93 kg, while the global average is 219 kg. By FY2031, the government aims to increase the crude steel production capacity to 300 million tons and raise per capita consumption to 160 kg.
Impact of Higher Import Duty
JSPL could benefit from the higher import duties on steel imports. Due to the increase in imports, domestic steel prices have fallen to a four-year low. The Steel Ministry has proposed a 25% safeguard duty on certain steel imports to protect the domestic industry. If this higher import duty is implemented, it could boost JSPL’s profitability and potentially lead to a re-rating of the stock.
Latent View Analytics Share Target: ₹610
Latent View Analytics Share Target: ₹610
ICICI Direct has given a BUY rating for IT company Latent View Analytics, recommending investment for 12 to 18 months. The target price has been set at ₹610 per share, while the current price is ₹456.45. This indicates a potential upside of 33% from the current level.
About Latent View Analytics
Latent View Analytics is a leading pure-play data analytics services company in India. The company specializes in the data analytics value chain, including consulting, business analytics, predictive analytics, data engineering, and digital solutions. It provides services to industries like technology, BFSI, CPG, retail, and industrial sectors. Its client portfolio includes over 30 Fortune 500 companies, such as Adobe, Uber, and 7-Eleven.
Market Opportunity
According to the brokerage:
- Expertise in Data and Analytics (D&A) creates significant growth opportunities.
- Latent View is among the best in digital solutions, big data, and advanced analytics.
- The global market for data, analytics, and AI services is expected to reach $165 billion by 2026.
- Global data analytics outsourcing is projected to grow at a CAGR of 32.1% by 2030, supporting enterprise strategies and growth opportunities.
Future Prospects
Latent View has recently acquired Decision Point, which is expected to:
- Expand its global client base by adding five major clients.
- Grow its CPG practice by 200%. The company has set ambitious revenue targets:
- $100-105 million by FY2025.
- $200-220 million by FY2027-28.
Performance Highlights
Since listing, Latent View has achieved 54.3% revenue growth, driven by strong organic growth. The brokerage has initiated coverage with a positive outlook, supported by its offerings in data and analytics, and the Decision Point acquisition.
Disclaimer: These stock recommendations come from brokerage firms and are not the opinions of this website. It’s important to consult with a financial advisor before making investment decisions.