Hot Stocks: Brokerages’ view on Bajaj Finance, Jubilant FoodWorks, ONGC and KNR Construction

Brokerage firm Morgan Stanley has an equal-weight rating on Jubilant FoodWorks while Elara Securities recommends an Accumulate rating on ONGC.

Also, Axis Securities retained its buy rating on KNR Construction and Bajaj Finance.

We have collated a list of recommendations from top brokerage firms from ETNow and other sources:

Morgan Stanley on Jubilant FoodWorks: Equal-Weight| Target Rs 493
Morgan Stanley maintained an Equal-Weight rating on Jubilant FoodWorks with a target price of Rs 493.

Cyclical sluggishness persists, though demand is sequentially better. Store expansion plans for 200-225 stores will continue.

Once consumption revives, the company expects 15% revenue growth for Domino’s led by mid-single-digit like-for-like growth and 10% from store base.

Elara Securities on ONGC: Accumulate| Target Rs 224
Elara Securities recommends an accumulate rating on ONGC with a target price of Rs 224.

Crude oil production declined 2% YoY to 5.2mn tonne and natural gas production fell by 3% YoY to 5.2bcm. Value-added product production increased 1% YoY and 10% QoQ to 655,000 tonnes.

The fall in oil and gas production was largely on account of the decline in matured fields. The company expects KG-98/2 fields’ production to commence by November 2023 and ramp up to peak production of 10mmscmd gas and 45,000bpd crude oil in FY25.

“We upgrade our rating to Accumulate from Reduce and raise our target price to Rs 224 from Rs 169, based on production growth visibility with the start of production at the KG-98 & 2 fields production and improvement in ONGC Videsh production once Russia operations stabilize as well as the potential for value unlocking from Venezuela and Mozambique blocks,” said the note.

Axis Securities on KNR Construction: Buy| Target Rs 305
Axis Securities maintained a buy rating on KNR Construction with a target price of Rs 305. The company’s order book remains robust at Rs 5,673 Cr (as of 30th Sep’23).

“The company expects a 20%-23% contribution from the irrigation projects in overall revenue and has better margins than road projects. Furthermore, it is also looking to bid for irrigation projects in Maharashtra, Odisha, MP, UP, and Rajasthan,” said the note.

Axis Securities on Bajaj Finance: Buy| Target Rs 9425

Axis Securities maintained a buy rating on Bajaj Finance with a target price of Rs 9425. The Reserve Bank of India (RBI) has directed Bajaj Finance Ltd. (BAF) to stop sanction and disbursal of loans under its two lending products – ‘eCOM’ and ‘Insta EMI Card’, with immediate effect.

In Q2FY24, the B2B loans disbursed from digital EMI Card formed ~4.1% of the total disbursements by the company (as % of loans booked, volume-wise).

If the restrictions continue for a longer time, we believe it would affect the customer acquisition momentum (the EMI Cards as % of Total new customer acquisition ranges between 18-21%) and also the contribution of these products to fee income.

“With headwinds on NIMs to be visible in H2FY24, any additional pressure from lower fee income would drag BAF’s RoAs. However, BAF has stated that the financial impact of the regulator’s action would not be material. We believe the stock to remain under pressure in the near term,” said the note.

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

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