Diwali Picks 2024
Samvat 2081
Happy Diwali
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Bonanza Diwali Picks 2024 (Samvat 2081)
CMP Target Price Upside
Stock name
(Rs.) (Rs.) (%)
Triveni Turbine Ltd. 773 1,057 37
Hindalco Industries Ltd 735 923 26
Power Mech Projects Ltd. 3,233 3,990 23
India Glycols Ltd. 1,385 1,700 23
Newgen Software Technologies
1,244 1,504 21
Ltd.
Triveni Turbine Ltd.
Investment Rationale
In Q1FY25, order inflows increased by 41% YoY, contributing to a 23% YoY growth in the order book.
CMP: Upside An improvement in export contribution (66% mix) and a strong growth in export orders (74% YoY)
773 provide visibility for both revenue and profitability for FY25. Order book growth in Q1FY25 was 23%
Target: 37 YoY to Rs. 1,726cr (1x Trailing Twelve Months Revenue), driven by a 74% YoY increase in export order
45%
% intake. The general election (2% YoY) had an influence on domestic orders throughout the quarter.
1,057 Compared to 53% in Q1FY24, the proportion of export order books rose to 66% in Q1FY25, which will
help the margin and profitability in FY25–FY26.
CMP as on 17th Oct. 2024 With the growing demand from sectors like steel, cement and renewable energy, TTL has expanded
Stock Info its turbine capacity upto 120MW.
Sector Capital Goods
The management has added 120 mw turbines to its offering as a result of an increase in visibility in
Market Cap 24,560 foreign orders. We anticipate that by making this change, the business will be able to meet the rising
(Rs Crs) demand from industries including renewable energy, steel, and cement. A decrease in input prices
52 Week 844/312 caused the gross margin to increase by 38bps YoY to 48.2% in Q1FY25, while the EBITDA margin
High/Low increased by 180bps YoY to 20.6%. We anticipate increased execution in the upcoming years given the
prospects in the global market.
FINANCIAL SUMMARY
Y/E March Sales (Rs. Cr) PAT (Rs. Cr) EPS (Rs.) P/E EBITDAM. (%) RoE (%)
FY24 1,654 269.3 8.5 90.9 19.27 31.3
FY25E 2,197 386.1 11.5 67.2 20.50 34.3
FY26E 2,759 495.6 14.5 53.3 21.50 35.8
Hindalco Industries Ltd
Investment Rationale
Hindalco is pursuing multiple growth avenues, including commissioning downstream aluminum
CMP: Upside capacity in India by FY26 and the Bay Minette facility at Novelis by FY27.
735 The company reported robust performance driven by cost control in the aluminum division and
Target: 26 record EBITDA in the copper division, which rose 52% YoY due to higher copper prices.
45%
% All ongoing expansion projects, including the Aditya FRP project expected to be commissioned by
923
FY26, are progressing as planned.
Domestic aluminum demand in Q1FY25 is projected to reach 1,319 Kt (15% YoY growth), with strong
performance in electrical and packaging sectors, although the automotive sector remains weak. The
CMP as on 17th Oct. 2024
copper division aims for sustainable quarterly EBITDA of Rs.6.0 billion, supported by robust domestic
Stock Info demand and a strategic focus on value-added products.
Sector Metal Hindalco has maintained its capex guidance for FY25 at Rs.55-60 billion, targeting upstream
expansions and enhancing downstream margins through value-added product offerings.
Market Cap 1,65,125
Novelis is expanding its aluminum rolling capacity in North America, aiming for operational
(Rs Crs)
readiness by H2CY26, which is expected to enhance overall profitability.
52 Week 773/449
The coal sourcing mix remains stable, with ongoing efforts to enhance self-sufficiency through new
High/Low
captive coal mines expected to commence operations between FY26-FY28
Valuation – Stock is currently trading at 11.2x/10.4x FY25E/FY26E EPS, respectively. We are valuing
FINANCIAL SUMMARY Hindalco at 13x FY26E EPS of Rs.70.7 to arrive at a BUY rating with target price of Rs.923, an upside
of 27%.
Y/E March Sales (Rs. Cr) PAT (Rs. Cr) EPS (Rs.) P/E EBITDAM. (%) RoE (%)
FY24 2,15,962 10,155 45.7 16.1 11.1 10.9
FY25E 2,53,248 14,659 65.8 11.2 12.1 13.8
FY26E 2,64,620 15,734 70.7 10.4 12.1 13.3
Power Mech Projects Ltd.
Investment Rationale
Strong Order Book and Diversified Revenue Streams: Power Mech Projects Ltd. (PMPL) boasts a
CMP: Upside robust order book of Rs.57,793 crore, ensuring strong revenue visibility over coming years. The company
3,233 is actively exploring growth opportunities in non power sectors such as railways, steel, and optical fiber
Target: 23 cable projects under BharatNet, further diversifying its business portfolio.
45%
%
3,990 Margin Expansion through O&M and MDO Business: PMPL plans to expand its Operations and
Management (O&M) business, which generates EBITDA margins of around 18%, while international
operations margins approximately 20%. With Mining Development and Operation’s (MDO) operations
CMP as on 17th Oct. 2024 expected to ramp up in FY26-27, the overall margin profile is likely to improve significantly, thus
enhancing profitability over the coming years.
Stock Info Thermal Power Sector Revival: PMPL, with established clients like NTPC and BHEL, is strategically
Sector Engineering positioned to benefit from the revival in the thermal power sector. BHEL’s recent order intake for 13,840
Market Cap 10,222
MW capacity, coupled with NTPC’s plans to add 22,000 MW, presents significant growth opportunities.
(Rs Crs) International Expansion: PMPL is experiencing strong traction and exploring new territories, having bid
52 Week 3,725/1,683 for projects in Jordan and added new clients in Qatar and Saudi Arabia. With a significant pipeline, the
High/Low overseas O&M business is anticipated to grow substantially over the next 2-3 years.
Valuation: The stock is trading at a slightly overvalued PE of 40.6x compared to the industry PE of 35.9x.
FINANCIAL SUMMARY However, the company's strong order book, entry into the O&M and MDO businesses, growth prospects
in the thermal power segment, and international expansion offer significant opportunities.
Y/E March Sales (Rs. Cr) PAT (Rs. Cr) EPS (Rs.) P/E EBITDAM. (%) RoE (%)
FY24 4,206 248 157.2 20. 6 11.7 15.9
FY25E 5,047 300 189.9 17.0 11.5 14.6
FY26E 6,309 382 242.1 13.4 11.3 15.2
India Glycols Ltd.
Investment Rationale
Healthy Market position – India Glycols is the largest manufacturer of bio-based glycols in India and
CMP: Upside globally. It holds a dominant position in the country liquor segment in UP and Uttarakhand. It is also
1,385 a global leader in Thiocolchicoside API sales, a highly potent a highly potent muscle relaxant.
Target: 23 Diversified revenue segments – IGL primarily operates in four segments: Bio-based Specialities and
45%
% Performance Chemicals Segment (BSPC) comprises glycols, specialty chemicals, natural gum, and
1,700
other related goods. PS segment comprises manufacturing and selling ethyl alcohol (Potable).
Ennature Biopharma (EB) comprises manufacturing and selling nutraceutical products. The company
CMP as on 17th Oct. 2024
also started biofuel business in the recent past, which is scaling up significantly. Overall, the BSPC
segment contributed 49% (60%) of its revenue in FY24 (FY23), biofuels contributed 16% (5%), while PS
Stock Info and EB contributed 29% (28%) and 6% (7%) of its revenue.
Sector Commodity Targeting huge opportunity from Bio-MEG – The global MEG market is around 32mn MT and
Chemicals growing at a 6% CAGR. In India, strong domestic PET demand and increased textile and apparel
Market Cap 4,286 exports will keep the MEG market stable. India's MEG demand is growing at a CAGR of 7-8%, higher
(Rs. Crs) than the global average. IGL aims to capitalize on the increased adoption of Bio-MEG as a green
52 Week 1,549 / 621 alternative, expected to remain stable in the future.
High/Low Valuation – Stock is currently trading at 22.7x/19.7x FY25E/FY26E EPS, respectively. We are valuing
FINANCIAL SUMMARY India Glycols at 24.2x FY26E EPS of Rs.70.26 to arrive at a BUY rating with target price of Rs.1,700.00,
an upside of 23%.
Y/E March Sales (Rs. Cr) PAT (Rs. Cr) EPS (Rs.) P/E EBITDAM. (%) RoE (%)
FY24 3,294 173 55.87 24. 8 14% 8.6%
FY25E 3,788 189 61.10 22.7 14% 8.6%
FY26E 4,356 218 70.26 19.7 14% 9.1%
Newgen Software Technologies Ltd.
Investment Rationale
Newgen focus on AI and automation solutions to innovate augments significant value to its offerings. It
CMP: Upside has introduced NewgenONE, an integrated platform combining ECM, BPM, and CCM, which enhances
customer realization. It has also launched Marvin, a GenAI-powered low-code platform and Lumyn, an
1,244 AI-driven chatbot solution for banks. These innovations improve decision-making, customer interaction
Target: 21
45% and operational efficiency to the organization, making Newgen’s solutions more attractive to enterprises
%
1,504 looking to embrace automation and AI.
With a diversified client base of over 500 active customers across 76 countries, Newgen has established a
strong global presence. Its solutions cater to various industries, from banking and insurance to
CMP as on 17th Oct. 2024 government and healthcare, thus reducing dependence on any single sector. Additionally, recurring
revenue streams from AMC and SaaS provide long-term stability.
Stock Info Newgen is targeting mid-tier financial institutions preferably in the US to expand its client base by
Sector IT - Software adding 25-30 accounts in the next three years. Partnerships with Global System Integrators (GSIs) further
bolster its market presence and ability to close larger deals in Fortune 1000 companies. The US market is
Market Cap 17,457
contributing ~21% of revenue and have significant growth potential for Newgen.
(RsCrs)
Newgen’s management aims to achieve US$500mn in revenue over the next 4-5 years, implying a growth
52 Week 1,548/459 rate of over 25% CAGR. We believe, Newgen is well-positioned to benefit from increased digital
High/Low
transformation investments, with a favorable risk-reward profile.
Valuation – Stock is currently trading at 53.2x/ 44.7x FY25E/FY26E EPS, respectively. We are valuing
FINANCIAL SUMMARY Newgen at 54.0x FY26E EPS of Rs.27.80 to arrive at a BUY rating with target price of Rs.1,504.00, an
upside of 18%.
Y/E March Sales (Rs. Cr) PAT (Rs. Cr) EPS (Rs.) P/E EBITDAM. (%) RoE (%)
FY24 1,244 252 18.0 69.1 23.2 21.3
FY25E 1,617 327 23.4 53.2 24.1 25.5
FY26E 1,973 389 27.8 44.7 24.7 27.9
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