Ventura Securities

Top picks for the year 2024

SUBSCRIBE

1|Page (31st Dec 2023) For any further query, please email us on [email protected]
 Kfin Technologies Ltd

BUY @ CMP INR 483 Target: INR 704 in 24 months Upside Potential: 45.7%

A one-stop solution for Asset Managers, Issuers & Investors

Industry Fin Service

KFINT is a tech-driven financial intermediary providing end-to-end
support to domestic and global asset managers. Its services include
receipt of application form, successful onboarding of new client, unit Issue Details
allotment, trade confirmation. KFINT services 25 out of 46 AMCs in India Face Value (INR) 10.0
and serviced INR 14,825 bn of domestic AAUM (as on Sep 30, 2023) Mkt Cap (INR cr) 8,211
representing 31.5% of industry AAUM. In the AIF space, KFINT serviced 434 Price (INR) 483
funds (as on Sep 30, 2023) representing 37.2% of total registered AIFs. Shares O/S (cr) 17.0
KFINT specializes in offering Data as a Service (DaaS) and Platform as a 3M Avg Vol (mn) 1.2
Service (PaaS), utilizing technology to develop platforms designed to 51 Wk H/L (INR) 562/271
minimize manual handling. This enhances the precision of transaction Dividend yield (%) 0.00
processing and cuts costs by reducing the need for human resources.
With similar services, KFINT is expanding its presence in the international Shareholding (%) Sep 2023
market. Over the past 3 years, the company has expanded its business in Promoters 49.1
Malaysia, Philippines, Singapore, Hong Kong, Thailand, and Canada. In the Institution 31.3
next phase of growth, the company is targeting to expand its business in Public 19.6
the bigger and developed markets of the US and Europe. Total 100.0
Moreover, KFINT’s issuer solution business aids companies in acquiring
capital from both primary and secondary markets. Holding a dominant
market share (NSE500 47.3%, mainboard IPO size 57.0% and mainboard Price Chart
IPO clients 26.3% in FY23), KFINT is poised to gain from the increasing KFINT SENSEX
security issuance activities in both primary and secondary markets.
600 80,000
Over FY23-26E, KFINT’s revenue/ EBITDA/ net earnings are expected to 550
70,000
grow at a CAGR of 15.8%/ 18.4%/ 20.5% to INR 1,118 cr/ INR 490 cr/ INR 343 500
60,000
450
cr respectively, while EBITDA and net margins are expected to improve by
400 50,000
288bps to 43.9% and 346bps to 30.6% respectively. As a result, RoIC is 350
40,000
expected to improve by 2007bps to 56.0%, however, RoE is expected to 300
30,000
250
decline by 291bps to 19.6%. The firm is directing its cash flow towards
200 20,000
Feb-23
Jan-23

Apr-23
May-23
Mar-23

Jun-23

Oct-23
Sep-23
Dec-22

Aug-23

Nov-23
Jul-23

business growth instead of dividend payouts, leading to a rapid increase

in its net worth and affecting its RoE.
At the CMP of INR 481 and FY26 target EPS INR 20.1, the stock is trading at
FY26 P/E of 23.9X. We recommend BUY with a price target of INR 704 (35X
FY26 P/E), representing an upside of 45.7% in the next 24 months.
Key Consolidated Financial Data (INR Cr, unless specified)
Adj Adj
Net Net EBITDA Net RoE RoIC P/E P/BV EV/EBITDA
EBITDA EPS BPS
Revenue Profit (%) (%) (%) (%) (X) (X) (X)
(₹) (₹)
FY22 639.5 287.2 148.5 44.9 23.2 8.7 37.8 23.1 39.8 55.4 12.8 28.6
FY23 720.0 295.0 195.7 41.0 27.2 11.5 51.1 22.5 35.9 42.0 9.4 27.3
FY24E 830.3 355.6 234.6 42.8 28.2 13.8 65.0 21.2 43.5 35.1 7.4 22.0
FY25E 996.0 437.8 300.7 44.0 30.2 17.7 82.6 21.4 51.4 27.3 5.8 17.3
FY26E 1,117.7 490.1 342.5 43.9 30.6 20.1 102.7 19.6 56.0 24.0 4.7 14.8

2|Page (31st Dec 2023) For any further query, please email us on [email protected]
 Lloyds Metals & Energy Ltd

BUY @ CMP INR 600 Target: INR 1,040 in 24 months Upside Potential: 73.3%

Forged in strength built with metal

Approvals to enhance production of Surjagarh (Gadchiroli) iron ore Industry Metals

production to 10 MMTPA from 3 MMTPA and 30-year lease extension till
2057 provides Lloyds Metals & Energy Ltd (LMEL), uninterrupted access to Issue Details
iron ore for both captive consumption and external sales. In addition, the
Face Value (INR) 1.0
INR 6,500-7,000 cr capex (over FY23-27) entirely from internal accruals
Mkt Cap (INR cr) 30,300
to expand the sponge iron (DRI) facility in Ghugus, establish a new DRI
Price (INR) 600
facility, pellet plant in Konsari, and developing new hot metal and wire rod
Shares O/S (cr) 50.5
facilities is both prospectively value & margin accretive. Despite the large
3M Avg Vol (000) 2.2
capex LMEL will remain debt-free, while throwing up substantial
operating cash from its forward integration and enhanced iron ore 51 Wk H/L (INR) 688/236
production. Along with internal accruals, the State government’s Dividend yield (%) 0.13
Industrial Promotion Subsidy (IPS) of 110-150% capex subsidy (in the form
of state GST reversals) over 12 years will be adequate to fund the next Shareholding (%) Sep 2023
round of the ambitious ~INR 15,000 cr capex over FY27-31. Promoters 65.8
Institution 0.2
Over FY23-26E, we are expecting LMEL’s iron ore production volumes to
Public 34.0
grow at a CAGR of 65.4% to 162.5 lakh tons, while its DRI volumes are
Total 100.0
expected to increase at a CAGR of 47.9% to 6.6 lakh tons. Increase in iron
ore extraction, expansion of DRI facilities and commencement of new
facilities of pellet, hot metal and wire rod are expected to enhance
financial performance in FY26. As a result, the company’s revenue/ Price Chart
EBITDA/ adjusted net profit (adjusted for exceptional non cash item of INR LMEL, LHS Sensex, RHS
1,194 cr reported in Q1FY23 towards the OFCD issuance) are expected to
450 70,000
grow at a CAGR of 45.3%/ 81.0%/ 62.8% to INR 10,396 cr/ INR 4,804 cr/ INR 400
60,000
3,905 cr, respectively, by FY26E, while EBITDA and adj net margins are 350
50,000
expected to improve by 2233bps to 46.2% and 1087bps to 37.6%, 300
250 40,000
respectively. As a result, return ratios – RoE & RoIC – are expected to
200 30,000
improve by 1389bps to 47.1% and 1195bps to 76.1%, respectively, by FY26E. 150
20,000
100
At the CMP of INR 600 and FY26 target EPS INR 77.4, the stock is trading 10,000
50
at FY26 P/E of 7.8X. We recommend BUY with a DCF based price target of 0 0
Jun-20 Jun-21 Jun-22 Jun-23
INR 1040 (13.4X FY26 P/E), representing an upside potential of 73.3% in the
next 24 months.

Key Consolidated Financial Data (INR Cr, unless specified)

Adj Adj
Net Net EBITDA Net RoE RoIC P/E P/BV EV/EBITDA
EBITDA EPS BPS
Revenue Profit (%) (%) (%) (%) (X) (X) (X)
(₹) (₹)
FY22 697.5 145.5 97.3 20.9 14.0 1.9 9.5 20.2 23.0 311.3 62.9 208.6

FY23 3,392.3 810.3 (288.6) 23.9 (8.5) (5.7) 30.3 (18.9) 64.1 (105.0) 19.8 37.0
FY24E 5,211.2 2,214.7 1,763.5 42.5 33.8 34.9 58.9 59.3 89.8 17.2 10.2 13.4

FY25E 6,663.8 3,119.5 2,569.6 46.8 38.6 50.9 100.7 50.6 65.6 11.8 6.0 9.5

FY26E 10,395.8 4,804.2 3,905.3 46.2 37.6 77.4 164.1 47.1 76.1 7.8 3.7 5.8

3|Page (31st Dec 2023) For any further query, please email us on [email protected]
 Adani Power Ltd

BUY @ CMP INR 523 Target: INR 707 in 24 months Upside Potential: 35%

Empowering Progress

Adani Power Limited (APL), is the largest private thermal power producer Industry Power
in India. The company distributes electricity generated from its projects
through a strategic blend of long-term & short-term Power Purchase Issue Details
Agreements (PPAs), and merchant transactions. The company currently
Face Value (INR) 10.0
has an installed capacity of 15.2 GW with an additional 1.6 GW under
Mkt Cap (INR cr) 2,01,718
construction, which accounts for 7.1% of India’s total thermal power
Price (INR) 523
generation capacity of 214 GW. The company’s installed capacity has
Shares O/S (cr) 386
grown at a 5% CAGR from 12.4 GW in FY21 to 13.6GW at end of FY23 and it
3M Avg Vol (mn) 13.6
is expected to reach more than 16.8 GW by FY27.
51 Wk H/L (INR) 589/132
With the growth in generation capacities being focused on renewable Dividend yield (%) 0.00
energy (RE), the increasing deficit in peak demand and supply indicates
required additions to base load capacity which is catered by conventional Shareholding (%) Sep 2023
fossil energy sources. APL, as the largest private pure play thermal power Promoters 70.0
company, has well aligned capacity expansion plans to fill up the void. Institution 18.3
Public 11.7
Over FY23-26, we expect APL’s revenue/EBITDA to grow at 7%/12% CAGR
Total 100.0
to INR 47,000 cr / INR 14,080 cr, while the EBITDA margins are expected
to improve by 400bps. Improvement in domestic coal availability and
expected rise in PLF could improve operating profitability. However, PAT
is expected to decline at a CAGR of 5% to INR 9,229 cr and PAT margins are Price Chart
expected to decline by 810bps due to the full utilization of carry-forward Adani Power Sensex
losses in FY24/25. The company aspires to increase the total generation
600 80000
capacity by 6 GW to reach 21 GW of total capacity by 2030. With the 70000
500
increase in power demand, peak deficit reaching 4% in September and 60000
400
50000
Govt.’s efforts to ramp up the thermal capacity, APL as the largest private
300 40000
thermal power player is placed well to harness the opportunity. 30000
200
20000
100
We initiate coverage on Adani Power Ltd. (APL) at the CMP of Rs. 523 per 10000

0 0
share (16.7x FY26 EV/EBITDA) with a price target of Rs. 707 per share (22x
Mar/22

Mar/23
Mar/21
Jun/21

Jun/22

Jun/23
Dec/20

Sep/21
Dec/21

Sep/22
Dec/22

Sep/23

EV/EBITDA), representing an upside of 35% in the next 24 months. Risk to

our thesis: (1) Change in regulatory policies. (2) Fluctuations in raw
material supply and prices.

Key Consolidated Financial Data (INR Cr, unless specified)

Adj Adj
Net Net EBITDA Net RoE RoIC P/E P/BV EV/EBITDA
EBITDA EPS BPS
Revenue Profit (%) (%) (%) (%) (X) (X) (X)
(₹) (₹)
FY22 27,711 9,814 4,912 35.4 17.7 12.7 48.5 26.3 10.3 41.1 10.8 25.3

FY23 38,773 10,045 10,727 25.9 27.7 27.8 77.5 35.9 9.7 18.8 6.8 24.0
FY24E 48,042 14,400 19,009 30.0 39.6 49.3 97.2 50.7 19.0 10.6 5.4 15.6

FY25E 47,442 14,320 12,299 30.2 25.9 31.9 109.9 29.0 15.1 16.4 4.8 16.2

FY26E 47,017 14,080 9,229 29.9 19.6 23.9 119.5 20.0 12.6 21.9 4.4 16.7

4|Page (31st Dec 2023) For any further query, please email us on [email protected]
 Eris Lifesciences Ltd

BUY @ CMP INR 910 Target: INR 1,366 in 24 months Upside Potential: 50.1%

Harnessing growth through strategic acquisitions

Following robust organic growth in its initial year of FY23 post- Industry Pharma
acquisition, Oaknet Healthcare has propelled Eris Lifesciences Ltd (ERIS)
to a strong position within the dermatology sector. Through recent Issue Details
acquisitions in 2023, including 27 marquee brands from Dr. Reddy's (9
Face Value (INR) 1.0
brands), Glenmark Pharma (9 brands), and the ongoing Biocon deal (9
Mkt Cap (INR cr) 12,376
brands), ERIS has solidified its standing in the dermatology space.
Price (INR) 910
The diabetic care segment, constituting the largest revenue share at 29%, Shares O/S (cr) 13.6
is expected to showcase robust financial growth, supported by the strong 3M Avg Vol (mn) 2.2
financial performance of established brands (Glimisave, Cyblex, and 51 Wk H/L (INR) 971/551
Tendia), as well as the promising financial prospects of new-age products Dividend yield (%) 0.79
(Vildagliptin, Sitagliptin, and Dapagliflozin). Similarly, the cardiac care
segment of the company, making up 21% of the revenue, is projected to Shareholding (%) Sep 2023
uphold industry growth. This expectation is rooted in the presence of five
Promoters 54.9
flagship brands ranking among the Top-15, coupled with the impressive
Institution 27.7
individual performance of Eritel, LNBloc, Olmin, Crevast, and Atorsave. In
Public 17.4
addition, ERIS has expanded its portfolio by acquiring 12 brands from
Total 100.0
Biocon in the nephrology segment. This strategic move ensures that ERIS
is well-equipped to provide comprehensive patient care.

Over FY23-26, we are expecting the company revenue and EBITDA to grow Price Chart
at a CAGR of 15.7% to INR 2608 cr and 19.2% to INR 908 cr respectively and
ERIS Sensex
EBITDA margin is expected to improve by 297bps to 34.8%. Strong
performance of established brands and promising prospects of new 1,000 75,000

products are expected to enhance operating profitability. However, net 900 70,000
65,000
profit is expected to grow at a CAGR of 11.5% (lower than revenue CAGR) 800
60,000
and net margins are expected to decline by 234bps to 20.3% due to the 700
55,000
decline in tax benefits in the forthcoming years. 600
50,000
500 45,000
The recent capex of INR 170 cr on manufacturing facility in Ahmedabad 400 40,000
Apr-21

Apr-22

Apr-23
Dec-20

Dec-21

Dec-22

Dec-23
Aug-21

Aug-22

Aug-23

(Gujarat) effectively doubles the existing capacity, a development poised

to fuel growth well into FY27. We initiate coverage with a BUY at the CMP
of INR 910 (23.3X FY26 P/E) with a price target of INR 1,366 (35.0X FY26
P/E), representing an upside of 50.1% in the next 24 months.

Key Consolidated Financial Data (INR Cr, unless specified)

Net Net EBITDA Net Adj EPS Adj BPS RoE RoCE P/E EV/EBITDA
EBITDA
Revenue Profit (%) (%) (₹) (₹) (%) (%) (X) (X)
FY22 1,347.0 485.0 406.1 36.0 30.1 29.9 140.3 21.3 19.7 30.5 25.3

FY23 1,685.1 536.9 382.2 31.9 22.7 28.1 163.3 17.4 12.8 32.4 24.4
FY24E 1,963.2 674.1 347.7 34.3 17.7 25.6 173.5 14.9 12.2 35.6 19.4

FY25E 2,267.5 783.2 421.8 34.5 18.6 31.0 185.9 16.8 13.9 29.3 16.5

FY26E 2,607.6 908.2 530.4 34.8 20.3 39.0 201.5 19.5 16.9 23.3 13.9

5|Page (31st Dec 2023) For any further query, please email us on [email protected]
 Zomato Ltd

BUY @ CMP INR 124 Target: INR 156 in 24 months Upside Potential: 25.8%

Heading towards a profitable and faster delivery

We are long-term constructive on the fortunes of Zomato Ltd (ZOMATO). Industry Food Delivery
The industry structure is likely to remain a duopoly of Zomato and Swiggy
with limited disruptions from the likes of Amazon and weaker offering Issue Details
propositions from direct ordering companies like DotPe Thrive and Face Value (INR) 1.0
ONDC, etc due to limited networks in Indian cities. Coupled with the
Mkt Cap (INR cr) 1,07,754
moats of network effects, branding, last-mile delivery, customer user
Price (INR) 124
behaviour (convenience and addiction) and wide geographical reach, we
Shares O/S (cr) 857.9
believe that the duopoly is likely to dominate in the visible future.
3M Avg Vol (mn) 81.7
Zomato's strategic acquisition of Blinkit has proven to be a judicious one,
51 Wk H/L (INR) 132/44
delivering revenue results, and we anticipate it will also positively impact
EBITDA. Dividend yield (%) 0.00

India’s online food delivery market (pre-pandemic) stood at USD 4.2 bn, Shareholding (%) Sep 2023
with an estimated 45-55 mn online food delivery users representing ~9% Promoters 0.0
of the total 700 mn internet subscribers. This user data, when compared Institution 69.6
with the US (90-120 mn food delivery users, 36% of the internet Public 30.4
subscribers) and China (430-470 mn food delivery users, 50% of the Total 100.0
internet subscribers) represents a huge latent opportunity. Triggers for
this rapid growth are rapid urbanization with increasing nuclear families
and a busy lifestyle with both husband & wife being part of the working Price Chart
population.
Zomato SENSEX

Over the period FY23-26, we expect ZOMATO’s revenue to grow at a CAGR 180 80,000
160 70,000
of 41.9% to INR 20,215.5 cr by FY26, driven by 31.7% CAGR growth in food
140 60,000
delivery revenue to INR 10,632 cr, Hyperpure CAGR of 62.4% to INR 6445.9 120
50,000
100
cr, dine-out & subscription CAGR of 13.3% to INR 340 cr and Blinkit’s 40,000
80
revenue to grow at CAGR of 51.4% to INR 2,797cr. 30,000
60
40 20,000
20 10,000
We recommend BUY at the current price of INR 124 with a target price of 0 0
Oct-21

Apr-22

Apr-23
Jan-22

Oct-22
Jan-23

Oct-23
Jul-21

Jul-22

Jul-23

INR 156 per share, representing an upside potential of 25.8%.

Key Consolidated Financial Data (INR Cr, unless specified)

Adj
Net Net EBITDA Net Adj BPS RoE RoIC P/E EV/Sales
EBITDA EPS
Revenue Profit (%) (%) (₹) (%) (%) (X) (X)
(₹)
FY22 4,192.4 (1,870.2) (1,220.8) (44.6) (29.2) (1.4) 19.2 (7.3) (15.2) (67.4) 18.7
FY23 7,079.5 (1,046.8) (851.5) (14.8) (12.0) (1.0) 22.7 (4.4) (10.6) (95.6) 10.7

FY24E 10,849.9 65.9 43.7 0.6 0.4 0.1 22.7 0.2 (3.1) 1,864.2 7.1

FY25E 15,443.0 797.3 743.5 5.2 4.8 0.9 23.5 3.7 2.0 109.5 4.9

FY26E 20,215.5 1,590.2 1,557.7 7.9 7.7 1.8 25.2 7.2 7.4 52.3 3.7

6|Page (31st Dec 2023) For any further query, please email us on [email protected]
 State Bank of India Ltd

BUY @ CMP INR 642 Target: INR 943 in 24 months Upside Potential: 46.9%

Breaking the ‘Sarkari bank’ stereotype

SBI did remarkably well to post its highest-ever half-yearly profit of INR Industry Bank
35,742 cr for H1FY24. The cherry on the cake was this growth was
accompanied by substantial amelioration of its asset quality with Issue Details
GNPA/NNPA being brought at 2.55%/0.64%. Going ahead, we expect SBI Face Value (INR) 1.0
to grow its loan book at a CAGR of 13.1% to INR 46,24,944 cr by FY26 driven Mkt Cap (INR cr) 5,73,005
by faster growth of the SME (14.5% CAGR to INR 5.4 lakh cr) and retail (14%
Price (INR) 642
CAGR to INR 17.5 lakh cr) loan book.
Shares O/S (cr) 892.5
3M Avg Vol (mn) 3.7
Given the fierce competition, we expect slower deposit growth of 9.5%
51 Wk H/L (INR) 660/499
CAGR to INR 57.2 lakh cr given the fact that the bank has got an adequate
Dividend yield (%) 1.94
cushion of excess SLR investments (INR 4 lakh cr) to fall back on. As a
result, NIMs are expected to expand marginally to 3.3% (+30bps), thereby
driving faster growth of PPoP (15.1% CAGR to INR 1.3 lakh cr). Shareholding (%) Sep 2023
Promoters 57.5
As a result, we expect Net Earnings to grow at a CAGR of 16.2% to INR Institution 35.1
78,727.2 cr by FY26. Consequently, RoAA is expected to improve to 1.1% Public 7.4
(+14bps) while RoAE is expected to decline marginally by 68 bps to 15.9%. Total 100.0
We believe that the faster growth of net earnings should help sustain Tier-
1 capital and so, no equity capital raise is envisaged over the forecasted
period. Price Chart

SBIN Nifty
SBI is our preferred pick amongst the large banks having the highest
earnings growth and available at significantly low valuations. We initiate 700 22,000

coverage with a BUY for a SOTP based target of INR 943 (1.7x FY26 600 20,000

Price/Adj. BV) representing an upside of 61.2% from the CMP of INR 589 500 18,000

over the period of 24 months. Risk to our estimates: (1) Slower than 400 16,000

expected economic growth, (2) Steep rise in interest cost & (3) 300 14,000

Deterioration in asset quality. 200 12,000

100 10,000
Feb-21

Feb-22

Feb-23
May-21

May-22

May-23
Nov-20

Nov-21

Nov-22

Nov-23
Aug-23
Aug-21

Aug-22

We recommend a BUY rating with a FY26 price target of INR 943 per share,
representing an upside potential of 46.9% over the next 24 months.

Key Consolidated Financial Data (INR Cr, unless specified)

NIM EPS BVPS RoAA RoAE P/E P/Ad

AUM NII PPOP Net Profit
(%) (INR) (INR) (%) (%) (X) BV (X)
FY22 27,33,966.6 1,20,707.6 67,874.0 31,676.0 2.8 35.5 313.8 0.7 11.9 18.1 2.0

FY23 31,99,269.3 1,44,840.5 83,713.0 50,232.5 3.0 56.3 367.1 1.0 16.5 11.4 1.7
FY24E 36,48,494.9 1,67,498.7 98,700.1 60,682.1 3.1 68.0 435.1 1.0 17.0 9.4 1.5

FY25E 41,23,590.6 1,89,991.7 1,12,065.4 68,967.6 3.2 77.3 512.4 1.1 16.3 8.3 1.3

FY26E 46,24,944.3 2,17,863.7 1,27,528.0 78,727.2 3.3 88.2 600.6 1.1 15.9 7.3 1.1

7|Page (31st Dec 2023) For any further query, please email us on [email protected]
 IRCTC Ltd

BUY @ CMP INR 888 Target: INR 1,176 in 24 months Upside Potential: 32.4%

Explosive growth ahead

IRCTC has a pure monopoly business in 2 out of its 4 operating segments, Industry Railway
namely Internet Ticketing and Rail Neer. The Internet Ticketing segment
earns a service charge regardless of the booking platform / agency while Issue Details
Rail Neer operating leverage is expected to play out as its manufacturing
Face Value (INR) 2.0
capacity increases coupled with margin expansion. The Catering
Mkt Cap (INR cr) 71,000
Segment, which contributed about 42% of the total revenues, is expected
Price (INR) 888
to witness a steady volume growth as passengers have become more
Shares O/S (cr) 80.0
quality and hygiene consciousness. Train Side Vending, eCatering, Food
3M Avg Vol (mn) 3.9
Plazas, Fast Food Units and Jan Ahaars are expected to increase in number
contributing to higher volume growth. 51 Wk H/L (INR) 916/557
Dividend yield (%) 0.62
The tourism segment is expected to perform well on the back initiatives
taken by government in terms of Bharat Gaurav policy under the banner
Shareholding (%) Sep 2023
“Ek Bharat Shreshta Bharat”. In addition, the launch of Vande Bharat trains
Promoters 62.4
and increase in railway connectivity with far flung areas of North East and
Institution 16.6
Jammu & Kashmir is expected to enhance tourism and passenger traffic.
Public 21.0
Favourable government policies and a rise in tourism activities are
Total 100.0
expected to benefit IRCTC in the long run. Moreover, IRCTC is expanding
its businesses in the non-railway segments. The company has recently
entered catering services for various ministries, government
departments, autonomous bodies including judiciary and universities. It Price Chart
has already set up its hospitality outlets in 9 such organizations.
IRCTC SENSEX

Over FY23-26E, we are expecting the company’s revenue/EBITDA/PAT is 1,400 80,000

expected to grow at a CAGR of 16.2%/ 16.7%/ 28.8% to INR 5,561 cr/ INR 1,200 70,000

1,000 60,000
2,030 cr/ INR 1,568 cr respectively, while EBITDA and PAT margins are 50,000
800
expected to improve by 47bps to 36.5% and 747bps to 28.2% respectively. 40,000
600
30,000
Benefits of operating leverage in railway business and entry into newer 400 20,000
segments are expected to enhance profitability in the coming years. As a 200 10,000

result, return ratios – RoE and RoIC are expected to improve by 514bps to 0 0
Apr-21

Apr-22

Apr-23
Dec-20

Dec-21

Dec-22

Dec-23
Aug-21

Aug-22

Aug-23

34.7% and 554bps to 37.4% respectively.

We recommend a BUY at the CMP of INR 888 per share (47.38X FY26P/E)
with a price target of INR 1176 per share (60X FY26 P/E), representing an
upside potential of 32.4% in the next 24 months.
Key Consolidated Financial Data (INR Cr, unless specified)

Net Net EBITDA Net Adj EPS Adj BPS RoE RoCE P/E P/BV
EBITDA
Revenue Profit (%) (%) (₹) (₹) (%) (%) (X) (X)
FY22 1,879.0 8,74.0 660.0 46.5 35.1 8.3 25.3 32.6 34.9 107.6 35.1

FY23 3,541.5 1,276.2 733.9 36.0 20.7 9.2 31.0 29.6 31.9 96.8 28.6
FY24E 4,178.0 1,510.2 1,172.4 36.1 28.1 14.7 38.3 38.2 40.5 60.6 23.2

FY25E 4,741.9 1,724.0 1,329.3 36.4 28.0 16.6 46.6 35.6 37.9 53.4 19.0

FY26E 5,561.3 2,030.0 1,568.0 36.5 28.2 19.6 56.4 34.7 37.0 45.3 15.7

8|Page (31st Dec 2023) For any further query, please email us on [email protected]
 Aurionpro Solutions Ltd

BUY @ CMP INR 2,177 Target: INR 2,887 in 24 months Upside Potential: 32.6%

Charting growth trajectories in FinTech and beyond

Aurionpro Solutions Ltd (ASL), a distinguished software product company Industry IT/ITES
renowned for its financial software, has strategically positioned itself
with a dual focus on banking and financial software, as well as the Issue Details
technology innovation group (TIG). In the second quarter of FY23, the
Face Value (INR) 2.0
company maintained a robust consolidated order book of approximately
Mkt Cap (INR cr) 71,000
INR 810 crores, providing favorable medium-term revenue visibility.
Price (INR) 888
Anchored by proficient management, with many of them having over two
Shares O/S (cr) 80.0
decades of expertise, the company exhibits a seasoned leadership that
3M Avg Vol (mn) 3.9
has played a pivotal role in its success.
51 Wk H/L (INR) 916/557
ASL's strategic global expansion, particularly into the US market, presents Dividend yield (%) 0.62
a compelling investment opportunity. With substantial investments in
sales channels and personnel, the company aims to penetrate large banks, Shareholding (%) Sep 2023
anticipating advanced discussions and deal sizes 50% to 100% larger than Promoters 62.4
those in Asia. The banking segment, representing 52% of revenues, is set Institution 16.6
for rapid expansion, with a strategic push to increase its contribution to
Public 21.0
60%. The TIG business, with margins in the range of 15-16%, and the
Total 100.0
banking and fintech segment, boasting higher margins exceeding 25%,
collectively contribute to the company's financial strength. The strategic
acquisitions and partnerships, including those with market leaders like
Finastra and Mastercard, underscore the significant growth potential, Price Chart
market expansion, and enhanced service offerings, making ASL an ASL SENSEX
attractive investment for long- term value creation.
2,500 80,000
70,000
Over FY23-26, we are expecting the company’s revenue/EBITDA/PAT to 2,000
60,000
grow at a CAGR of 31.7%/31.8%/33.4% to INR 1,506 cr/ INR 328 cr/ INR 243 1,500 50,000
40,000
cr respectively, while EBITDA and PAT margins are expected to improve by 1,000 30,000
1bps to 21.8% and 60bps to 16.1% respectively. As a result, return ratios – 20,000
500
RoE and RoIC are expected to improve by 380bps to 23.4% and 420bps to 10,000
0 0
Apr-21

Apr-22

Apr-23

22.8% respectively by FY26E.

Dec-20

Dec-21

Dec-22

Dec-23
Aug-21

Aug-22

Aug-23

We initiate coverage with a BUY for a DCF based price objective of INR
2887, representing an upside of 32.6% over the next 24 months. Risk to our
thesis: (1) Change in senior management and (2) Economic slowdown

Key Consolidated Financial Data (INR Cr, unless specified)

Net Net EBITDA Net Adj EPS Adj BPS RoE RoCE P/E EV/EBITDA
EBITDA
Revenue Profit (%) (%) (₹) (₹) (%) (%) (X) (X)
FY22 505.0 110.8 75.6 21.9 15.0 28.5 162.6 17.8 17.0 76.3 43.9

FY23 659.3 143.4 102.3 21.8 15.5 39.2 207.5 19.6 18.6 55.5 34.1
FY24E 874.9 191.9 138.1 21.9 15.8 53.0 257.4 21.2 20.7 41.0 25.4

FY25E 1,152.1 251.0 183.9 21.8 16.0 70.6 322.3 22.4 21.8 30.8 19.4

FY26E 1,505.7 328.1 242.8 21.8 16.1 93.2 406.3 23.4 22.8 23.3 14.8

9|Page (31st Dec 2023) For any further query, please email us on [email protected]
 Sadhana Nitro Chem Ltd

BUY @ CMP INR 87 Target: INR 148 in 24 months Upside Potential: 70.1%

Becoming self sufficient!

Sadhana Nitro has secured a pivotal position under the Centre's Industry Chemicals
Production- Linked Incentive (PLI) scheme, obtaining the authorization to
commence the production of 36,000 tonnes of para-aminophenol (PAP). Issue Details
This significant development marks a transformative chapter in the
Face Value (INR) 1.0
company's narrative, heralding a promising trajectory for its future
Mkt Cap (INR cr) 2,134
growth. The company has achieved a noteworthy milestone by becoming
Price (INR) 87
the 2nd global entity to venture into the production of para-aminophenol
Shares O/S (cr) 24.7
(PAP) using nitrobenzene, ensuring a product is free from impurities. PAP
3M Avg Vol (mn) 11.9
holds a pivotal role as a key ingredient in the synthesis of paracetamol, and
currently, the only other company engaged in the production of this 51 Wk H/L (INR) 121/68
crucial drug intermediate is the multinational Mallinckrodt Dividend yield (%) 0.16
Pharmaceuticals.
Shareholding (%) Sep 2023
The company expects to go from producing 3000 TPA currently to 36000 Promoters 71.1
TPA by FY26 of PAP. 300-350 crores of capex infusion in underway to Institution 0.0
achieve this milestone. Further expansion into paracetamol with a Public 28.9
capacity of 12000-18000 TPA are in the works. Incremental capacities of Total 100.0
other products are expected in line with forward integrated products
.SNCL has many long term contracts at the conclusion stage which will
help in maximizing capacity utilization. Price Chart

Over FY23-26E, we are expecting revenue/ EBITDA/ PAT to grow at a CAGR SNCL Sensex

of 73.7%/101.6%/203.1% to INR 751 cr/ INR 174 cr/ INR 89 cr, while EBITDA 130 72000
120
and PAT margins are expected to improve by 830bps to 23.1% and 970bps 110 67000
100
to 11.9% respectively by FY26E. As a result, return ratios – RoE and RoIC are 90
62000
80
expected to improve by 2030bps to 21.7% and 2210bps to 26.1% 70
60 57000
respectively by FY26. 50
40 52000
Jan-23

Aug-23

Oct-23
Dec-22

May-23

Sep-23

Nov-23
Jun-23
Jul-23
Feb-23
Mar-23
Apr-23

Taking the above things into consideration, we have initiated coverage

with a BUY price objective of INR 148 representing an upside of 70.1% over
the next 24 months.

Key Consolidated Financial Data (INR Cr, unless specified)

Net Net EBITDA Net Adj EPS Adj BPS RoE RoCE P/E EV/EBITDA
EBITDA
Revenue Profit (%) (%) (₹) (₹) (%) (%) (X) (X)
FY22 131.7 14.6 6.2 11.1 4.7 0.3 8.2 3.9 3.4 274.7 124.9
FY23 143.3 21.2 3.2 14.8 2.2 0.2 11.6 1.4 4.0 555.9 87.3
FY24E 216.5 42.6 10.8 19.7 5.0 0.4 14.8 3.7 5.9 202.1 44.3
FY25E 411.6 86.5 32.1 21.0 7.8 1.3 16.4 10.0 12.8 68.3 21.5
FY26E 750.7 173.6 89.1 23.1 11.9 3.6 21.0 21.7 26.1 24.6 10.7

10 | P a g e ( 3 1 s t D e c 2 0 2 3 ) For any further query, please email us on [email protected]

 Intellect Design Arena Ltd

BUY @ CMP INR 837 Target: INR 1,039 in 24 months Upside Potential: 23.9%

One stop global financial solution

Intellect Design Arena Ltd (IDAL) works globally in the fields of Financial Industry IT/ITES
Technology for Banking, Insurance and other Financial Services. IDAL is
structured with two banking verticals - iGCB and iGTB - catering to Issue Details
specific banking needs, and recently, the iRTM unit merged with iGCB.
Face Value (INR) 5.0
Their product offerings include IDC, Digital Lending, Quantum, and
Mkt Cap (INR cr) 11,436
Capital Cube, while their platforms consist of eMACH.ai, iKredit360, and
Price (INR) 837
Digital Experience Platform, with technology like iTurmeric. The company
Shares O/S (cr) 13.7
operates in three different models:
3M Avg Vol (mn) 30.4
• Traditional product-based model – The company licenses the 51 Wk H/L (INR) 844/388
product to the customer for on-premise use, earning revenue from Dividend yield (%) 0.31
licenses, maintenance, implementation, and customization.
• Customer-Centric Partnership Model - The company collaborates Shareholding (%) Sep 2023
with customers as strategic technology partners, providing Promoters 30.4
implementation and support for their business transformation Institution 28.2
agenda, and earning revenue from services and intellectual Public 41.4
property licenses. Total 100.0
• Cloud deployment/ Subscription based Revenues - The company
offers products and platforms on the cloud deployment model,
earning revenue through licensing, cloud setup, hosting, and Price Chart
subscription fees linked to customers' business metrics.
Intellect Sensex
Over FY23-26E, Intellect’s revenue/ EBITDA/ net earnings are expected to
1100 90000
grow at a CAGR of 11.6%/ 15.3%/ 16.7% to INR 3,460 cr/ INR 775 cr / INR 495 950 75000
cr respectively. EBITDA margins are expected to improve by 270bps to 800 60000
22.7% due to higher margins from the new products and an increase in 650 45000
recurring revenue. Net margins are expected to improve by 230bps to 500 30000
14.3% due to better utilization of investments made and improving 350 15000

EBITDA. Return ratios – RoE and RoIC – are expected to improve by 340bps 200 0
Jun/23
Oct/21

Aug/22

Jan/23
May/21

Nov/23
Mar/22
Dec/20

to 16.4% and 760bps to 24.0% respectively by FY26E.

We initiate coverage with a BUY at the CMP of INR 837 per share (32.7X
FY24 P/E) with a price target of INR 1,039 per share (28.6X FY26 P/E),
representing an upside potential of 23.9% in the next 24 months.

Key Consolidated Financial Data (INR Cr, unless specified)

Net Net EBITDA Net Adj EPS Adj BPS RoE RoCE P/E P/BV
EBITDA
Revenue Profit (%) (%) (₹) (₹) (%) (%) (X) (X)
FY22 1,878.2 475.0 348.0 25.3 18.5 25.6 133.5 19.3 26.9 32.7 6.3
FY23 2,231.3 438.5 267.0 19.7 12.0 19.6 151.5 13.0 16.4 42.8 5.5

FY24E 2,565.9 496.4 320.1 19.3 12.5 23.5 170.3 13.8 18.7 35.7 4.9

FY25E 2,970.1 615.9 392.4 20.7 13.2 28.8 193.3 14.9 20.8 29.1 4.3

FY26E 3,460.1 774.9 495.4 22.4 14.3 36.3 222.4 16.4 24.0 23.0 3.7

11 | P a g e ( 3 1 s t D e c 2 0 2 3 ) For any further query, please email us on [email protected]

 Hindustan Zinc Ltd

BUY @ CMP INR 318 Target: INR 386 in 24 months Upside Potential: 21.4%

Capacity expansion and cost optimization to play key role

Hindustan Zinc Ltd (HZL) is India's largest zinc-lead miner (~75% market Industry Metals
share), second-largest zinc-lead smelter, and sixth-largest silver
producer. Exports account for 25% of HZL's total revenue. HZL has shown Issue Details
exceptional operational performance in FY23, surpassing projections, and
Face Value (INR) 2.0
reaching 1 mn tonnes of refined metal production. The company
Mkt Cap (INR cr) 1,34,386
prioritized mine development and had a total reserve and resource base of
Price (INR) 318
460 mn tonnes, demonstrating robust resource sustainability. Despite
Shares O/S (cr) 423
volatile commodity market and global challenges, HZL maintained strong
3M Avg Vol (mn) 54.5
profit margins through agile decision-making and proactive measures.
51 Wk H/L (INR) 383/290
Company has guided mined metal production to be between 1,075-1,100 Dividend yield (%) 23.7
thousand MT, refined metal production to be between 1,050-1,075
thousand MT, and saleable silver production to be between 725-750 MT. Shareholding (%) Sep 2023
Zinc production costs are estimated to be between $1,125-1,175 per MT, Promoters 64.9
and anticipated project capital expenditures are $175-200 mn. The Institution 3.7
company’s Fumer plant was commissioned in Q2FY24 at Chanderiya and Public 29.5
the same is expected to be ramped up from Q4FY24. Upon reaching full Total 100.0
operational capacity, the plant is projected to contribute an additional 30
tonnes of silver and 7,000 tonnes of saleable metal. Simultaneously, the
company is also improving energy efficiency by adding renewable energy, Price Chart
which is expected to reduce coal dependency by 50% in the next 2 years.
HZL SENSEX

Capacity expansion along with cost optimization is expected to improve 400 80,000
380
financial performance. Over FY23-26E, we are expecting the company’s 360 70,000

revenue/ EBITDA/ PAT to grow at a CAGR of 9.0%/ 10.2%/ 10.6% to INR 340 60,000
320
44,191 cr/ INR 23,450 cr/ INR 14,211 cr, while EBITDA and PAT margins are 300 50,000
expected to improve by 173bps to 53.1% and 133bps to 32.2% respectively. 280
260 40,000
240 30,000
220
At the CMP of INR 318 and FY26 target EPS INR 33.6, the stock is trading at 200 20,000
Mar-21

Mar-22

Mar-23
Jun-21

Jun-22

Jun-23
Dec-20

Dec-21

Dec-22

Dec-23
Sep-21

Sep-22

Sep-23

FY26 P/E of 9.5X. We recommend BUY with a price target of INR 386 (12.0X
FY26 P/E), representing an upside potential of 21.4% in the next 24 months.

Key Consolidated Financial Data (INR Cr, unless specified)

Net Net EBITDA Net Adj EPS Adj BPS RoE RoCE P/E EV/EBITDA
EBITDA
Revenue Profit (%) (%) (₹) (₹) (%) (%) (X) (X)
FY22 29,440.0 16,225.0 9,629.0 55.1 32.7 22.8 81.1 28.1 30.4 14.0 8.4
FY23 34,098.0 17,506.0 10,511.0 51.3 30.8 24.9 30.6 81.3 83.6 12.8 8.3
FY24E 30,688.2 15,755.4 8,408.8 51.3 27.4 19.9 40.6 49.1 51.4 16.0 9.3
FY25E 36,825.8 19,221.6 10,931.4 52.2 29.7 25.9 53.5 48.4 50.7 12.3 7.6
FY26E 44,191.0 23,450.3 14,210.9 53.1 32.2 33.6 70.3 47.8 50.1 9.5 6.2

12 | P a g e ( 3 1 s t D e c 2 0 2 3 ) For any further query, please email us on [email protected]

 Disclosures and Disclaimer

Ventura Securities Limited (VSL) is a SEBI registered intermediary offering broking, depository and portfolio management services to clients. VSL is member of BSE, NSE
and MCX-SX. VSL is a depository participant of NSDL. VSL states that no disciplinary action whatsoever has been taken by SEBI against it in last five years except
administrative warning issued in connection with technical and venial lapses observed while inspection of books of accounts and records. Ventura Commodities Limited,
Ventura Guaranty Limited, Ventura Insurance Brokers Limited and Ventura Allied Services Private Limited are associates of VSL. Research Analyst (RA) involved in the
preparation of this research report and VSL disclose that neither RA nor VSL nor its associates (i) have any financial interest in the company which is the subject matter
of this research report (ii) holds ownership of one percent or more in the securities of subject company (iii) have any material conflict of interest at the time of
publication of this research report (iv) have received any compensation from the subject company in the past twelve months (v) have managed or co-managed public
offering of securities for the subject company in past twelve months (vi) have received any compensation for investment banking merchant banking or brokerage
services from the subject company in the past twelve months (vii) have received any compensation for product or services from the subject company in the past twelve
months (viii) have received any compensation or other benefits from the subject company or third party in connection with the research report. RA involved in the
preparation of this research report discloses that he / she has not served as an officer, director or employee of the subject company. RA involved in the preparation of
this research report and VSL discloses that they have not been engaged in the market making activity for the subject company. Our sales people, dealers, traders and
other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed
herein. We may have earlier issued or may issue in future reports on the companies covered herein with recommendations/ information inconsistent or different those
made in this report. In reviewing this document, you should be aware that any or all of the foregoing, among other things, may give rise to or potential conflicts of
interest. We may rely on information barriers, such as "Chinese Walls" to control the flow of information contained in one or more areas within us, or other areas, units,
groups or affiliates of VSL. This report is for information purposes only and this document/material should not be construed as an offer to sell or the solicitation of an
offer to buy, purchase or subscribe to any securities, and neither this document nor anything contained herein shall form the basis of or be relied upon in connection
with any contract or commitment whatsoever. This document does not solicit any action based on the material contained herein. It is for the general information of the
clients / prospective clients of VSL. VSL will not treat recipients as clients by virtue of their receiving this report. It does not constitute a personal recommendation or
take into account the particular investment objectives, financial situations, or needs of clients / prospective clients. Similarly, this document does not have regard to
the specific investment objectives, financial situation/circumstances and the particular needs of any specific person who may receive this document. The securities
discussed in this report may not be suitable for all investors. The appropriateness of a particular investment or strategy will depend on an investor's individual
circumstances and objectives. Persons who may receive this document should consider and independently evaluate whether it is suitable for his/ her/their particular
circumstances and, if necessary, seek professional/financial advice. And such person shall be responsible for conducting his/her/their own investigation and analysis of
the information contained or referred to in this document and of evaluating the merits and risks involved in the securities forming the subject matter of this document.
The projections and forecasts described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties
and contingencies. Projections and forecasts are necessarily speculative in nature, and it can be expected that one or more of the estimates on which the projections
and forecasts were based will not materialize or will vary significantly from actual results, and such variances will likely increase over time. All projections and forecasts
described in this report have been prepared solely by the authors of this report independently of the Company. These projections and forecasts were not prepared with
a view toward compliance with published guidelines or generally accepted accounting principles. No independent accountants have expressed an opinion or any other
form of assurance on these projections or forecasts. You should not regard the inclusion of the projections and forecasts described herein as a representation or
warranty by VSL, its associates, the authors of this report or any other person that these projections or forecasts or their underlying assumptions will be achieved. For
these reasons, you should only consider the projections and forecasts described in this report after carefully evaluating all of the information in this report, including
the assumptions underlying such projections and forecasts. The price and value of the investments referred to in this document/material and the income from them
may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future performance. Future returns are not
guaranteed and a loss of original capital may occur. Actual results may differ materially from those set forth in projections. Forward-looking statements are not
predictions and may be subject to change without notice. We do not provide tax advice to our clients, and all investors are strongly advised to consult regarding any
potential investment. VSL, the RA involved in the preparation of this research report and its associates accept no liabilities for any loss or damage of any kind arising out
of the use of this report. This report/document has been prepared by VSL, based upon information available to the public and sources, believed to be reliable. No
representation or warranty, express or implied is made that it is accurate or complete. VSL has reviewed the report and, in so far as it includes current or historical
information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed. The opinions expressed in this document/material are subject
to change without notice and have no obligation to tell you when opinions or information in this report change. This report or recommendations or information
contained herein do/does not constitute or purport to constitute investment advice in publicly accessible media and should not be reproduced, transmitted or published
by the recipient. The report is for the use and consumption of the recipient only. This publication may not be distributed to the public used by the public media without
the express written consent of VSL. This report or any portion hereof may not be printed, sold or distributed without the written consent of VSL. This document does
not constitute an offer or invitation to subscribe for or purchase or deal in any securities and neither this document nor anything contained herein shall form the basis
of any contract or commitment whatsoever. This document is strictly confidential and is being furnished to you solely for your information, may not be distributed to
the press or other media and may not be reproduced or redistributed to any other person. The opinions and projections expressed herein are entirely those of the
author and are given as part of the normal research activity of VSL and are given as of this date and are subject to change without notice. Any opinion estimate or
projection herein constitutes a view as of the date of this report and there can be no assurance that future results or events will be consistent with any such opinions,
estimate or projection. This document has not been prepared by or in conjunction with or on behalf of or at the instigation of, or by arrangement with the company or
any of its directors or any other person. Information in this document must not be relied upon as having been authorized or approved by the company or its directors
or any other person. Any opinions and projections contained herein are entirely those of the authors. None of the company or its directors or any other person accepts
any liability whatsoever for any loss arising from any use of this document or its contents or otherwise arising in connection therewith. The information contained herein
is not intended for publication or distribution or circulation in any manner whatsoever and any unauthorized reading, dissemination, distribution or copying of this
communication is prohibited unless otherwise expressly authorized. Please ensure that you have read “Risk Disclosure Document for Capital Market and Derivatives
Segments” as prescribed by Securities and Exchange Board of India before investing in Securities Market.

Ventura Securities Limited - SEBI Registration No.: INH000001634

Corporate Office: I-Think Techno Campus, 8th Floor, ‘B’ Wing, Off Pokhran Road No 2, Eastern Express Highway, Thane (W) – 400608

13 | P a g e ( 3 1 s t D e c 2 0 2 3 ) For any further query, please email us on [email protected]