Paytm, Vodafone Idea, ITC Hotels, Sona BLW to Tata Consumer shares: Jefferies sees up to 41% upside | Target, rationale
Giving a ‘buy’ tag to Vodafone Idea shares, the Jefferies India report said, “Over FY26-29E, we estimate VIL offers a strong 11%/25% CAGR in revenues/cash EBITDA. Assuming 45-55% incremental cash EBITDA margins and 0-25% cumulative tariff hike between FY27-29, VIL's cash EBITDA could range between Rs147-Rs224bn implying 20-45% EBITDA CAGR. Taking a range of 18-22x EV/EBITDA multiple (currently trading at 21x), we estimate VIL's fair value ranges between Rs9-29/share, implying 143% upside potential and 25% downside potential - a favorable risk-reward, in our view. We lower our target multiple to 20x EV/EBITDA due to higher yields and reiterate BUY with lowered PT of Rs16/share.”
Giving a ‘buy’ tag to Paytm shares, the Jefferies India report said, “We rate Paytm Buy with a PT of Rs2,150 based on 33x Sept-28E EV/ EBITDA. Key risks include regulatory risk, as fintech regulations are still evolving in India; business risks arising from lending partner concentration in the ML segment; and potential asset-quality deterioration.”
Keeping its faith in the Sona BLW shares, the Jefferies India report said, “We raise FY27-29E EPS by 4-7%, factoring higher top line. We expect 22-24% revenue and EPS CAGR over FY26-29E. Sona aims to expand its revenues by 10x in 10 years. Stock has outperformed Nifty-50 by 63% CYTD, and is now trading at 51x 1-year forward PE, inline with the average since listing. While valuation is rich, we continue to like Sona for its strong engineering capabilities and expanding growth potential, especially with Denso partnership, and entry into robotics & physical AI value chain. We retain Buy with revised ₹950 PT (earlier ₹900) at 50x Sep-28E EPS.”
The Jefferies India report has predicted 30% upside in Tata Consumer shares, saying, “TCPL remains a key beneficiary of the rapid rise of Q/C, esp. for the growth portfolio (+40% YoY), which contributed c38% of the India business in 2Q, with this share set to reach c50% in 3Y. Overall, 2Q was ahead despite inflationary pressures in tea/salt, but product price hikes should help ahead. International saw a revenue decline but saw margin expansion. FY27 guidance of 50-70bps YoY EBITDA margin expansion stays. We slightly tweak estimates; BUY.”
The target price for Tata Consumer shares is ₹1,250, below the earlier target of ₹1,450.
The Jefferies India increased the price target of ITC Hotels from ₹210 to ₹220, saying, “Reflecting strong 2Q, we raise EBITDA estimates by ~3-5% across FY27-FY29. We value the stock at ₹220 ( ₹210 earlier), based on 21x Sep-28E (Hotel) EV/EBITDA. Retain Buy.”
Asit Manohar has nearly two decades of experience in the mainstream media. In this period, he has served esteemed media organisations like NDTV Profit, The Economic Times, and Zee Business. He has been working at LiveMint Digital since April 2021. During these two decades of journey in mainstream media, Asit has mainly covered external affairs, markets and personal finance. However, his earliest beats include railways, SME, MSME, and politics (Congress beat). Some of his features on political, economic, and foreign policy are documented in the parliamentary records. <br><br> While pursuing his MA (Mass Communication, Session 2004-06), Asit began his media career as a stringer at All India Radio in Varanasi. At AIR Varanasi, Asit worked with the Gyanvani, Yuvvani and Vividh Bharti teams. After working for nearly one year at AIR Varanasi, he shifted to print journalism and started working as a stringer for the HT Media Ltd, Varanasi. At HT Media Ltd in Varanasi, he covered the BHU beat. <br><br> Asit has also worked with some brokerage houses. He has worked with Religare Broking and India Infoline, where he assisted the research team in developing and executing trade strategies for intraday cash, F&O, and commodities. <br><br> Asit is a Gold Medalist in MA (Mass Communication) from BHU, Varanasi. He did his BSc. (Hons) in Mathematics from Magadh University, Bodh Gaya. Asit was a National Talent Scholarship holder during his senior secondary studies (1988-91).
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