Rakesh Jhunjhunwala: CLSA initiates coverage on this Rakesh Jhunjhunwala stock; TechM on Citi’s negative catalyst watch
On Star Health, CLSA said the company has 32 per cent market share in the retail segment and that retail premiums are three times larger than the next player’s numbers. The foreign brokerage expects a 23 per cent growth in premiums compounded annually over the next five years. Star, it said, has innovative products, wide distribution and hospital network.
The brokerage said it sees return on equity expansion and a 29 per cent growth in premiums compounded annually over the next two years. Rakesh and Rekha Jhunjhunwala owned 17.51 per cent stake in this company as of December 31.
JPMorgan said Tata Consumer is simplifying organisational structure and that the company is targeting 5-10 per cent profit after tax accretion. It believes that the expected changes will result in significant tax benefits. This brokerage has a target of Rs 760 on the stock.
On Tech Mahindra, Citi said there are potential downside risks to consensus estimates, as it opened a 90-day negative catalyst watch on the stock. That said, the brokerage noted that Tech Mahindra remained one of the few Buy-rated IT stocks. Its communication business is in a favourable cycle, aiding overall growth, Citi said.
Consistent large deals are providing earning visibility and that there is a scope for increasing medium term margins, it said. Valuations are also at 25 per cent discount to the industry average but its FY23 Ebit estimates are about 6 per cent below the current consensus estimates.
