Broking firm, Motilal Oswal has recommended buying the stock of Jubilant Foodworks, while HEM Securities has recommended buying the stock of CEAT Ltd for good gains.
Jubilant Foodworks: Buy the stock says Motilal Oswal
Broking firm, Motilal Oswal has a buy on the stock of Jubilant Foodworks for a price target of Rs 4,830.
"In addition to its delivery and value moat, Jubilant Foodworks is boosting its technological moat to enhance its lead over its QSR peers and aggregators. Improving its pre-order experience, usage of Hindi and regional languages, and setting up of its analytics and insights division are some of the efforts on this front," Motilal Oswal has said.
"Robust growth in urban and rural internet penetration is likely to be boosted further by the launch of 5G technology. Online ordering is growing strongly, even in smaller centers. As a result, delivery and takeaway (a clear focus area going forward) will be the key drivers of SSSG in the next few years, even when dine-in recovers," the brokerage has said.
Other reasons to buy the stock of Jubilant Foodworks
The company recorded its highest ever app downloads at 57.2m in FY21. Despite aggregators doing well, majority of Domino's online sales are generated on its own platform. This is important as it reduces commissions and builds loyalty. "Besides driving sales, usage of its own app gives it access to granular consumer behavior, which helps in better decision making via menu curation, marketing enhancements, and store opening choices. In FY21, the company launched a Hindi version of its app. It is focused on adding support for other languages in its app to personalize the customer experience. The more Jubilant Foodworks expands its store network, greater would be the additional edge. We maintain our Buy rating on the stock with a taregt price of Rs 4,830 per share, " Motilal Oswal has said.
Buy Ceat Ltd: HEM Securities
HEM Securities has a buy call on the stock for a price target of Rs 1,550, as against the current market price of Rs 1,309, implying an upside of nearly 20% on the stock.
Company has a good Capital expenditure plans lined up already. For the Chennai plant expansion, debottlenecking at the Halol plant and expansion in Off the Road Tyre segment. According to HEM Securities, the company has seen recent entries into Honda Bikes till 125 CC, Yamaha FZ 150 CC, Suzuki Gixxer 150 CC, Ashok Leyland Truck 1618, Daimler BSVI Trucks, Piaggio Aprilia 150 CC, Hyundai i20.
"The company targets to use 50% of its its FY23 power requirements from renewable sources," the brokerage has said.
Ceat: Price target of Rs 1550
"Q1FY22 was subdued majorly due to weak demand and raw material cost inflation. Company is strongly focusing on passenger vehicles, OTR and 2 wheeler segments to boost their margins. We believe that strong CAPEX push for FY22-23 would be key driver in gaining CEAT's market share in India. We also believe that company would gradually pass the raw material cost inflation by judicial price hikes and targeting gross margins of 40%-42%. We initiate a "BUY" rating on the stock and value the stock at 12x FY23E earnings to arrive at the target of Rs 1550," says HEM Securities.
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