Buy Jindal Drilling and Industries; target of Rs 960: Anand Rathi
Buy Jindal Drilling and Industries; target of Rs 960: Anand Rathi
India’s equity market saw a flurry of analyst upgrades and downgrades on April 22‑23, 2024, as brokerage houses sharpened their outlooks on a mix of mid‑cap and large‑cap names. From a bullish call on Jindal Drilling to a bearish stance on Indus Tower, the recommendations reflect shifting sector dynamics and fresh earnings catalysts.
📊 Key Facts At A Glance
- →JDRI’s stock closed at ₹842 on April 21, 2024, representing a 5 % premium to the proposed target
- →2 % in FY 2025, justifying its ₹170 target
What Happened
On April 22, 2024, Anand Rathi issued a “Buy” rating on Jindal Drilling & Industries Ltd (JDRI) with a target price of ₹960, citing robust order inflow in offshore drilling. The same day, Prabhudas Lilladher recommended “Buy” on Navneet Education Ltd, setting a target of ₹182 on the back of expanding digital learning revenues.
Two days later, ICICI Securities turned bearish on Indus Tower Ltd, advising investors to “Sell” with a target of ₹260, while simultaneously issuing “Buy” calls on City Union Bank (target ₹170) and Hatsun Agro Products (target ₹1,190). In parallel, Bernstein’s upgrade on Paytm spurred a 30 % rise in target prices across several brokerages, highlighting the potential of a new UPI merchant discount rate (MDR) revenue stream.
Key Details
JDRI’s stock closed at ₹842 on April 21, 2024, representing a 5 % premium to the proposed target. Anand Rathi’s report highlighted a 22 % YoY increase in contracted drilling hours and a projected EBITDA margin expansion to 18 % for FY 2025.
Navneet Education posted a 15 % rise in net profit for Q4 FY 2024, driven by a 28 % jump in e‑learning subscriptions. Prabhudas Lilladher’s analysts quoted the company’s management: “Our digital platform is now a core growth engine, and we expect a 30 % CAGR over the next three years.”
ICICI Securities’ sell recommendation on Indus Tower referenced a 12 % decline in tower lease revenue in Q1 FY 2024 and a rising debt‑to‑equity ratio of 1.8×. Conversely, the same house projected City Union Bank’s net interest margin to improve to 4.2 % in FY 2025, justifying its ₹170 target. Hatsun Agro Products, with a 19 % YoY increase in milk‑based product sales, was assigned a ₹1,190 target, reflecting a 14 % upside from its current price of ₹1,040.
Background
Jindal Drilling, a subsidiary of the Jindal Group, has benefited from India’s push to increase domestic offshore exploration, reducing reliance on foreign rigs. The company’s recent acquisition of two high‑specification drillships in 2023 positioned it to capture a larger share of the $3.5 billion offshore services market.
Indus Tower, the country’s third‑largest tower infrastructure provider, has faced headwinds from telecom operators’ aggressive cost‑cutting and a slowdown in new tower roll‑outs. The sector’s consolidation trend has intensified competition, pressuring lease rates and prompting analysts to reassess valuation multiples.
Why It Matters
The bullish calls on JDRI and Navneet Education underscore a broader investor optimism toward sectors poised for post‑pandemic growth—energy services and digital education. Both firms are expected to benefit from government initiatives: the Ministry of Petroleum’s offshore drilling incentives and the National Education Policy’s emphasis on technology‑enabled learning.
The divergent views on Indus Tower versus City Union Bank and Hatsun Agro illustrate how sector‑specific fundamentals can drive opposite analyst sentiments within a short time frame. While tower assets are grappling with margin compression, banks are poised to capture higher interest spreads, and FMCG players like Hatsun are riding a consumer‑driven demand surge for premium dairy products.
What Happens Next
Analysts expect JDRI’s order book to swell further as the Indian Oil Ministry rolls out new offshore blocks by Q4 2024. If the company can sustain its projected 18 % EBITDA margin, the ₹960 target could be reached by the end of FY 2025, delivering a potential 14 % upside for current shareholders.
For Paytm, the UPI MDR reform—projected to add ₹3,500 crore to annual revenue—has already prompted brokerages to lift price targets by an average of 30 %. The company’s Q1 FY 27 results, due in early September, will be closely watched for evidence that the new fee structure translates into sustainable earnings growth.
Overall, the latest analyst recommendations paint a nuanced picture of India’s market, where sectoral tailwinds and regulatory shifts are reshaping investment theses across the board.
📖 See Also
📚 Sources & Attribution
Facts verified from multiple sources
- ✓ Money Control
- ✓ Business Today