Amber Enterprises, Kajaria Ceramics, Supreme Industries are key picks of Jefferies in small & mid-cap space.

 Analysts at Jefferies said that they stay bullish on capex and housing theme as well as Electronics Manufacturing Services (EMS).  Likewise, their top Picks are Supreme Industries, Kajaria Ceramics and Amber Electronics. 

For Supreme Industries the margin uptick likely from FY24 with stabilizing PVC, which is 40% value added mix, remains a key driver. Similarly for Amber electronics, Jefferies say that are bullish on Amber’s diversification into components, and their estimated FY23-26 estimates sales, net profit CAGR (compound annual growth) stands at 17% and 40% respectively. 

Kajaria Ceramics as per Jefferies is a good play on home-furnishing; Morbi export focus is to aid domestic demand, pricing stability. 

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FInolex Industries, V-Guard Industries are also Buys for Jefferies while they have Hold ratings on Havells (India) Ltd, Astral Ltd and Pidilite Industries Key risks as per Jefferies ate Demand slowdown, higher volatility in key inputs (PVC, copper, VAM).

The companies under the Jefferies SMID coverage (excluding UPL Ltd, graphite electrodes) posted strong Profit before tax growth of 24% year-on-year. Healthy sales growth at 17% year-on-year, was driven by volumes in Cables & Wires (C&W) and Building Materials. 

The key themes as per Jefferies playing out well are based on Capex & Housing (Polycab India, Finolex Cables, Pidilite) and Building Materials (Supreme Industries, Astral). 

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Softer commodities aided the 50bps year-on-year operating margin improvement. (100 bps make 1%). The Highest year-on-year margin expansion was seen in Pidilite Industries, Kajaria Ceramics, Supreme Industries and Finolex Industries. But, the commodity plays were key   misses.  UPL Ltd was impacted by global supply glut, Electrodes manufacturers (graphite and HEG) were impacted by pricing pressure, while Whirlpool India posted a miss yet again due to softer sales and margins.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions

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Published: 27 Feb 2024, 12:50 PM IST