| Company | Buying Range | Traget Price | Investment Horizon | Rec |
|---|---|---|---|---|
| Advanced Enzyme Tech Ltd | Rs. 440 to rs. 450 | Rs. 533 | Till Next Diwali | BUY |
| Ami Organics Ltd. | Rs 1,610 to Rs 1,620 | Rs 1,897 | Till Next Diwali | BUY |
| BEML Ltd. | Rs 3,770 to Rs 3,800 | Rs 4,546 | Till Next Diwali | BUY |
| Reliance Industries Ltd. | Rs 1,330 to Rs 1,345 | Rs 1,568 | Till Next Diwali | BUY |
| TARC Ltd. | Rs 222 to Rs 227 | Rs 260 | Till Next Diwali | BUY |
Table of Contents
Company Background
Advanced Enzyme is a biotech company with a significant market share in manufacturing enzymes and probiotics. It is the largest Indian company in R&D, manufacturing, and marketing products developed from over 65 indigenous enzymes and probiotics. The company operates in the following segments: human nutrition, animal nutrition, industrial bio- processing, and specialized manufacturing. It has nine manufacturing facilities (seven in India and two in the USA) and seven R&D centres (five in India, one each in the USA and Germany).
Investment Rationale
Strong market presence and inorganic expansion to unlock higher potential
The company has the second-largest market share in India, enabling it to command a strong market presence. It also boasts an integrated business framework spanning the value chain, ensuring optimal efficiency and cost-effectiveness. The company demonstrates a track record of successful inorganic expansions through three internal accrual-based acquisitions while maintaining its status as a zero-debt company. Its recent acquisition of JC Biotech (India), which is engaged in the production of nutraceuticals, biopharmaceuticals, and biochemicals, further enhances its product offerings.
Strategic portfolio expansion augurs well for the company’s growth
The company aims to expand its B2C business in the human nutrition segment by introducing weight management, sugar management and immunity-boosting products like ImmunoSEB and Biome Ultra. As part of its strategy to drive growth, it has entered into a B2C brand – Wellfa – an online platform that caters to the Indian market. The company further plans to introduce probiotic products for human and animal nutrition.
Valuation and Outlook
The global enzyme and probiotic market is $11.3 billion and $70 billion in size and is projected to grow at a CAGR of 6.0% and 7.75%, respectively, indicating significant potential in both markets. With AETL’s current market position, there is a large opportunity that it can address with the help of its diverse product offering and strong R&D capabilities. On the valuation front, we are positive on the long-term aspects of the company and value it at a P/E of 31x based on FY25E earnings to arrive at a target of Rs. 533, which is 19% upside from CMP.
Ami Organics Ltd.
Company Background
Ami Organics Limited is an R&D-focused specialty chemicals manufacturer, specializing in advanced pharmaceutical intermediates for APIs, NCEs, and agrochemical materials. With four facilities in Gujarat and Uttar Pradesh, Ami Organics serves high-growth medical sectors and has a portfolio of over 570 products catering to 500+ customers in 45 countries. Its recent acquisition of Baba Fine Chemicals marks its entry into the semiconductor chemicals space. The company’s key products hold a global market share of 50%-90%, with a strong presence in regions like the US, China, Israel, Japan, and Europe, accounting for 56% of its international sales.
Investment Rationale
Strong capabilities in the advanced pharma intermediate business
Ami Organics holds a substantial 50-90% market share in key molecules across 17 fast-growing therapeutic areas, backed by ten process patents valid for 10-15 years. This patent portfolio secures Ami’s market position, especially as API patents expire in various regions, creating opportunities in the generics market where Ami supplies intermediates. Recent successful inspections by USFDA and PMDA (Japan) position Ami to advance in the API value chain, aligning with a pharmaceutical market that is gaining momentum globally.
Electrolyte additives for battery cells are a key growth driver
Ami Organics has developed two electrolyte additives, Vinyl Carbonate (VC) and Fluoroethylene Carbonate (FEC), for battery cells and is expanding production to 2,000 MT each. As the first non-Chinese producer of these additives, Ami has signed an MoU with a global electrolyte manufacturer to produce electrolyte solutions in Gujarat, India. This forward integration strengthens its position in the rapidly evolving battery chemicals market. With growing battery demand worldwide and supportive policies like the IRA in the US, Ami is strategically expanding to capture new opportunities within the global and Indian battery ecosystems.
Valuation and Outlook
Ami Organics Ltd. is set for strong growth, with a 25% guidance for the year supported by substantial market share in key molecules across 17 chronic therapeutic areas. Despite pricing challenges from Chinese oversupply in the API industry, Ami’s core products in chronic medications remain resilient. The company’s focus on innovation includes supplying intermediates for the prostate cancer drug Nubeqa, projected to generate Rs.5-7 billion in revenue. Its acquisition of Baba Fine Chemicals has opened opportunities in semiconductor chemicals, while specialty chemicals and new product launches in pharma intermediates and electrolyte additives should enhance revenue. Thus, we give the stock a “Buy” rating based on the above factors. On the valuation front, we value the company based on 70x of FY25E earnings and arrived at a target price of INR 1,897.
BEML Ltd.
Company Background
BEML Ltd., established in 1964, is a Mini Ratna ‘Category 1’ company under India’s Ministry of Defence, serving key sectors like defence, aerospace, mining, steel, power, railways, and metro transportation. It primarily manufactures mining and construction equipment, including excavators, bulldozers, and dump trucks, contributing 43% of its revenue. Other segments, railway and metro, and defence and aerospace, generate 38% and 19% of revenue, respectively. BEML supplies defence equipment to the Indian Army and operates four manufacturing units across Karnataka and Kerala, along with 11 SBUs and 2 Micro SBUs.
Investment Rationale
Strong order book boosts revenue and margin growth
BEML has finalised large ticket orders like Bangalore Metro and Vande Bharat sleeper class, which has made its order book strong from Rs. 8,570 crores to 11,872 crores for FY24. Large-ticket order finalisation in the Railway & Metro segment has helped the company improve its overall revenue and margins. In the defence segment, the order book was dominated by significant orders like armoured recovery vehicles and Pinaka missile launchers, which are intended to be executed over the next three years.
Strategic restructuring, capacity expansion and R&D investments drive growth prospects
BEML has restructured into 11 Strategic Business Units (SBUs) and two micro SBUs, with a target for each SBU to generate an average turnover of Rs. 1,000 crores and each micro SBU Rs. 500 crores. With R&D expenditure increased to Rs. 87 crores, BEML is strengthening its focus on innovation, including the development of a 1500 HP engine for battle tanks. Additionally, BEML has allocated Rs. 480 crores from last year’s revenue for capital expenditure, aimed primarily at expanding capacity and supporting the defence segment. These strategic initiatives position BEML for significant growth across key sectors.
Valuation and Outlook
BEML is a significant player in the rail and metro, defence, mining, and construction sectors. Initially, the company started with a turnover of Rs. 5 crores, and today, due to its diverse business portfolio, it has reached a turnover exceeding Rs. 4,300 crores. The company had a strong order book of Rs. 11,872 crores in FY24, with the Vande Bharat sleeper class being a major component, and it is nearing completion this year. The company is focused on ramping up its order book within the defence and rail and metro segments and is also working on expansions and development within these segments. On the valuation front, we are thus positive about the long-term prospect of the company and value it at a P/E of 55x based on FY25E earnings to arrive at a target of INR 4,546, which is an 20% upside from current levels.
Reliance Industries Ltd.
Company Background
Reliance Industries Limited (RIL) is a diversified conglomerate with a dominant presence across multiple sectors, driving India’s economic growth and innovation. RIL is a Fortune Global 500 company and the largest private sector corporation in India. The principal activities of RIL & its joint ventures and associates consist of Oil to Chemicals (O2C), Oil and Gas, Retail and Digital Services. Additionally, RIL is expanding into the renewable energy space with ambitious goals for green energy and sustainability, including a commitment to becoming net carbon zero by 2035.
Investment Rationale
AI and New Energy key drivers for the next five years
RIL is set to invest ₹75,000 crore in new energy ventures, targeting an integrated ecosystem in solar, battery storage, and electrolysers. Key projects include a 10 GW solar PV module facility by end-2024, a 30 GWh energy storage solution launching in H2 2025, and a multi-gigawatt electrolyser setup by 2026. RIL projects earnings from its new energy segment to match its O2C business (₹62,393 crore EBITDA in FY24) over 5-7 years. Additionally, RIL is investing in AI and GW-scale data centers with JioBrain, offering affordable AI services and 100GB free cloud storage for Jio users starting this Diwali.
Jio aims for 2x growth in revenue/EBITDA in next 3-4 year
Reliance Industries (RIL) is leveraging 5G to rapidly expand home broadband, targeting 100 million home and 20 million SME subscribers. RIL aims to double Jio’s revenue and EBITDA within 3-4 years, building on FY24 figures of ₹109,558 crore revenue and ₹54,959 crore EBITDA. With over 130 million 5G users, RIL is focused on boosting growth through fiber-to-the-home and AirFiber technologies. Jio AirFiber, which reached 1 million homes in six months, aims to add another million monthly, capitalizing on AI opportunities and extensive 5G adoption to drive substantial future growth.
Valuation Outlook
RIL stock has underperformed relative to the broader markets, delivering negative 10% returns year-to-date in CY25, compared to an 8% gain for the Nifty-50. However, we believe this underperformance could reverse, driven by a faster-than- expected recovery in its retail business and positive developments in its new energy ventures. Additionally, a potential tariff hike in the telecommunications sector and a recovery in the petrochemical business is expected to further boost RIL’s overall business performance, offering upside potential for the stock. Thus we are positive about the long-term prospects of the company and value it at a P/E of 28x based on FY25E earnings to arrive at a target of Rs. 1,568 which is 20% upside from current levels.
TARC Ltd.
Company Background
TARC Ltd. (The Anant Raj Corporation), previously Anant Raj Limited, has evolved from a construction-focused company to a leading real estate developer in the New Delhi Metropolitan Area, specializing in luxurious residential, hospitality, commercial, and retail projects. Following a strategic demerger in 2020, TARC, under Mr. Amar Sarin’s leadership, has launched successful projects like TARC Maceo, TARC Tripundra, TARC Kailasa, and TARC Ishva. With a strong land bank and plans for three additional projects in the next 18 months, TARC is committed to delivering high-quality developments that reflect modern luxury living and solidifying its position in the real estate sector.
Investment Rationale
Company poised to capitalize on India's growing real estate story
The Indian real estate sector is projected to reach $1 trillion by 2030, driven by rising demand for luxury and mid-income housing. In Delhi, unsold stock dropped to 606 units in 2024 from 1,190 in 2019, indicating strong absorption and increasing prices. TARC is poised to capitalize on this trend, with expected pre-sales exceeding Rs. 150 billion during FY2025-27 period. Its flagship projects, TARC Kailasa and TARC Ishva, highlight its commitment to quality. With a significant land bank in prime locations and a robust project pipeline valued at over Rs. 7,700 crores, TARC solidifies its position as a key market player.
Strengthening financial stability and pursuing debt-free growth
TARC is targeting ₹5,000 crore in presales for FY25, having already achieved ₹1,012 crore in Q2FY25 (up 900% YoY) and ₹1,332 crore in H1FY25 (up 600% YoY). With a Gross Development Value (GDV) of ₹7,700 crore from projects like Tripundra, Kailasa, and Ishva, it anticipates ₹500 crore from Tripundra alone. A recent refinancing of ₹1,000 crore at 12.75% will help reduce costs. TARC aims to be debt-free by FY26, focusing on cash flow from project deliveries, and expects financial gains of ₹150 billion by FY27, positioning it for strong growth in real estate.
Valuation and Outlook
TARC is poised for exponential growth, leveraging its extensive land bank, diversified portfolio, and superior execution capabilities. The Indian real estate sector is benefiting from rising demand for luxury and mid-income housing, with positive absorption trends indicated by the decline in unsold stock in Delhi. TARC anticipates improved cash flows from the delivery of TARC Tripundra and maintains a robust financial outlook, supported by a strong project pipeline and timely execution of ongoing developments. With the combination of these elements, we remain positive on the overall growth story of the company. On the valuation front, we value TARC at a P/E of 62x based on FY25E earnings, arriving at a target of Rs. 260 which reflects a 19% upside from the current market price (CMP).
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