The markets are shut on May 1, but are you wondering about what would be a good bargain for May? The brokerage firm, Nuvama Institutional Equities, has a ‘Buy’ recommendation on these stocks at this hour. There are many reasons, like a strong set of quarterly earnings, a rise in gross written premium (GWP), an increase in EBITDA, and many other factors. Read to know more about these stocks.
Varun Beverages
PepsiCo’s bottler outside the US, Varun Beverages, reported a strong Q1CY25 with revenue up 29% YoY. Its EBITDA was up 28% YoY, coming in line with the broker’s estimates. Following this, the brokerage firm retained a ‘Buy’ call on the stock with a target price of Rs 659 per equity share. The company’s consolidated volume was up 30.1% YoY while India volume grew 15.5% YoY, spurred by a strong heatwave, which came ahead of Nuvama’s expectation of 12–13%. The realisation per case in India inched up 1.8% YoY, while consolidated net realisation per case eased down marginally by 0.9% YoY. Gross margin of 54.6% decreased 171 bps YoY owing to an adverse mix in India and increased salience of the South Africa business.
Five Star Business Finance
The brokerage house Nuvama has a Buy call on the stock after the company delivered a strong set of numbers in Q4FY25. Its net profit in Q4FY25 grew 18% year-on-year and 2% sequentially. Its assets under management, compared to disbursals, rose quarter-on-quarter after the recalibration in Q3. However, the bank’s collection efficiency deteriorated QoQ driven mainly by the Karnataka ordinance and partly by the overleverage of small borrowers. This triggered a cut target price by 12.3% to Rs 820 from Rs 935. “In the near term, concerns on the TN ordinance, slower earnings growth in FY26E and the impact of moving to higher ATS would prevail,” said Nuvama.
Star Health and Allied Insurance
Nuvama has a Buy rating on Star Health Insurance and raised the target price slightly by 2.3% to Rs 450 from Rs 440. In Q4FY25, GWP grew 12.9% YoY. Loss ratios stayed elevated at 69.2%, which rose 512 basis points year-on-year and declined 220 bps QoQ. Its commission and expenses ratio also rose 131 bps YoY. This resulted in an overall 642 bps YoY jump in combined ratio to 99.2%, resulting in an underwriting loss of Rs 280 crore, an increase of 202.2% YoY. “We expect corrective actions in the form of selective underwriting and repricing, along with scale benefits to reduce CoRs. We are tweaking estimates, pushing down our FY26/27 adjusted profit after tax (APAT) by 7.8%/5.1%,” said Nuvama.