JM Financial has picked three stocks to bet on: CMS Info Systems, OneSource Specialty Pharma, and Vishal Mega Mart. The brokerage house sees as much as 35% upside in one of these stocks. Here’s a detailed analysis of why the brokerage firm picked these stocks. Read below to know more.
JM Financial on CMS Info Systems: Attempt to rebrand and ramp up in non-BFSI businesses
JM Financial maintained its ‘Buy’ rating on CMS Info Systems, with a target price of Rs 465, implying an upside of 25% from current levels. The company is attempting to rebrand itself as a platform, with efforts being directed towards ramping up non-BFSI businesses. Plus, an overhaul of key segments, which will now be classified into ATM managed solutions, retail solutions, and technology and payment solutions.
However, CMS Info Systems’ management has hinted towards a muted FY26 and given guidance of Rs 3,900 crore-4,100 crore in revenue by FY30, indicating an FY25-30 CAGR of 11%, with margins continuing at current levels.
JM Financial on OneSource Specialty Pharma: Acquisition to add significant revenue
JM Financial has maintained its ‘Buy’ rating on OneSource Specialty Pharma, with a target price of Rs 2,417, implying an upside of 35% from the current levels. OneSource Specialty Pharma approved a strategic deal to acquire Steriscience’s Poland-based CDMO business and Brooks Steriscience’s anti-infective unit in India. The acquisitions, valued at a relative discount, are expected to add $100 million in revenue and $35 million in EBITDA by FY27, taking OneSource’s top line beyond $500 million by FY28.
However, the transaction will lead to approximately 18.5% dilution for existing OneSource shareholders. Post-merger, promoter shareholding will increase from 30% to 36%, while public shareholding will dilute from 70% to 64%. Nonetheless, the deal diversifies the portfolio beyond GLP-1, strengthens injectables capacity, and de-risks operations with a European footprint.
JM Financial on Vishal Mega Mart: Initiates coverage
JM Financial initiates coverage on Vishal Mega Mart with a ‘Buy’ call, with a target price of Rs 175, which is an upside of 22% from current levels. Vishal Mega Mart (VMM) is a one-stop destination for aspirational middle- and lower-middle-income India, curating a diverse range of merchandise via its own brands and third-party brands. The company offers products in three major categories – FMCG (28%), Apparel (44%), and General merchandise (28%), through a pan-India network of 717 stores, across 472 cities and 30 States/UT. The company derives more than 70% of its revenue from Tier 2-and-beyond regions. Adding to that, the company has an efficient supply chain, which ensures asset-light operations. It operates on a very lean cost structure and an efficient inventory management system, which is the heart of retailing.