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63 Moons Technologies Ltd., formerly known as Financial Technologies (India) Limited, is a software company based in Mumbai. It provides a variety of technology solutions for the financial sector, including brokerage trading platforms like ODIN used by leading Indian firms, exchange technology for seamless trading across the markets and risk management software for the banking, financial services and insurance (BFSI) sector. As regards its financials, the company has a market capitalisation of over ₹2,200 crore and has delivered good profit growth of 52.4 per cent CAGR over the last five years.

In its Quarterly Results of Q1FY25, the company reported net sales of ₹38.74 crore and net loss of ₹11.51 crore while in its annual results of FY24, the company reported net sales of ₹472 crore and net profit of ₹210 crore. The company’s strong compounded profit and sales growth, coupled with its low PE ratio of 13.9 as compared to the industry average of 39.4 suggests that the stock may be undervalued. Additionally, the stock is trading at 0.68 times its book value, further indicating potential undervaluation. Given these factors and the expectation of a good quarter, the company’s shares hold potential. Hence, we recommend HOLD.

Rhetan TMT Ltd. manufactures TMT bars and round bars which are primarily used in the construction industry. Its products have been used in the construction of dams, bridges, residential and commercial towers and major infrastructure projects in Gujarat. Rhetan TMT signed a MoU with the Gujarat government in January 2024 to invest Rs40 crore in a solar power plant in Kadi, Gujarat which will supply power to the company’s factory.

The company, with a market capitalisation of ₹1,400 crore, has seen a mixed bag in its recent financial performance. While the net profit surged by 234.1 per cent to ₹2.27 crore in Q2FY25 as compared to Q2FY24, its net sales took a significant hit, declining by 52.7 per cent to ₹4.95 crore. Despite consistent profitability, the company has opted not to distribute dividends to its shareholders. The stock appears to be overvalued based on its PE and PB ratios, which are significantly higher than the industry average. Additionally, the company’s ROCE and ROE stand at 6.50 per cent and 4.44 per cent, respectively, indicating that it is not efficiently utilising its capital. The company’s financials are not stable as the revenue has been decreasing. Given these factors, we recommend AVOID.

Jyoti Structures Ltd. is a leading power transmission company headquartered in Mumbai. Established in 1974, it specialises in turnkey projects for transmission lines, substations and distribution systems. With a global presence, Jyoti Structures Ltd. offers a comprehensive range of services from design and manufacturing to construction. As one of the few EPC service providers capable of executing entire power transmission projects, it has a strong reputation for delivering quality solutions. Its towers and structures play a vital role in supporting power grids, ensuring reliable electricity delivery to millions of consumers.

Its net sales decreased by 52.1 per cent to ₹88.29 crore while net profit increased by 107 per cent to ₹5.09 crore in Q1FY25 as compared to Q1FY24. In its annual results, the net sales increased by 96.9 per cent to ₹451.38 crore in FY24 as compared to ₹229.23 crore in FY23. The company reported net profit of ₹28.86 crore in FY24 compared to net loss of ₹4.07 crore in FY23, indicating an increase of 809 per cent.

Jyoti Structures Limited has secured two significant orders. The first, from Adani Energy Solutions Limited, involves constructing and partially supplying a 765kV D/C KPSIII-AP44 Transmission Line in Gujarat. This project is valued at ₹117.74 crores and is scheduled for completion by October 31, 2025. The second order is from a leading private developer in Gujarat for the supply of towers for a 765 kV DC Transmission Line project, valued at ₹105.57 crores.

Foreign institutional investors (FIIs) increased their stake to 1.86 per cent in September 2024 compared to 0.62 per cent in June 2024. The share is currently trading at a PE of 87.3 times, which is slightly higher than its three-year median PE of 86.7 times. However, the company’s revenue is of concern due to its instability, and the margin appears uncertain. We recommend partially booking profits and holding the remaining shares. As such, we recommend HOLD.

Texmaco Rail and Engineering Ltd (TRE) is an engineering infrastructure company that specialises in manufacturing rolling stock, hydro-mechanical equipment and steel castings. It is also engaged in constructing rail EPC, bridges and other steel structures. Established in 1998, TRE has been operating since 1939 and was previously involved in heavy engineering and steel foundry businesses. The company’s business segments include rolling stock, rail EPC, traction and coaching, steel foundry, bridges and other steel structures, hydro-mechanical equipment and fixed and rocker supports and specials.

In Q1FY25, the company reported strong financial performance, with revenue from operations reaching ₹891.7 crore, indicating growth of 35.8 per cent YoY. This growth was driven by a 48 per cent increase in wagon sales to 1,967 units. The EBITDA stood at ₹97 crore, a 62 per cent YoY growth with a margin of 10.9 per cent. The profit after tax (PAT) was ₹40.2 crore, up 176 per cent YoY, marking record first-quarter levels in company history. Production capacity at the steel foundries in Belgharia and Raipur reached near full capacity, with the production of 9,474 metric tonnes of castings.

The company’s healthy order book of ₹7,500 crore, primarily from Indian Railways, reflects optimism about future orders driven by government initiatives under the National Rail Plan 2030. The acquisition of Jindal Rail and Infrastructure Limited for ₹615 crore is expected to enhance manufacturing capabilities and gain access to new wagon designs. The company’s long-standing presence in the Indian railway industry, coupled with its recent expansions into rail EPC and commodity-specific wagons, positions it well to capitalise on the government’s focus on railway infrastructure development. With a healthy order book of ₹7,878 crore, growing revenue and improved profitability, TRE offers investors a promising opportunity to participate in the growth of the Indian railway sector. Hence, we recommend BUY.

Aeroflex Industries Ltd., established in 1993, is a prominent Indian manufacturer specialising in eco-friendly metallic flexible flow solutions. The company produces stainless steel-based products that facilitate the controlled flow of various substances, including solids, liquids and gases. As part of Sat Industries Limited, Aeroflex Industries Ltd. has solidified its position as a leading player in the Indian market for metallic flexible flow solutions. In Q1FY25, the company posted a strong financial performance. It achieved its highest-ever quarterly revenue of ₹90 crore, representing an 8 per cent increase year-over-year (YoY) and a 15 per cent increase quarter-over-quarter (QoQ).

The profit after tax also rose by 12 per cent YoY and 24 per cent QoQ, reaching ₹12.41 crore. The flexible hose segment continued to be the primary driver of revenue, contributing 55 per cent to the total. The assembly and fitting business accounted for 36 per cent of the revenue while the other segments, including breading, interlock hose and composite hose, together contributed approximately 9 per cent to the overall revenue. Additionally, the company plans to invest ₹18 crore in upgrading facilities and machinery, including a high-technology quality lab. To meet increasing demand, the company has expanded its hose capacity by 1.5 million metres, bringing the total capacity to 15 million metres per annum.

Furthermore, the addition of new assembly stations has increased the total number of assembly stations to 34. Aeroflex Industries Ltd. is a promising investment opportunity due to its focus on emerging sectors and strong growth prospects. The company’s strategic acquisition of Hyd-Air Engineering and its plans for significant investments in upgrading its facilities demonstrate its commitment to innovation and expansion. Also, its confidence in achieving a sales target of ₹1,000 crore within the next 4-5 years highlights its ambitious growth plans and potential for significant value creation. Hence, we recommend BUY.

Cyient DLM Ltd., a prominent player in the electronics system design and manufacturing industry, specialises in creating high-quality, customised electronic components and subsystems for clients in the aerospace, defence and other advanced engineering sectors. The company’s product portfolio includes printed circuit board assembly, cable harnesses and box builds. To meet the growing demand, the company has strategically expanded its manufacturing facilities in Mysuru, Hyderabad and Bengaluru. The company is aiming for a substantial growth trajectory with a target CAGR of 30 per cent over the next three years.

Financially, the company has demonstrated steady growth, with Q1FY25 revenue reaching ₹257.9 crore, a commendable 18.8 per cent increase year-on-year. While the EBITDA remained flat, its PAT experienced a significant surge of 97.7 per cent, reaching ₹10.6 crore. The order book at the end of Q1 stood at ₹2,126.7 crore, slightly lower than the previous quarter. The company has secured several notable logo wins in the past quarter, including a global semiconductor company, a defence company, a medical technology company and a large defence and aerospace company.

By focusing on build-to-spec programmes, the company aims to improve margins. Additionally, it is expanding its technology organisation and strengthening its presence in the Indian market. Cyient DLM Ltd. is planning to expand its global reach by targeting new industries such as electric vehicles, infrastructure and energy. The company intends to acquire US-based manufacturers and invest in a semiconductor programme. While its current valuation may seem high, its ambitious plans and promising future outlook could justify this valuation. The company also plans to continue investing in the aerospace and defence sectors.

Given these factors, we recommend BUY.

Ashoka Buildcon Ltd. is a prominent Indian construction and infrastructure company specialising in EPC (engineering, procurement and construction) and BOT (build, operate, transfer) projects. With a focus on highways, bridges, power, railways, buildings and city gas distribution, the company is a major player in India’s infrastructure development. Its expertise and experience have led the company to execute numerous large-scale projects across the country, contributing significantly to the nation’s growth and development. Further, the company reported strong financial performance in Q1FY25.

Its total income grew by 26 per cent YoY to ₹2,495 crore, with a significant increase in both EBITDA of 23 per cent YoY and PAT of 156 per cent YoY. Despite a temporary increase in debt due to working capital needs for ongoing projects, the standalone debt-to-equity ratio remains healthy at 0.5 per cent. The full-year target is an EBITDA margin of 8 – 10 per cent, with the possibility of returning to its historical levels of 10 – 12 per cent in FY 2026. Looking ahead, the company anticipates revenue growth of 15 – 20 per cent for FY25 and expects order inflows of around ₹10,000 – ₹12,000 crore.

This positive outlook is further supported by NHAI’s plans to offer attractive BOT projects and monetise assets through infrastructure investment trusts, creating a favourable environment for the company’s continued growth across various sectors. The shares of Ashoka Buildcon Ltd. are currently trading at a PE ratio of 13.3 times, which is significantly lower than the industry average of 35.8 times. This suggests that the stock may be undervalued. Additionally, as of March 31, 2024, the company had a substantial order book of ₹11,697 crore, indicating a strong pipeline of future projects. These factors make Ashoka Buildcon Ltd. a potentially attractive investment opportunity.

Hence, we recommend BUY.

Sudarshan Chemical Industries Ltd. is a leading manufacturer and seller of a diverse range of organic, inorganic and effect pigments, as well as industrial equipment. Its products have wide applications in coatings, plastics, inks and cosmetics. With manufacturing facilities in Mahad and Roha and a dedicated research and development centre in Pune, the company serves both domestic and international markets, exporting to over 85 countries. Sudarshan Chemical Industries Limited’s strong global presence and commitment to innovation have solidified its position as a key player in the chemical industry.

The company reported a strong financial performance in Q1FY25, with total income from operations increasing by 4 per cent YoY to ₹634 crore. The EBITDA grew by 15 per cent YoY to ₹81 crore, resulting in an EBITDA margin of 12.7 per cent. Its profit after tax rose to ₹29 crore from ₹21 crore in the previous year. The pigment business continued to perform well, with income from operations increasing by 10 per cent YoY to ₹589 crore. Domestic sales grew by 9 per cent YoY to ₹287 crore, while export sales increased by 11 per cent YoY to ₹302 crore. Specialty pigment sales accounted for ₹402 crore (up 11 per cent YoY), and non-specialty sales were at ₹187 crore (up 7 per cent YoY).

The gross margin for the pigment business improved to 47.2 per cent and EBITDA increased by 41 per cent YoY to ₹90 crore with an EBITDA margin of 15.3 per cent. While the current valuation of Sudarshan Chemical Industries Ltd. may seem high, the positive outlook for the chemical sector suggests that the company has significant growth potential. It is wellpositioned to benefit from this sectoral growth and the management is optimistic about improving the EBITDA margins as capacity utiliszation increases. These factors suggest that the company’s valuation could be justified by its future prospects. Hence, we recommend HOLD.

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