Initiating Coverage: Which name is Bank of America banking on and why Kotak is cautious on this new listing

Ather Energy Ltd., PhysicsWallah Ltd., and Indo MIM Ltd., have seen analysts initiating coverage on Tuesday, September 22. While Bank of America Securities has bet on Ather Energy, it is cautious on PhysicsWallah. Similarly, Kotak Institutional Equities is also cautious on Indo-MIM, a recent listing that has seen a significant jump from its issue price within a few days of listing.

Bank of America has initiated coverage on Ather Energy with a "buy" rating and a price target of ₹1,900, indicating an upside potential of nearly 20% from current levels.

Bank of America has also initiated coverage on PhysicsWallah with an "underperform" rating and a price target of ₹110, while Kotak Institutional Equities has initiated coverage on Indo-MIM with a "reduce" rating and a price target of ₹1,110.

Why Is Bank of America betting on Ather Energy?

Bank of America wrote in its note that India's Electric Vehicle adoption is at a tipping point and Ather is the best proxy to play this theme.

Scale will be the next leg of growth for Ather, according to Bank of America, as the EL platform and AURIC will unlock market expansion and capacity scale, with demand being ahead of supply.

Why Bank of America does not like PhysicsWallah?

The brokerage said that it is cautious on the timing of the earnings inflection and the rich valuations of the company, which are now at 71 times their financial year 2028 estimated price to earnings.

With offline economics still unproven, Bank of America expects center addition to be slower and as a results, their Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) estimates for PhysicsWallah, are 10% to 15% below the consensus street view.

Why Is Kotak Cautious On Indo-MIM?

INDO-MIM is well positioned to benefit from aerospace, defence and electronics localization while its strong cash generation and available capacity provide room for expansion, Kotak wrote in its note.

However, the stock has already run-up 140% from its issue price within a few days of listing.

All 16 analysts who currently track Ather Energy have a "buy" rating on the stock. The stock is up 115% so far this year.

Seven out of the nine analysts who cover PhysicsWallah have a "buy" rating on the stock, while one each have a "hold", and "sell" rating. The stock has recently turned positive on a year-to-date basis.

This is the third initiation for INDO-MIM but the first bearish one, with the other two being bullish recommendations.