Brokerages remained upbeat on Vedanta Ltd. and Piramal Pharma Ltd. this Tuesday. Citi Research maintained a 'buy' rating on Vedanta despite its high dividend outflows, highlighting steady cash inflows from Hindustan Zinc Ltd.
Meanwhile, JM Financial initiated coverage on Piramal Pharma with a 'buy' rating, projecting robust growth in the Contract Development and Manufacturing Organisation segment and margin expansion over the next three years.
NDTV Profit tracks what brokerages are putting out on stocks and sectors. Here are all the top calls from analysts you need to know about on Tuesday.
Citi On Vedanta
Retained a 'buy' rating on the stock and a target price of Rs 485 apiece, implying a potential downside of 5.6% from the previous close.
Board announced the fourth interim dividend of Rs 8.5 per share, with the record date set as Dec. 24.
Total outflow for the dividend is estimated at Rs 3,300 crore.
Cumulative cash outflow for the four dividends stands at Rs 16,800 crore.
Dividend received from Hindustan Zinc Ltd. in fiscal 2025 so far is approximately Rs 7,800 crore.
Vedanta owns a 63.4% stake in Hindustan Zinc.
JM Financial On Piramal Pharma
Initiated 'buy' rating on the stock with a target price of Rs 340 apiece, implying a potential upside of 36% from the previous close.
India’s Contract Research, Development, and Manufacturing Organisation market is expected to double by 2028, boosting opportunities.
Piramal Pharma’s global capabilities position it well to capitalise on the sector’s growth.
Contract Development and Manufacturing Organisation segment is expected to grow at a 17% Compound Annual Growth Rate over three years.
Recovery in United States biotech from the second half of fiscal 2025 is likely to support growth.
Overall revenue is projected to grow at approximately 15% CAGR over fiscals 2024 to 2027.
Margins are expected to expand by 360 basis points to 18%.
Ebitda CAGR of over 23% will likely improve cash flow and reduce net debt.
Stock trades at around a 38% discount to peers.
Citi On IT Services
Concluded a four-day Global IT Services Tour, hosting 17 sessions with companies and experts.
Gradual and uneven recovery is underway.
United States and Europe stocks are at low to mid-cycle valuations.
Indian IT stocks are near multiyear peaks, driven in part by strong local flows.
Preference remains for Infosys Ltd. and HCL Technologies Ltd. Both rated 'neutral'.
Other stocks such as LTIMindtree Ltd. and Mphasis Ltd.—both rated 'sell'—could benefit more from the cyclical upturn in United States banking and financial services.
Antique On Quess Corp
Initiated 'buy' rating on the stock with a target price of Rs 1,000 apiece, implying a potential upside of 50% from the previous close.
The company is the 46th largest global staffing firm by revenue.
Quess Corp is a clear beneficiary of strong hiring trends across various segments.
Strong momentum is being driven by the growth of global capability centers in India.
Revenue is expected to grow at a 12% to 14% CAGR over fiscals 2024 to 2027.
Target price is based on 25 times price-to-earnings on fiscal 2027 earnings per share.
Investec On Indian Paints
Competition remains intense amid weak demand, maintaining a cautious stance.
Birla Opus is steadily gaining traction.
Berger Paints is attempting to penetrate metro markets.
Third quarter demand remains subdued, with hopes for a revival in the fourth quarter.
Dealers earn 7% to 8% incentives on Birla Opus, compared to 3% to 4% on Asian Paints and 5% to 6% on Berger Paints and Akzo Nobel.
Birla Opus is priced approximately 5% lower than Asian Paints.
Asian Paints and Berger Paints remain fast-selling ideas.
Motilal Oswal On Kirloskar Oil Engines
Reiterated 'buy' rating on the stock with a target price of Rs 1,540 apiece, implying a potential upside of 38% from the previous close.
Remains positive on the company despite a decline in volumes in the power generation segment.
The company is gradually increasing its presence in export markets.
Revenue is expected to grow at a 17% CAGR over fiscals 2024 to 2027.
Estimates for fiscals 2025, 2026, and 2027 have been cut by 7%, 4%, and 1%, respectively, on account of lower revenues in the power generation segment.
Stock is trading at 31 times, 23 times, and 18 times fiscal 2025, 2026, and 2027 earnings per share, respectively, at a 45% to 50% discount to the market leader.
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