Brokerage Views: Citi, Nomura On Wipro, Morgan Stanley On GAIL And More

Top brokerages from Citi to Nomura have taken various stock calls, including on shares of Wipro Ltd. after the IT major announced the appointment of Srinivas Pallia as its new chief executive officer and managing director following the resignation of Thierry Delaporte.

India's benchmark stock indices erased earlier losses to close little changed on Friday, led by gains in rate-sensitive realty and banking stocks after the Reserve Bank of India kept the rate unchanged at policy. This helped the indices clock their third weekly gain.

The NSE Nifty 50 settled 10.85 points, or 0.048%, higher at 22,525.50, and the S&P BSE Sensex gained 20.59 points, or 0.028%, to end at 74,248.22.

NDTV Profit is tracking what brokerages are putting out on specific stocks. Here are all the top calls you need to know about on Monday.

Citi On Wipro After CEO Change

Citi maintains ‘sell’, sees valuations at 21 times one-year forward EPS.
Wipro has seen several CEO changes to revive revenue growth, but it’s still work in progress.
Investors will keenly await new CEO’s communication on Wipro’s priorities.
Large deal wins has been an area where Wipro seems to lag TCS, Infosys.
Capital allocation key focus area as Wipro’s 40-50% payout is significantly lower than TCS, Infosys.

Also Read: Change Of Guard At Wipro: Thierry Delaporte Resigns As MD & CEO

Nomura On Wipro

Nomura maintains 'reduce' rating on the IT firm with a target price of Rs 410.
New CEO to have a headstart as he is a 32-year veteran.
New CEO’s task is to bring back revenue at the earliest.
Senior-level exodus needs to be stemmed immediately.
Both CEO, CFO being internal candidates instills confidence.

* Wipro to still lag its peer set growth rate in FY25F

Jefferies On Wipro

Jefferies retained 'underperform' rating with a target price of Rs 470.
Wipro CEO’s resignation reflects continued execution issues
With discretionary demand under pressure, appointment of an internal candidate limits “hopes of a turnaround and rich valuations”.
Any improvements in performance under the new CEO is likely to be gradual in our view.

Nirmal Bang On Wipro

The brokerage maintained 'sell' with target price of Rs 441.
External demand conditions to dictate growth trajectory.
Wipro’s consulting unit under Capco to be a drag.
New CEO to be tested on performance when demand returns.
Investors, promoters to give new CEO three years to deliver.

Morgan Stanley Gives GAIL Its Most Bullish Target Price

Morgan Stanley maintains 'overweight' on GAIL (India), with target price of Rs 254 (33% upside).
Expects GAIL's market cap could double by 2026.
Expects gas to double in India's primary energy mix from 6% to 12% by 2030.
Monetisation of assets, chemical up-cycle to help double Ebitda by 2027.
Expects gas import costs to hit 20- year low in 2026.
Expects 13% earnings CAGR in next three years.
Mix of Ebitda shifting to higher-multiple, transmission and petchem businesses, volume growth are key to re-rating.

Citi Upgrades Info Edge, Sees 17% Upside

Citi upgraded Info Edge (India) to 'buy' and raised target price to Rs 6,650, a potential upside of 17% from the current market price.
Recruitment business billings up 7% YoY in Q4, likely bottomed out.
Raise core business Ebitda estimates up 8% for both FY25 and FY26E.
Expect lower Ebitda losses across non-recruitment verticals on YoY basis.
Bulk of recruitment billings recovery to translate to revenue acceleration from FY25E.
Strong Q4, decent FY24 in recruitment business indicates resilience against challenging IT services hiring environment.
Sees tailwinds for core business: sustained recovery in recruitment billings growth, Ebitda breakeven in non-recruitment.

Jefferies Initiates Coverage On IDFC First Bank

Jefferies initiates coverage on IDFC First Bank with a 'buy' with a target price of Rs 100. This implies an upside potential 26%.
Full suite banking and improved deposit franchise.
Expects a 28% CAGR in deposits aiding 22% in loans.
Earnings trajectory likely to improve from H2FY25.
Rise in credit costs from 1.3% to 1.8% in FY27.
Strong earnings should drive rerating in valuations.

Citi On Vodafone Idea

Citi Research remains 'neutral' On Vodafone Idea
Should be a precursor to the balance equity raise planned from external sources (up to Rs 18,000 crore)
Press reports suggest that Vodafone Idea has commitments in place from anchor investors for Rs 8,000 crore
Also that the company may look at a follow-on public offering to raise money from the public.

Citi On Nykaa's Q4 Update

Citi reiterates 'sell' on FSN E-Commerce Ventures, with a target price of Rs 140.
The brokerage sees resilient BPC and resurging fashion, watch margins.
Management commentary suggests lower brand-funded discounts QoQ.
Higher ad-revenues year-on-year growth respectively.
Expect BPC contribution margins to improve 180 basis points QoQ to 25.6% of NSV, down 250 basis points year-on-year.
For Fashion, sustained improvement in contribution margins at 290bps QoQ to 8.9% is expected.
Overall revenue expected to grow at 28.5%.
Contribution profits at Rs 340 crore up 21% year-on-year, Ebitda at Rs 100 crore, margins at 6%; up 42% year-on-year.

Also Read: Nykaa Has Huge Lead, Edge; To Actively Defend Its Turf: Founder Falguni Nayar

Citi On Zomato

Citi maintains 'buy' on Zomato with a target price of Rs 220, a potential upside of 15% from the last regular trade.
Expect flattish QoQ trends in food delivery GOV at 28% YoY.
Quick Commerce to see 14% QoQ growth in GOV, margins to expand to 7-8% of GMV.
Dark Store Visit affirms Blinkit’s powerful product-market-fit.
Potential for Quick Commerce margins to match Food Delivery.
Quick Commerce estimates GOV raised by 8%/2%, CM and adjusted Ebitda margins by +100bps FY26E.
Remains Citi's top India Internet pick.

Also Read: SBI To Zomato: Jefferies Picks 11 Stocks For The Next Five Years

Jefferies On Bandhan Bank

Jefferies downgrades Bandhan Bank to 'underperform' from 'buy' with a target price of Rs 170. This implies a downside return potential of 14%.
Chandra Shekhar Ghosh to complete his term as CEP on July 9.
No word from RBI yet on re-appointment.
Business may see impact on both slower growth and higher credit cost.
Smooth succession to hold key as most senior management at the bank is new.
Lowering growth outlook at credit cost estimates for FY25-26.
Expects valuation overhang due to uncertainty.
Smoother and faster succession to be key to rating stance.

Citi On Chola Investment

Citi retains 'buy' on Chola Investment and Finance, with a target price of Rs 1,510.
Sustained growth momentum.
Key drivers have improved positioning.
New business constituted 23% of disbursements for 4Q and FY24.
Several levers including higher yielding business to support Net Interest Margin.
Collection efficiency at 130%, credit costs to settle below 1%.
Cost ratios expected to be elevated.

Citi On Godrej Consumer

Expects further upsides to stock price driven by industry leading volume/earnings growth.
Estimates organic revenue growth at 5%, largely impacted by the price cuts.
Estimates reported India business to grow 15%, largely volume-led.
Believes new molecule in the LV format to drive market share gains and accelerate revenue.
Estimates the Africa business revenue to decline double-digit in Indian rupee terms.
Forecasts 5% consolidated revenue growth year-on-year
Forecasts 16% year-on-year Ebitda growth and Ebitda margin at 22%
Recurring PAT estimate is Rs 520 crore, up 11% year-on-year

BofA On Nestle India

BofA reiterates 'neutral' rating on Nestle India Ltd. with a target price of Rs 2,700 apiece.
Nestle India set to hike its royalty to parent from 4.5% to 5.25%.
Earnings impact may be manageable.
Will have higher royalty vs peers.
Pricing growth tapers off, large growth headway.
For the fourth quarter, expects revenue, Ebitda and profit-after-tax growth at 6%, 12%, 13% year-on-year respectively.

Citi On Metals & Mining Sector

Likely to witness a sequential Ebitda contraction.
Expects India Ebitda to contract QoQ.
Coking-coal costs may be higher by $10–30 per tonne and iron prices higher QoQ.
Expects volumes to improve QoQ.
YoY trends may be more muted.
Opens a 90-day negative catalyst watch for JSPL.
Pricing upside appears limited on likely strong long products output in India on improved coal supplies.
Expects Ebitda margin of NMDC Ltd. at 39% vs 38% in Q3.
Non-ferrous: Range-bound Ebitda and cost expectations.
Coal India: Focus on e-auction trends and overburden-removal accounting.
Likely to be some tax implication as taxes levied in some states only.