UBS initiated coverage on DLF Ltd., Oberoi Realty Ltd., and Prestige Estates Projects Ltd., and Nuvama also shares its outlook on the space.
Motilal Oswal continues to remain bullish on NMDC Ltd. as it expects 20% year-on-year growth in the rest of the fiscal. HSBC retains its 'buy' call on Aster DM Healthcare Ltd., while Emkay has the same outlook on Pricol Ltd.
NDTV Profit tracks what the brokerages are putting out on stocks and sectors. Here are all the top calls from analysts you need to know about on Tuesday.
Motilal Oswal continues to remain bullish on NMDC Ltd. as it expects 20% year-on-year growth in the rest of the fiscal. HSBC retains its 'buy' call on Aster DM Healthcare Ltd., while Emkay has the same outlook on Pricol Ltd.
NDTV Profit tracks what the brokerages are putting out on stocks and sectors. Here are all the top calls from analysts you need to know about on Tuesday.
Motilal Oswal On NMDC
Motilal Oswal maintains a 'buy' rating on NMDC with a target price of Rs 280, implying a 21% upside.
Expects 20% year-on-year volume growth in the second half of fiscal 2025 due to an increase in the company's environmental clearance limit.
Net sales realisation in the second half of fiscal 2025 is expected to remain firm, driven by price hikes in October.
Revenue, Ebitda, and net profit are projected to grow by 29%, 24%, and 18% year-on-year, respectively, in the second half.
The company's planned capital expenditure aims to improve the product mix and increase production capacity to 100 million tonnes by the financial year 2029-2030.
Key risks include increasing competition and heavy reliance on a few customers.
HSBC On Aster DM Healthcare
Retained 'buy' rating and unchanged target price of Rs 550, implying a 10% upside.
The merger is expected to enhance scale and market presence.
Strong earnings prospects are anticipated from growth in the mother & child care and oncology segments.
Look for better clarity on the definite merger synergies.
Key Risks:
Failure to scale up in newer markets.
Slowdown in the core Kerala cluster.
Regulatory risks.
HSBC On Equity Strategy
Tariffs and a strong USD are downside risks.
The risk/reward for emerging markets is better than widely perceived.
Two Indian stocks are included in the GEMs Best Stock Ideas:
1. Axis Bank:
'Buy' rating, target price of Rs 1,350, implying a 19% upside.
Indian banks are the largest sector in the listed universe.
Axis Bank is set to benefit from growing capital expenditure and infrastructure in India.
The bank has taken necessary steps to protect profitability.
Asset quality has improved, and loan slippage has moderated.
There is scope for Axis Bank to reduce costs.
2. InterGlobe Aviation:
'Buy' rating, target price of Rs 4,940, implying a 12% upside.
The company is expected to benefit the most from strong competitive positioning.
Strong penetration in the corporate traffic segment.
Unit cost is almost 40-45% lower than its peers.
InterGlobe has a strong balance sheet.
The discount to its long-term valuation is unjustified.
Expect investor sentiment to turn positive on the stock.
Emkay On Pricol
Emkay retains a 'buy' rating on Pricol with a target price of Rs 600, implying a 21% upside.
Pricol has entered into an agreement to acquire the plastic injection molding business of Sundaram Auto Components.
The acquisition was made at Rs 215 crore in an all-cash deal.
SAC reported FY24 revenue of Rs 730 crore with profits of Rs 19 crore.
Valuations for the acquisition are attractive at 8x FY24 P/E.
The products cater to interior and exterior plastic parts for two-wheelers, passenger vehicles, and commercial vehicles.
The acquisition enables Pricol to scale up its existing molding operations as an independent vertical.
The acquisition could lead to a potential 6% earnings upgrade, which is not currently built into the numbers.
JPMorgan On KPIT Technologies
Remain overweight on KPIT with a target price of Rs 1900, implying a 42% upside.
The stock has declined by 18% since October due to a cut in guidance for fiscal year 2025 and a Qualified Institutional Placement.
The guidance cut is attributed to a slowdown in decision-making, which is expected to be transient.
Original Equipment Manufacturers are unlikely to shift back to Internal Combustion Engines.
Funds raised from the QIP will be used for multiple tuck-in mergers and acquisitions.
The stock is currently trading at 41 times the one-year forward Price-to-Earnings ratio, presenting a good entry point.
The base case suggests a 42% upside, while the bear case sees a 10% downside.
UBS Initiates Coverage On Property
UBS initiates coverage on India property with a Buy rating on DLF, and target price of Rs 1,005, implying a 22.1% upside.
Buy rating also initiated on Prestige Estates with target price Rs 2,175, implying a 32.6% upside.
Neutral rating initiated on Oberoi Realty, with target price of Rs 2,230, implying an 11.4% upside.
Despite recent stock rallies, UBS believes tailwinds will continue to drive earnings growth and re-rating.
UBS expects any dips in the stock price to be buying opportunities due to near-term softness.
The sector is considered to be in a sweet spot, with the ongoing cycle expected to sustain for 3-5 years.
Key factors driving the positive outlook include the lowest-ever inventory overhang, turning interest rate cycle, low developer leverage, and increased consolidation among developers.
Nuvama On Hot Property—October Trends
Nuvama's report on the hot property trends for October 2024 highlights that launches have increased by value, but volumes remain soft.
Supply and demand volumes in the top-7 cities decreased by 14% and 7% year-on-year.
Supply and demand value surged by 35% year-on-year and 17% year-on-year, respectively.
Absorption increased in NCR but declined in Bengaluru and Hyderabad.
Unsold inventory by value rose 9% year-on-year, but inventory months declined marginally.
Nuvama believes realty stocks are attractive from a medium-term perspective based on valuations.
Top Picks: Prestige Estates and Brigade.
BofA On Banking Stocks
Bank of America has 'Buy' on Axis Bank and ICICI Bank as defensive picks.
It has 'Underperform' on AU Small Finance Bank and IDFC First Bank.
Buy rating also given to Bank of Baroda and Union Bank, with a focus on defensive growth and asset quality.
Key takeaway from calls and channel checks: expect more Earnings Per Share cuts.
The banking system is currently in a credit tightening cycle.
The key focus is on asset quality in microfinance institutions, with normalisation expected in 2-3 quarters.
Nuvama On Retail
Nuvama's outlook on retail highlights the top picks across the sector: V-Mart, Trent, Titan, and Aditya Vision.
The apparel sector saw a strong rebound in the second quarter of the fiscal, driven by Page Industries and Manyavar.
Online-heavy players like Campus and Arvind Fashion continued to perform well.
Nuvama suspects that the strong traction is fueled by brands joining the Quick Commerce trend, such as Page and Manyavar.
The Quick Service Restaurant sector, however, struggled due to weak consumer sentiment.
The footwear sector anticipates a strong second half, boosted by the festive and wedding seasons.
Jewellery remains the top-performing sector.
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