Brokerage Views: Jefferies On BSE, Nuvama, Bernstein On ICICI Bank And More

Brokerages have their eye on BSE after the exchange ascertained that regulatory fees and interest worth nearly Rs 165 crore will have to be paid after the market regulator ordered the stock exchange to calculate fees based on annual turnover considering notional value for options contracts.

Brokerages also have ICICI Bank Ltd., IDFC First Bank Ltd., and SBI Cards and Payment Services Ltd. on their radars following the release of these companies' fourth-quarter earnings. Analysts are also tracking Maruti Suzuki Ltd. after the leading automaker released financial reports for the quarter and year ended March.

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

Jefferies On BSE

Jefferies downgrades BSE rating to 'hold' from 'buy', with a price target of Rs 2,900 apiece.
SEBI directs higher regulatory fees for derivatives on a notional turnover basis
Derivatives make up 40% of BSE FY25/26E PAT, sees overall 15-18% EPS hit
Expect price hikes to offset 2/3 of the impact immediately with BSE bringing prices on par with NSE
BSE's strong rev/earnings CAGR of 36%/61% in FY24-27E does not warrant a cut in multiple.

Investec On BSE

Investec rates 'Under Review' on BSE from 'buy' earlier, with a target price of Rs 2,800 apiece.
SEBI's directive to BSE to pay regulatory fees could impact profit before tax by 17-18% for FY25/26e.
BSE could offset the impact by taking price hikes.
The exchange could take a one-time provision of Rs 96.3 crore for FY24e.
The cumulative impact of past volumes from FY07-24 Rs 120 crore

IIFL On Exchanges

IIFL maintained 'buy' recommendation on BSE and MCX.
Target price cut to Rs 2,550 from Rs 3,100 earlier for BSE.
SEBI raised demand on BSE and MCX to calculate regulatory fees and pay the differential amount.
Amount insignificant for MCX; Rs 44 million for past reconciliation and 1-2% of EPS going ahead.

IIFL On BSE

IIFL expects 40-50% earnings cut.
Expects 30-40% cut in FY25/26e EPS on one-time cost of Rs 1.65 billion and recurring expense.
Estimates BSE would increase option tariff by 44% or by Rs 930 crore of premium turnover to offset impact.
Estimates cost to increase in FY26e to Rs 4.5 billion or 40% of FY26e PBT.
Expects stock to consolidate post correction; until visibility on new earning triggers improve.

HDFC Securities On BSE

HDFC Securities maintained 'buy' on BSE, with an unchanged target price of Rs 3,100.
Not changed earnings estimates; awaits more clarity.
Shift from premium to notional is a regulatory setback.
BSE will have to pay a regulatory fee of Rs 1/2.5/3.1 billion, which is 13/21/22% of FY24/25/26e APAT.
Assuming 25% rate hike and 10% lower clearing cost, impact could come down to -5/-2% for FY25/26e.
Expects a revenue/EPS CAGR of 34/42% over FY24-26e, led by a revival in transaction revenue.

Nuvama On ICICI Bank

Nuvama reiterates 'buy' on ICICI Bank with a target price of Rs 1,290 apiece.
In-line Q4 FY24 PAT—outperforming on NIM and opex, loan growth was a miss by 1%.
Early-mover advantage in leveraging technology.
Less vulnerable to regulatory lapses than peers.
Revising up FY25/26 EPS by 5%/6% with rollover of estimates

Also Read: ICICI Bank Q4 Results: Net Profit Up 17% As Provisions Fall Sharply

Bernstein Research On ICICI Bank

Bernstein Research rates ICICI Bank a 'market perform' with a target price of Rs 1,150 apiece.
Deposit growth of 20% a key positive
Return on assets comfortably above the large private sector peer average.
Healthy set of numbers with a healthy margin
Values ICICI at 2.7 times the FY25 price to book value.

Motilal Oswal On ICICI Bank

Motilal Oswal maintains 'buy' on ICICI Bank and raises target to Rs 1,300 apiece.
Q4 showed healthy performance, with deposit growth surprising positively.
Raises FY26 EPS estimates by 2%.
Estimates RoA/RoE of 2.26%/18% in FY26.
While pace of the NIM contraction has decelerated, persistent funding-cost pressure may keep margins low.
Expects 14% net profit CAGR in FY24–26.

Motilal Oswal On Maruti Suzuki India

Motilal Oswal reiterates 'buy' on Maruti Suzuki India Ltd. with a target price of Rs 14,700.
Operating performance was below estimates.
Free cash flow grew 175% in comparison to last year.
Marginally raises FY25–26 estimates by 2–4%.
Expects Maruti Suzuki to post a steady 13% earnings CAGR over FY24–26.
Favourable tax on hybrids may drive incremental re-rating.

Also Read: Maruti Suzuki Q4 Results: Profit Up 48%, Meets Estimates

HSBC On Maruti Suzuki Of India

HSBC Global Research maintains 'buy' on Maruti Suzuki India Ltd., with a target price of Rs 14,000 apiece.
Missed 4Q EBIT estimates (11.4% vs 12%), but it does not impact our FY25/26 expectations.
FY25 growth of 5-6% is expected to largely be driven by CNG and exports
A cut in taxes on hybrids is an upside risk.
Entire incremental volumes in FY25 is likely to come from CNG itself.
Growing CNG penetration and a gradual improvement in entry-level demand could contribute to MS.
Post-runup, the stock is likely range-bound in the near term.
Medium-term outlook remains positive.

Nomura On Marui Suzuki

Nomura retains a 'neutral' rating on Maruti Suzuki India Ltd. with a target price of Rs 12,523 apiece.
Market share may face risk in FY25-26F.
Discounts likely to rise from here on as inventory filled up
Margins were weak in light of tailwinds
Survey indicates signs of demand moderation with rising inventory and discounts
Factor in total volume growth of 5%/7% over FY25-26F
Market share is likely to come down to 40% by FY26F

Nuvama On IDFC First Bank

Nuvama retains 'hold' on IDFC First Bank with a target price of Rs 85 apiece.
Delivered in-line Q4FY24 PAT, beating expectations on fees; miss on provisions.
Cost to income stood elevated at 72.9%.
The CEO remains upbeat on growth, fees and improving branch productivity.
The NIM could also inch up with full repricing of legacy bonds.
Credit cost guidance of 1.65% in FY25 is higher than 1.2% in FY24.

Also Read: IDFC First Bank Q4 Results: Profit Up 10% On Higher Core Income

Motilal Oswal On IDFC First Bank

Motilal Oswal maintains 'neutral' on IDFC First Bank at Rs 88 target price.
Estimates 30% earnings CAGR over FY24–26.
Expects RoA/RoE to reach 1.3%/13.2% in FY26.
Outlook broadly stable despite 7-basis-point QoQ NIM contraction.
Improvement in operating leverage, steady loan growth to support the bank's underlying profitability.

Motilal Oswal On SBI Cards

Motilal Oswal maintains 'neutral' on SBI Cards at Rs 850 target price.
Management expects interest rate tightening, impact of risk weights to keep funding costs at 7%.
Key triggers: Reversal in rate cycle, improvement in revolver mix.
Cuts FY25/FY26 EPS by 7%/8%, factoring in NIM pressure and high credit costs.

Also Read: SBI Card Q4 Results: Profit Rises 11% On Higher Income

Nomura On SBI Cards

Nomura maintains 'reduce' on SBI Cards with a target price of Rs 640.
Q4 net profit up 11% YoY/ 21% QoQ, above estimate by 12%/15%.
Q4 NII growth 5% lower than brokerage estimates.
Asset quality woes continued as credit cost/write-offs inched up to 7.9%/6.9%.
Expects credit cost to remain elevated at 7.3% in FY25.
Lower recent card additions may negatively impact spending growth.
Profitability to remain under pressure in FY25.
Cut FY25/26 EPS estimates by 4%/1%.
Potential rate cut in the second half of the fiscal to be a catalyst for profitability improvement in FY26.

HSBC Global Research Of SBI Cards

HSBC downgrades SBI Cards to 'reduce' and cuts target price to Rs 650 apiece.
Brokerage sees multiple headwinds for SBI Card's earnings
Modest card issuance may impact growth, firm's market share to continue to decline
Believe NIM could compress further as funding costs remain high
Asset quality outlook remains uncertain post H1FY25 too
Recovery of such corporate spends to drive C/I ratio higher
Cut earnings per share estimates by 1.5-9.7% for FY25-27
Revise credit cost estimate to 7.6%/7.0%/6.4% for FY25/26/27

Citi Research On SBI Life Insurance

Citi Research maintains 'buy' on SBI Life Insurance with target price of Rs 1,950 apiece.
Citi's top pick; best positioned to benefit from industry tailwinds
SBI Life’s strong operating ROEV at 22% in FY2024E captures robust reserve releases
VNB margin at 28.3% in 4QFY24 within management’s stated range
Commentary on steady growth, product-level margins provide comfort
Expects stable margins over medium term
Channel diversification driving cost pangs can dent favourable mix change
Pickup in agency and non-core channels a positive lever for growth
Expect lagged impact of agent additions to drive volume accretion
Current valuation discount remains unwarranted

Motilal Oswal On Apollo Hospitals

Motilal Oswal maintains 'buy' on Apollo Hospitals Enterprise Ltd. at Rs 7,280 target price.
Deal establishes strong pharmacy franchise.
Expansion to not only increase scale but also boosts efficiency throughout the value chain.
Integration of Apollo Healthco and Keimed to drive synergies over the medium term.
Expects 48% earnings CAGR over FY24–26.

Kotak Institutional Equities On Indus Towers

Kotak Institutional Equities downgrades Indus Towers to 'reduce' and raises fair value to Rs 340 apiece.
VI's fundraise materially positive for Indus Towers
Raise FY25 Ebitda by 3%
Long-term outlook still dependent on Vi's long-term revival beyond FY27
Base care: Rs 1,800-2,000 crore bad debt provision from Vi over FY27-33
Believe stock is already pricing in Vi's revival benefits given recent run up
Brokerage no longer finds attractive risk reward

Kotak Institutional Equities On HCLTech

Kotak maintains 'add' on HCLTech with a target price of Rs 1,600 apiece.
Guidance missed the mark due to muted deal wins
The deal pipeline is healthy with mega deal wins
The research firm incorporates weaker than expected discretionary spending environment
Strong outperformance versus peers will moderate returns hereon.

Goldman Sachs On HCLTech

Goldman Sachs maintained 'neutral' on HCLTech, with a target price of Rs 1,370 per share from Rs 1,440 earlier. This implies a downside of 7%.
FY25 guidance below expectations.
HCLTech is the only company where it expects FY25 to be similar to FY24. For rest, it expects improvement.
Overall discretionary environment remains weak.
HCLTech was the only company in its coverage to add headcount.
HCLTech's valuation are at a premium to its own history.
The key takeaway is that near-term demand continues to be weak.

JPMorgan On HCLTech

JPMorgan maintained 'neutral' rating on HCLTech, with a target price Rs 1,470.
Ebit guidance pushed out medium term target of 19-20%.
The company called out a 2% quarter-on-quarter decline in Q1 from specific large deal contours, followed by State Street ramp down in Q2.
This makes second-half more heavy than usual.
Although HCL benefits from a non-discretionary heavy portfolio, it is unlikely to enjoy tailwinds from BFS recovery.