Stock Picks Today: ITC, Devyani International, Dr Reddy's And More On Brokerages’ Radar

A host of global and domestic brokerages have released fresh views on ITC, Devyani International Limited, Dr Reddy's Laboratories, and more ahead of Friday's session.

They have also shared their outlook on capital goods, pharma, alongside broader their macro India strategy.

Nuvama on ITC

• Nuvama downgrades ITC to Hold from Buy and cuts the target price to Rs 415 from Rs 534.

• The brokerage flags a tough outlook for the cigarette industry.

• The expected tax hike on cigarettes appears sharper than anticipated.

• This is likely to prompt consensus downgrades to cigarette volume, EBITDA estimates, and valuation multiples.

• Pending clarity, Nuvama factors in a price hike of over 20% and a tax hike of over 30%.

• EBITDA estimates for FY27 and FY28 are cut by 7% each.

DAM Capital on ITC

• DAM Capital maintains a Buy rating and cuts the target price to Rs 440 from Rs 500.

• A steep excise hike is expected to dent high-end cigarette volumes.

• Sharp price hikes are likely to lead to volume de-growth.

• The brokerage expects increased down-trading to lower-priced cigarette categories.

• Significant trade and retail stocking is anticipated in January 2026.

• The adverse volume impact is likely to become visible from Q1FY27.

• DAM Capital builds in a 7% volume de-growth for FY27, largely for KSFT.

• Price hikes of around 28% are expected across categories.

• EPS estimates are cut by 8% and 9% for FY27 and FY28 respectively.

• The brokerage believes most negatives are already reflected in the stock price.

• Any relief in the Budget, including possible NCCD removal, could act as a positive trigger.

PhillipCapital on ITC

• PhillipCapital downgrades ITC to Reduce from Buy and cuts the target price to Rs 348 from Rs 528.

• The brokerage says cigarette excise hikes open a “Pandora’s box”.

• It estimates a 23–50% price hike across cigarette categories post the new excise rates.

• Cigarette volumes are expected to decline 12.5% in FY27, followed by 2.5% growth in FY28.

• Product mix is likely to deteriorate due to down-trading from RSFT to sub-64mm cigarettes.

• Despite FMCG and Paperboard profitability improving, ITC’s EPS CAGR is now expected at just 4.5% over FY26–28.

Macquarie on ITC

• Macquarie maintains an Outperform rating with a target price of Rs 500.

• Excise duty on filter cigarettes has been raised to Rs 2,100–8,500 per thousand sticks, depending on length.

• The tax increase is steepest for longer cigarettes.

• Cigarettes under 65mm face a relatively modest hike.

• Maintaining EBIT per stick requires a price increase of 10–35% across categories.

• Macquarie awaits clarity on whether NCCD will be subsumed into the excise duty.

• Moderating leaf tobacco costs could offer some margin cushion.

• However, the tax hike raises concerns over near-term growth.

Emkay on ITC

• Emkay downgrades ITC to Reduce from Add and cuts the target price to Rs 350 from Rs 475.

• The brokerage describes the tax hike as a fiscal bombshell.

• Cigarette excise hikes are expected to hurt industry volumes and ITC’s earnings.

• The regulatory stance has shifted from rationalisation to consumption curbs.

• Emkay expects portfolio-wide price hikes of around 32% in a staggered manner.

B&K Securities on ITC

• B&K Securities maintains a Buy rating and cuts the target price to Rs 504 from Rs 567.

• Cigarette volume growth is clouded by the sharp proposed tax hike.

• Tax rates have increased by 20–65%, far above expectations of 10–15%.

• The brokerage now factors in a 5% volume decline for FY27.

• Average price increases of around 25% are assumed.

Motilal Oswal on ITC

• Motilal Oswal downgrades ITC to Neutral from Buy and cuts the target price to Rs 400 from Rs 515.

• The brokerage flags an unprecedented tax hike.

• Valuation multiples are expected to reset.

• The favourable phase for the legal cigarette industry is seen as over.

• Cigarette valuations may revert to historical multiples under a high-tax regime.

Antique on ITC

• Antique maintains a Buy rating and cuts the target price to Rs 445 from Rs 500.

• The brokerage views the tax hike as a transient near-term pain.

• It believes companies were broadly prepared, given prior focus on higher price points.

• The event is seen as a near-term headwind for the industry.

• Antique remains positive on the medium-to-long-term outlook.

• FY27–28 EBITDA estimates for ITC are cut by 9–11%.

JPMorgan on ITC

• JPMorgan downgrades ITC to Neutral from Overweight and cuts the target price to Rs 375 from Rs 475.

• The downgrade follows a sharp increase in cigarette taxes.

• The brokerage awaits clarity on finer details of the tax structure.

• Early estimates suggest a weighted average price hike of over 25% if NCCD is removed.

• If NCCD remains, required price hikes could exceed 35%.

• JPMorgan sees increased risk of consumer down-trading to cheaper variants.

• Illicit cigarette consumption could also rise.

• ITC is expected to pass on most of the tax impact.

• This would weigh on volume growth, earnings, and valuation multiples.

• Stock upside is expected to remain limited over the next 6–9 months.

Antique on Devyani International

• Antique maintains a Hold rating with a target price of Rs 142.

• The merger is expected to unlock synergies.

• KFC remains the primary profit driver.

• Pizza Hut revival could materialise sooner than expected.

• The non-Yum portfolio offers an additional growth lever.

• Antique estimates a target price of Rs 151 for the merged entity.

Emkay on Devyani International

• Emkay maintains a Buy rating with a target price of Rs 190.

• Merger and brand negotiations are expected to deliver sizable scale and synergies.

• The combined entity will have similar scale and growth prospects as Jubilant FoodWorks.

• The swap ratio is largely in line with current market prices.

• Shareholders of both companies are expected to benefit equally from synergies.

• Estimated cost savings are significant at around 15% of combined EBITDA.

• JPMorgan maintains an Underweight rating with a target price of Rs 1,170.

• Regulatory setbacks continue for the company.

• The latest setback does not impact near-term earnings.

• However, it delays Dr Reddy’s entry into the US biosimilars market.

• This also delays the opportunity to build commercial experience in biosimilars.

• Jefferies maintains a constructive stance on the capital goods sector.

• Hitachi Energy is rated Buy with a target price of Rs 25,000.

• Siemens Energy is rated Buy with a target price cut to Rs 3,700 from Rs 4,000.

• Hindustan Aeronautics (HAL) is rated Buy with a target price of Rs 6,220.

• L&T is rated Buy with a target price of Rs 4,715.

• KEI Industries is rated Buy with a target price hike to Rs 5,460 from Rs 4,855.

• Siemens is rated Buy with a target price of Rs 3,800.

• CG Power is rated Hold with a target price cut to Rs 725 from Rs 745.

• Jefferies expects infra and industrial capex CAGR of 10% over FY26–29 versus 6% over FY24–26.

• Power T&D and defence capex are expected to remain strong.

• Top picks are Siemens Energy, HAL, Hitachi Energy, L&T, and KEI.

• Siemens Energy is expected to deliver ~40% EPS CAGR over FY25–28, driven by operating leverage and a robust power capex pipeline.

• HAL offers five-year growth visibility with ~19% EPS CAGR driven by indigenisation.

• Hitachi Energy’s strong order book execution is expected to drive operating leverage and ~71% EPS CAGR over FY25–28.

• L&T’s strong visibility and conservative guidance could drive upside.

• KEI is seen as a holistic play on power, capex, housing, and exports.

• Morgan Stanley expects earnings to beat expectations and the RBI to continue deregulation.

• The brokerage sees scope for further government reforms and a potential US trade deal.

• It remains overweight on lenders and discretionary consumption.

• India ended 2025 with its worst relative performance versus EM since 1994.

• Relative valuations have corrected meaningfully and may have troughed in October.

• Morgan Stanley expects a positive growth surprise in the coming months.

• Improving India–China relations and China’s anti-involution drive could add support.

• India’s hawkish post-Covid macro stance is now unwinding.

• Jefferies notes Zydus remains confident of growing US revenues in FY27 despite a high FY26 base.

• Zydus is increasing its focus on scaling specialty assets.

• Emcure is well placed to deliver low double-digit revenue growth with EBITDA margin expansion.

• Piramal expressed confidence on demand recovery for a destocked on-patent product.

• For Piramal, the key uncertainty remains the timing of orders.

• Entero maintained guidance of 30% revenue growth in FY26 with EBITDA margins of over 4%.

• Kotak Securities initiates coverage with a Buy rating and a target price of Rs 600.

• Smartworks is India’s largest flexible workspace operator with 10.3 million sq. ft. of leased area.

• Adjusted EBITDA is expected to grow at a CAGR of 38% over the next three years.

• Growth will be aided by expansion in leased area.

• Flexible workspace operators remain among the largest takers of new office supply.

• Key risks include inability to maintain occupancy levels and challenges in sourcing new real estate.

• Citi’s optimism for 2026 hinges on a recovery in financial sector earnings.

• This is expected to be driven by bottoming NIMs and faster credit growth.

• Consumer outlook is improving, aided by strong rural demand and urban policy stimulus.

• This is partly offset by continued pressure on export-oriented sectors such as IT services and healthcare.

• Citi’s key India overweights include Banks, Telecom, Autos, Healthcare, and Defence.

• The brokerage sets a December 2026 Nifty target of 28,500, implying 10% upside.