HDFC Life Insurance Co., ICICI Lombard GIC, ICICI Prudential Life Insurance Co. were among the top companies on brokerages' radar on Wednesday.
Analysts have shared their views on HDFC Life, ICICI Lombard, and ICICI Prudential Life's June quarter earnings.
Motilal Oswal has initiated a 'buy' on Vishal Mega Mart Ltd. and Bernstein on Aditya Birla Lifestyle Ltd.
NDTV Profit tracked analysts' views on various stocks and sectors. Here are the analyst calls to keep an eye out for today.
Brokerages On HDFC Life Q1 Results
Macquarie
Maintain 'Underperform' with a target price of Rs 720.
The quarter was in-line, with Value of New Business (VNB) growth also in-line with expectations.
Unit-Linked Insurance Plans (ULIP) and Participating (PAR) products are driving Annualized Premium Equivalent (APE) growth, while VNB margin remained flat year-over-year.
Valuations are considered expensive, and a regulatory overhang remains a concern.
Citi
Maintain 'Buy' and hike target price to Rs 975 from Rs 935.
The company reported a steady quarter, showcasing a diversified and agile business model.
Margin increases were observed across various products.
The distribution franchise is actively being scaled up.
The business's agility warrants a premium valuation.
Brokerages On ICICI Prudential Life Q1 Results
Morgan Stanley
Maintain 'Equal-weight' with a target price of Rs 625.
The outlook is muted despite attractive headline valuations.
Negatives include a muted Annualized Premium Equivalent (APE) growth outlook, weak persistency, an unusually sharp decline in annuity APE, and product-level margin compression
The following positives were observed: strong growth in protection and effective cost control.
The Value of New Business (VNB) forecast remains unchanged and is below consensus expectations.
Citi
Maintain 'Buy' and hike target price to Rs 850 from Rs 800.
Non-linked savings and protection segments are performing well.
Annualized Premium Equivalent (APE) growth is expected to revive, alongside scaling up of the agency channel.
Persistency rates are not considered too worrisome.
A re-rating of the stock is likely.
Brokerages On ICICI Lombard Q1 Results
Macquarie
Maintain 'Outperform' with a target price of Rs 2,255.
Combined Ratio (COR) remains stable, although growth is muted.
In Q1, higher investment income was the primary driver for a beat on net profit.
COR trends continue to outperform the overall industry.
ICICI Lombard has the potential to deliver sustainable improvement in underwriting profitability.
Morgan Stanley
Maintain 'Equal-weight' with a target price of Rs 1,855.
Net profit beat both estimates and consensus, driven by higher investment income from elevated capital gains.
We appreciate the focus on profitable growth.
However, we see limited upside from the current 36x F26 Price/Earnings (P/E) ratio amidst weak top-line growth.
There is sustained competitive intensity and uncertainty regarding a motor third-party hike.
Bernstein On Aditya Birla Lifestyle Brands
Initiate 'Market-Perform' with a target price of Rs 170.
The company is resetting its growth agenda with strong brands and new investments.
Lifestyle brands operate in a well-penetrated category, which constrains their growth potential.
Emerging brands are in industry segments offering tailwinds, but they have struggled to grow against larger competitors.
Expect to deliver approximately 9.5% growth over FY25-30.
Bullish on a strong legacy brand portfolio and capital and management focus on growth.
Bearish as the legacy business is swimming against the tide in a slow-moving category. Emerging categories need to establish a right to win against larger, more established competitors.
MOSL On Vishal Mega Mart
Initiate 'Buy' with a target price of Rs 165.
The company is positioned as a play on the rising aspirations in Tier 2+ India.
It is described as a one-of-a-kind retailer addressing a significant Rs 70 trillion market opportunity.
Healthy store economics provide ample room for accelerated store expansions.
A well-diversified portfolio enhances the total addressable market and increases the share of wallet.
The multi-category, own-brand portfolio acts as a strong moat.
It is identified as the lowest-cost retailer with significant potential to improve revenue productivity.
Macquarie On HDFC Bank
Maintain 'Outperform' with a target price of Rs 2,400.
HDB's first quarter after listing showed a weak performance.
The only saving grace was that margins expanded 10 basis points (bps) quarter-on-quarter, primarily due to better asset yields.
The full impact of the Reserve Bank of India's cut in the repo rate on the cost of funds is yet to be felt in margins.
There are implications for other Non-Banking Financial Companies (NBFCs) due to the weak vehicle finance performance.
JPMorgan On AWL Agri Business
Maintain 'Underweight' with a target price of Rs 260.
Earnings lagged expectations during a slow quarter.
In the edible oil segment, muted volume growth was primarily weighed down by palm oil.
For the Food and FMCG segment, the focus will be on reviving revenue growth, even as margins may moderate sequentially.
CLSA On Dixon Tech
Maintain 'High Conviction Outperform' with a target price of Rs 19,000.
The company's growth engines are revving up.
Significant steps are being taken to increase backward integration in smartphone manufacturing.
Recent acquisitions and joint ventures could potentially raise Dixon’s value addition in smartphones to 45-55% from the current 15-17%.
These strategic moves are expected to increase margins by 150-200 basis points and provide an additional revenue stream.
Even if Dixon’s market share saturates in the domestic smartphone market, it is still projected to post strong bottom-line growth.
Morgan Stanley On Oberoi Realty
Maintain 'Equal-weight' with a target price of Rs 1,700.
The acquisition of high-margin prime land is noted, but it is expected to have a low impact on Net Asset Value (NAV).
Gross margin of 55% is estimated, inclusive of land and construction, which aligns with historical margins.
The earliest potential launch for this development is projected for FY28.
Oberoi is currently evaluating other acquisitions, including the Versova parcel.
Brokerages On Tesla Launch
Citi
Tesla arrives in India with the Model Y priced at Rs 5.99-6.79 million.
At the current price point, don’t think that there would be much shift of potential Mahindra XEV 9E customers.
The products vary significantly and target customer segments also do not overlap.
If duties are reduced or if local manufacturing starts, competition could escalate for the Indian OEMs.
MS
Tesla in India, limited impact on domestic OEMs.
Total addressable market is limited – the market for cars priced above Rs 50 lakh stands at around 50,000 units (i.e., around 1% of the total market)
ASPs for select segments such as EVs are rising but are still below Rs 30 lakh.
Domestic OEMs have no exposure to the Rs 50 lakh segment.
With Tesla's high ASP and gradual ramp-up, we see limited impact on domestic OEMs.
Bernstein
Tesla is clearly focusing on building brand and not mainstream volumes.
This means limited immediate impact on local automakers like Mahindra, Maruti or Tata.
At 0-2% duty, Tesla’s lowest-range EVs would still be over 30% expensive than Mahindra’s top-end EVs.
The situation could change in the medium term as Tesla is working on a sub-$25,000 affordable EV.
Macquarie
Tesla's entry price does not pose volume risk for M&M and Tata Motors, given price differential.
Tesla's pricing strategy, ramp-up of its distribution network and India's auto policy are key variables to track.
Reiterate M&M and TVS as our top picks in India Auto.
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