A host of global and domestic brokerages have released fresh views on PB Fintech Ltd., Asian Paints Ltd., InterGlobe Aviation Ltd., Indraprastha Gas Ltd., HDB Financial Services Ltd., and more ahead of Wednesday's trading session.
They have also shared their outlook on the insurance sector.
BofA Global Fund Manager Survey
Most bullish Fund Manager Survey of past three and a half years
Macro optimism highest since Aug 2021 on “run-it-hot” belief
Allocation to stocks and commodities highest since Feb 2022, cash level at record-low 3.3%
December Fund Manager Survey pushes BofA Bull & Bear Indicator up to 7.9, v close to “sell signal”
Bullish positioning remains biggest headwind for risk assets
UBS On Asian Paints
Maintain ‘neutral’ rating with a target price of Rs 3,200 per share
Store visits and interaction with dealers corroborate that Asian Paints has significantly upped its game and its engagement with the dealers
Volume growth of high single digits/double digit is likely to continue in Q3 as well
This is a significant turnaround considering the overall demand environment remains still tepid
Expect Q3 EBITDA growth of 6% and PAT growth of 10%
Goldman Sachs On Avenue Supermarts
Maintain ‘sell’ rating with a target price of Rs 3,425 per share
Earnings downgrade cycle continues while valuations remain elevated
Store addition running below expectations, increasing risk for missing estimates
Heightened quick commerce competition expected in H2
Brokerages On PB Fintech
Investec
Maintain ‘buy’ rating with a target price of Rs 2,300 per share
Insurance Amendment Bill, 2025 empowers IRDAI to set caps commissions
IRDAI is mulling a shift to a deferred commission structure instead of the current upfront commission structure
IRDAI is also exploring an overall cap on insurance commissions
Commission caps should not necessarily be detrimental for PB
Putting a cap will not necessarily impact the take rates
The actual impact will depend on the level at which the new caps are set
Deferment of commission is long term positive; near term pain
Citi
Maintain ‘buy’ rating with a target price of Rs 2,225 per share
Street remains concerned on PB’s yields
Recent concerns stem from prospects in Insurance Amendment Bill
Regulator will have vested authority set limits on commission
Street is likely factoring a scenario of rebound of current EOM regulations to the previous regime
See low possibility of the regulator backtracking on current framework of democratised commission structure
Disincentivising distributors with high growth or superior operational capability is against regulator’s objective of driving penetration
UBS
Maintain ‘sell’ rating with a target price of Rs 1,660 per share
Insurance Amendment Bill seeks to specify limits on commission – negative for PB Fintech
For every 1% reduction in unit economics, it can 3-4% impact on earnings
Brokerages On IndiGo
Goldman Sachs
Maintain ‘buy’ rating; cut target price to Rs 5,600 per share from Rs 5,700
Incorporate impact of the 10% capacity cut for the winter schedule
IndiGo issuing vouchers to affected passengers and incremental information on matching pilots with new capacity
Impact on FY27E/28E is not significant
Remain positive on Indigo given its dominant position, its lowest cost structure, highest visibility on supply addition
Investec
Maintain ‘sell’ rating with a target price of Rs 4,050 per share
Regulatory action could cap growth
Rising cost pressures cloud margin outlook
Government oversight adds a new overhang
Valuation remains elevated relative to industry cyclicality
Nomura On Indraprastha Gas
Upgrade to ‘buy’ from ‘neutral’; hike target price to Rs 230 from Rs 215
Margins to get support from lower tax and transmission tariffs
DTC transition nearing end to aid volume growth
Demand trend could recover as DTC transition is near-completion
Risk reward turns favourable post sharp correction
Brokerages On Insurance
Morgan Stanley
IRDAI's enhanced powers over investments, commissions, and expenses were welcomed
This enables stronger governance, more transparency, and sustainable growth
Enabling provision for a merger between an insurer and a non-insurer was also welcomed
Industry has varied views from commissions being not so high to support for transition to commission deferral
Insurance industry sees potential benefits from the removal of certain investment regulations
Bill also empowers the IRDAI to frame regulations on composite license
Kotak
Insurance Act—limited proposals, no immediate impact
Amendment increases FDI in the insurance sector to 100%
New foreign majors and niche players may enter the space
Find limited impact on the life insurance business given the long gestation periods and challenges in distribution for new players
Proposal on commission caps likely put pressure on PB Fintech’s stock
IRDA may anyway have leeway to fix the cap, and this clause just reinforces the same
The regulator may independently reevaluate expenses and payout structure from time to time
Kotak Securities On Sona BLW
Maintain ‘reduce’; cut target price to Rs 480 from Rs 500
Recently interacted with management
Recovery in the differential assembly business expected from CY2026E onwards
Traction motors and railway segments to be leading growth drivers
Uptick in differential gear business led by EUR300 mn opportunity in the EU
See minimal impact from Mexico tariffs
Jefferies On HDB Financial Services
Maintain ‘buy’ rating with a target price of Rs 900 per share
Growth improving and asset quality stabilising
Mgmt stated growth has improved post GST cuts, but it's early to conclude around sustainability
Mgmt expects AUM to grow at 18-20% CAGR over next 3 years with NIMs likely to stay range bound
Stress in unsecured BL has stabilised and in CVs, forward flows is moderating
Credit cost has peaked (2.7% Q2) & can moderate to 2-2.2%
This should lift ROA/ROE to 2.5%/16-17% in next 3 years
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