JPMorgan rates Adani Wilmar 'underweight' after the Adani group announced it will exit the FMCG company. Morgan Stanley shares its take on the year that was, for the Indian markets.
Citi reiterates 90-day catalyst watch on Indus Towers, and JSW Energy is Motilal Oswal's preferred pick in the power and utilities sector. Nomura is also bullish on the aforementioned stock.
NDTV Profit tracks what the brokerages are putting out on stocks and sectors. Here are the top calls from analysts you need to know about on Tuesday:
Nuvama On Jindal Steel & Power
Maintains 'buy' on Jindal Steel & Power, hikes target price to Rs 1,292 from Rs 1,139 earlier, implying a 40% upside.
Q3 earnings to be stable amid below industry expected demand.
Q4 to improve amid govt efforts, higher steel prices, volumes.
Pellet plant bottlenecks hurting volumes, fix expected by Jan. 2025.
Higher pellet plant utilisation to ramp up steel production to 8.3–8.4 MT in fiscal 2026.
6 MTPA pellet plant key to volume growth from new 3.3 MTPA steel capacity.
JSPL expected to see 26% volume compound annual growth rate over next two fiscals to 12.4 MT.
Volume growth drivers: Existing capacity ramp-up, new commissioning.
Jefferies On Auto
Expect wholesales to decline month-on-month across most original equipment manufacturers.
Wholesale growth expectations on a year-on-year basis:
17-22% for Maruti Suzuki and Mahindra & Mahindra.
10-11% for Bajaj Auto, TVS, Eicher Motors-Royal Enfield.
Flattish for Hero Motocorp, Ashok Leyland.
2% fall for Tato Motors.
Preferred Picks: Mahindra & Mahindra, TVS, Eicher.
Motilal Oswal On JSW Energy
Co is preferred power utility pick.
Maintain 'buy' rating at Rs 816 target price per share, implying a 27% upside potential.
Co set to raise installed capacity to 20 GW by fiscal 2028's end as versus the 2030 target.
Strong experience of operating wind assets key to win growing firm and dispatchable renewable energy bids.
Co has secured PPAs for 66% of its renewable pipeline despite industry delays.
Valuation premium seems well-deserved in light of recent IPOs.
KSK Mahanadi acquisition could unlock value of Rs 60 per share, while O2 Power acquisition could unlock value of Rs 57 per share.
JPMorgan On Adani Wilmar
Rate 'underweight' with a target price of Rs 320, indicating a 5% upside potential from the current market price of 304.20 as of 09:55 a.m.
Adani Enterprises to fully exit the JV, Wilmar to increase ownership to 75%.
Option price to be mutually agreed upon by the parties, subject to maximum price of Rs 305.
Wilmar would acquire stake for Rs 12,300 crore.
Morgan Stanley On The Year That Was
Sensex made a new high in eight out of 12 months in 2024.
Midcap and Smallcap indices outperformed the Sensex.
Seven out of 10 sectors delivered positive returns in 2024.
FPIs bought just $14 billion in the equity markets, versus net buying of $21 billion in 2023.
Domestic institutions bought stocks worth $60 billion.
SIP flows rising to $3 billion per month in the last quarter of 2024.
Market volatility rose from multiyear lows.
MSCI India's valuations have risen year-on-year on an absolute basis.
Equity issuances rose sharply in 2024 to 0.8% of market cap, vs. 0.5% in 2023.
Rupee depreciated 2.7% as compared to the dollar, and appreciated 3.2% versus the euro.
Citi On Vodafone Idea
Maintain 'buy' with a target price of Rs 13, indicating a potential 74% upside.
Government has finally approved a waiver for the requirement of bank guarantees.
This was for spectrum acquired in past auctions.
Any progress on Voda Idea's debt funding will be a key monitorable going forward.
Citi On Indus Towers
Reiterate 90-day Positive Catalyst Watch.
This is on the back of:
Improved visibility of dividend reinstatement in the last two quarters of this fiscal.
Upcoming pickup in tenancies from Voda Idea starting in the third quarter.
Declining capex aiding FCF generation.
It is currently trading at 6%-8% dividend yield.
Nomura On Autos: Dec Volume Preview
Expect passenger vehicle wholesales at 3,04,000 units, indicating a 6% upside potential year-on-year.
Two-wheeler industry wholesales likely to be up 2% year-on-year.
Medium and heavy commercial vehicle wholesales likely to be down 2% year-on-year.
For tractors, expect wholesales to be up 11% year-on-year.
Don't expect any margin pressure from commodities for OEMs in year-on-year.
HSBC On Power
Power demand growth turned positive in Nov-Dec after declining annually in Aug-Oct.
India's 11 month power demand so far normalised at 4.9%.
Energy storage is becoming even more essential in the sector.
2.3GW of renewable capacity added in Nov, 28 GW in the 11 months this year.
No thermal capacity commissioned since Feb. 2024, multiple plants near completion.
Motilal Oswal On IT Preview
Expect seasonal furloughs to weigh on growth for the sector in the third quarter.
Macro uncertainty is gradually easing.
Expect outlook for technology spending to improve in the next calendar year.
Initial phase of recovery in the first half of the fiscal was sluggish, but now see clear signs of an acceleration.
Expect tier-2 companies to continue to outpace tier-1 firms in growth in this quarter.
Nomura On JSW Energy
Maintain 'buy' rating with a target price of Rs 885, implying a 38% potential upside.
Co signs definitive agreement to acquire O2 Power for Rs 12,500.
Portfolio consists of an overall locked-in capacity of 4.7 GW of renewable energy.
Acquisition at attractive valuations of 7.1x and 8.3x enterprise value by Ebitda ratio.
Blended tariff for the portfolio of 4.7GW is Rs 3.37 per unit, above industry average.
Expect the co to derive an equity internal rate of return of 17%.
Disclaimer: NDTV is a subsidiary of AMG Media Networks Limited, an Adani Group Company.
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