Emkay is bullish on the auto sector, retaining and upgrading 'buy' calls on companies like TVS Motor and Bajaj Auto. Citi is positive on UltraTech Cement, post their investment in Star Cement.
Nomura claims that the third quarter's demand is weaker than expected, and operating margin is under pressure too. Macquarie shares top picks in the IT sector.
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 Wednesday:
Emkay On Autos
Upgrade TVS to 'buy' from 'add' with revised target price of Rs 2,800, indicating an upside of 18%.
Upgrade Bajaj Auto to 'add' from 'sell' with unchanged target price of Rs 9,500, thereby implying potential upside of 8%.
Retain 'buy' on Hero with target price of Rs 5,600, indicating upside potential of 35%.
Retain 'buy' on Eicher with target price of Rs 5,600, implying upside potential of 16%.
Timely revival in exports as domestic slows.
Steep correction in two-wheeler stocks seems unwarranted despite sales slowdown.
Sales growth during Sep-Dec at 8% versus 12.6% during Apr-Aug doesn't justify 24% correction.
Outlook on exports is improving and poised for sharp recovery.
Believe exports would drive growth momentum in two wheelers, with 16-21% volume CAGR over fiscals 2024 to 2027.
Still prefer two wheelers over passenger vehicles due to relatively better growth outlook.
Citi On UltraTech Cement
Maintain 'buy' on UltraTech Cement at Rs 12,500 target price, indicating a potential 9.5% upside.
Financial investment in Star Cement provides UltraTech a foot in the door to acquire co.
To get large pie of North East market if 100% of Star Cement is acquired.
Constructive on cos catering demand growth, working on cost structures.
Expect 10% volume CAGR through fiscal 2024 to 2027.
See an upside on Ebitda per tonne metrics due to lower costs.
Goldman Sachs On Capex
Central government's total expenditures for Nov 2024 up 3.6%, remained subdued.
Driven by increase in capex of 21% year-on-year.
First eight months of fiscal 2025, capex spending contracted by 12%.
Media articles suggest government officials unlikely to meet budgeted capex target.
Estimate 65% growth over next four months if govt intends to spend budgeted amount.
Nomura On Consumer Preview
Third quarter's demand is weaker than expected; operating margin under pressure too.
Expect rural demand to continue to show improvement.
Expect delayed and weaker-than-expected winter.
Organised players to see share gains.
Rebalancing of channel mix to continue as quick commerce aggressively penetrates.
Price hikes likely gained momentum.
Expect sector sales growth of 4.5% year-on-year.
Expect the highest revenue growth for Tata Consumer and Marico.
Expect the highest operating margin contraction for Tata Consumer, Godrej Consumer, Asian Paints, and Colgate; and the least for Dabur, HUL, and Nestle.
Top picks in the sector: Marico, HUL, and ITC.
HSBC On Tata Chemicals
Maintain 'sell' with target price of Rs 820, implying downside of 22% due to challenging market conditions and modest demand growth.
View the industry in a difficult phase.
Global soda ash capacity growth outpaces demand growth leading to low operating rates.
Current low soda ash prices reflect industry headwinds and oversupply concerns.
Faster demand growth, capacity disruptions, entry into specialty chemicals could improve prospects.
Minimum import price for soda ash in India is limited positive development.
Macquire On IT
India IT firms require H1B visas as not all positions can be filled by hiring locally.
Analysis indicate a long tail of filers, with bulk of visas being accounted for.
Proposals such as a flat wage floor that is very high is impractical.
Any flat wage introduced will likely set in motion a wage spiral across the whole economy.
See current correction as a good opportunity to buy India IT services stocks.
Top picks are TCS (Outperform, Target Rs 5,710, upside 39%), HCLT (Outperform, Target Rs 2,020, upside 5%) and Persistent Systems (Outperform, Target Rs 6,750, upside 4.2%).
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