Banking and metal sector, Aditya Birla Real Estate Ltd., and Polycab Ltd. were among the top companies on brokerages' radar on Monday.
The Reserve Bank of India has lowered PSL requirements for small finance banks. This will give them "great flexibility" in terms of portfolio diversification and operational ease, according to brokerages.
While Jefferies has hiked the target price for Polycab, UBS has cut the target price for Colgate Palmolive Ltd. after it posted a weak fourth quarter result.
NDTV Profit tracks what analysts are saying about various stocks and sectors. Here are the analyst calls to keep an eye out for on Monday.
Brokerages On Banks
Citi
Citi believes the relaxation of PSL targets for small finance banks is a structural relief.
The change allows small finance banks greater operational flexibility and supports portfolio diversification.
AU Small Finance Bank cited its organic PSL build-up as a rationale for its MFI acquisition.
Post-merger, AU SFB was fully compliant with overall and sub-sector PSL norms in financial year 2025.
Citi notes that the benefit of the revised PSL norms should be evaluated in light of AU SFB’s stated intent to transition into a universal bank, where the PSL requirement stands lower at 40%.
Morgan Stanley
Morgan Stanley considers the RBI’s move to lower PSL requirements for small finance banks as a structural positive.
This change enhances small finance bank's portfolio diversification capabilities and operational ease.
It is expected to support higher long-term growth run-rates.
AU Bank estimates its current PSL portfolio at 80%.
A key benefit is the potential for additional income from the sale of PSLC certificates.
However, Morgan Stanley notes the surplus in small and marginal farmer segments for the bank is limited.
Jefferies On Polycab
Jefferies maintained a 'buy' rating on Polycab, raising the target price to Rs 7,150 from Rs 7,050.
The company gained 1% market share in organised cables and wires, now at 26–27%.
Timely capex helped deliver a 26% sales CAGR in the C&W segment.
Its FMEG segment turned profitable after 10 quarters.
EPS CAGR for financial year 2025–2028 is estimated at 26%, backed by a strong order book and improved FMEG margins.
Equirus on Real Estate
Sunteck Realty
Equirus initiates a 'Long' rating with a target price of Rs 543.
The brokerage highlights Sunteck’s focus on high-end residential developments and its asset-light model.
The company has made strategic investments in untapped, high-potential markets.
A 25% pre-sales growth target is supported by an expansive development pipeline.
Annuity income is projected to grow fivefold, and a lean balance sheet provides flexibility for further business development.
Aditya Birla Real Estate
Equirus initiates a 'Long' rating with a target price of Rs 3,076.
The brokerage emphasises the company’s large land bank and strong brand presence.
Business development additions of Rs 40,000 crore and strategic partnerships are expected to drive growth.
A pre-sales CAGR of 20–25% is projected over financial year 2025–2028.
Growth could be further boosted through annuity upside and value unlocks via paper exits.
Yes Securities on Oil & Gas
Yes Securities recommends a Buy on Chennai Petroleum, MRPL, HPCL, BPCL, RIL.
It maintains Neutral on IOCL with a TP of Rs 136.
Indian standalone refiners are well-positioned amid the refining upcycle.
CPCL and MRPL are expected to benefit most from re-rating.
Among OMCs, HPCL has the highest target price, followed by BPCL.
RIL is seen as a beneficiary of higher GRMs in its O2C segment.
Macquarie on Metals
Tata Steel: Maintain Outperform, target price raised to Rs 181 from Rs 156.
JSW Steel: Maintain Neutral, target price raised to Rs 1,125 from Rs 1,034.
JSPL: Maintain Outperform, target price raised to Rs 1,029 from Rs 980.
Hindalco: Maintain Outperform, target price cut to Rs 709 from Rs 723.
Coal India: Maintain Outperform, target price cut to Rs 445 from Rs 514.
Macquarie prefers ferrous stocks, citing strong domestic demand fundamentals.
Steel companies are expected to benefit from improved ROE profiles and deleveraging.
Hindalco's near-term upside may be capped due to global business uncertainties.
Macquarie believes net debt for steel companies peaked in financial year 2025, with a decline expected over the next two years.
JSW Steel is its top pick in the sector.
Citi on Brokers & AMCs
Citi maintains a Buy on Nuvama Wealth with target price at Rs 10,465 and 360 One with target price of Rs 1,450.
It maintains a Sell on KFin Tech target price at Rs 1,025.
The brokerage holds a positive short-term outlook for all three, driven by a revival in the primary market and unlisted equity activity.
Wealth managers are expected to benefit from improved transaction revenue and client flows.
KFin’s issuer solutions business is expected to benefit, though Citi remains cautious.
Jefferies India Strategy
GST cess collections ($20 billion annually) are expected to turn into a surplus by first quarter of calendar year 2026.
The government may use this surplus to fund defence capex and reduce the fiscal deficit.
This could allow for GST slab rationalisation.
Sectors like cement (key input in infra/housing), two-wheelers, insurance, telecom, and hybrid cars could see rate reductions from 28% to 18%.
Citi on Devyani International
Citi maintains a Buy on Devyani with a target price of Rs 209.
Devyani is pursuing a dual strategy of "House of Brands" and "Food Court", supported by recent acquisitions and partnerships.
Demand trends remain subdued, with positive SSSG driven by promotions and advertising.
Store expansion under new brands is expected to remain limited in financial year 2026.
The kiosk model supports low capex and fast payback.
Significant scale-up will only occur once strong unit economics are visible.
Jefferies on KFin Tech
Jefferies maintains a Buy on KFin Tech with a target price of Rs 1,460.
The company is focusing on synergies from M&A, especially through the acquisition of Ascent.
Ascent’s large-market presence allows access to larger clients and will be EPS-accretive from next year.
KFin's domestic business remains healthy without pricing pressure.
Jefferies believes KFin can evolve into a globally relevant RTA-FA platform with a 20% profit CAGR.
UBS on Colgate
UBS maintains a Buy on Colgate but cuts the target price to Rs 3,000 from Rs 3,100.
Although fourth quarter of the previous quarter was weak, cyclical lows may present a good buying opportunity.
The company is structurally preparing for high single-digit revenue growth.
UBS sees improved structural attractiveness and a favourable risk-reward over a one-year horizon.
Jefferies on Cholamandalam Finance
Jefferies maintains a Buy on Chola Finance with a target price of Rs 1,800.
First quarter saw softer growth and asset quality, though recovery is expected if the monsoon is good.
Management expects 10–15 bps NIM expansion and stable credit costs.
Weaker trends may weigh on the stock in the near term, but Jefferies sees this as a buying opportunity.
Cost ratios should ease by financial year 2027, boosting ROA and ROE.
Nomura on Autos
Nomura notes that anti-lock braking systems will soon be mandatory for all two-wheelers in India.
This regulatory change is expected to impact demand by 2–4%.
Hero MotoCorp is likely to be the most affected.
The cost increase of around Rs 3,000 per vehicle will likely be passed on to consumers, resulting in a 3–5% price hike.
Goldman Sachs on L&T Finance
Goldman Sachs maintains a Buy on L&T Finance with a target price of Rs 185.
The company is on track with ROA improvement and AUM growth.
It is expected to deliver 30% earnings CAGR over financial year 2025–2027.
If the company delivers better-than-expected performance, further re-rating is possible.
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