Motilal Oswal shared its outlook on consumer companies and the capital goods sector for the third quarter, while HSBC Securities expects improved Ebitda margins for household durable companies.
Emkay initiated coverage on Metro Brands Ltd. with a 'buy' call, and Citi remained bullish on Marico Ltd., while holding 'sell' over Dabur India Ltd.
Goldman Sachs predicts Godrej Consumer Products Ltd. to return to being the fastest growing FMCG company in their coverage in fiscal 2026. Jefferies is widely bullish on IT stocks, initiating coverage on Mphasis Ltd. and upgrading their rating on LTIMindtree Ltd.
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 Monday:
Motilal Oswal On Q3 Consumer Firms Preview
Staple companies to see muted quarter amid sluggish urban demand, high palm oil prices.
Liquor companies expected to clock strong growth.
Innerwear firms to see growth on positive demand trends in festive season.
QSR companies to see 18% growth in revenue and 14% growth in Ebitda.
Paint firms to be impacted by delayed monsoon, early festive.
Paint segment to post decline of 1% in revenue and 12% in Ebitda.
Expects Q3 outliers to be Marico Ltd., United Spirits, Jubilant Foodworks Ltd., Kalyan Jewelers (India) Ltd., PN Gadgil Jewellers Ltd.
Likely Q3 underperformers: Asian Paints, Indigo Paint, GCPL, Hindustan Unilever Ltd., Dabur India Ltd.
Brokerage continues to like HUL, GCPL, Dabur despite near-term soft earnings.
Constructive on Jubilant, United Spirits, on business improvement, but neutral on rich valuations.
Goldman Sachs On Godrej Consumer Products
Maintained 'buy' with a target price of Rs 1,370 per share, indicating a potential upside of 25%.
See headwinds from higher palm oil prices and weak home insecticides demand.
Expecting recovery in the final quarter of the fiscal.
Expects Ebitda margins to sequentially recover over the next two to three quarters.
Poised to return to being the fastest growing FMCG company in the brokerage's coverage in fiscal 2026.
Citi On Dabur India
Citi maintained a 'sell' on Dabur India, cut target price to Rs 510 apiece versus Rs 520 earlier, implying a 3% downside potential.
Q3 updates suggest low-single digit consolidated revenue growth in the quarter.
Expects 2.5% annual revenue growth in the third quarter.
Healthcare and beverage segment to drag India business in the quarter in question.
International business may report double digit growth.
Believe inflationary input costs, weak demand will pressure Q3 gross margins.
Brokerage trims FY25-27 earnings estimates by 1-3%.
Motilal Oswal On Q3 Capital Goods Preview
Capital goods sector stocks declined last six months on order inflow concerns.
Expectations line up for inflow revival in the fourth quarter.
Strong existing order books provide healthy revenue visibility.
Expects 19% year-on-year growth in execution for the third quarter.
Expects nearly 20 basis points year-on-year expansion in Ebitda margin for coverage universe.
Estimates revenue and PAT growth of 19% and 26%, respectively year-on-year for coverage companies.
Top picks: ABB Ltd., Larsen & Toubro Ltd., and Bharat Electronics Ltd.
Citi On Marico
Citi maintained 'buy' on Marico with Rs 750 per share as target price, indicating a potential 13% upside.
Q3 update suggests mid-teen revenue growth due to volume growth, price increases.
Expects 14% annual revenue growth in Q3, margins to be at 20%.
Marico to see less pressure from demand slowdown in urban, given potential benefits from initiatives.
Expect company's profitability to be under pressure due to input cost inflation.
Emkay On Metro Brands
Initiated a 'buy' with a target price of Rs 1,500 per share, implying an upside potential of 18%.
Target implies multiple of 70 times the earnings per share value of December 2026.
Remains a platform of choice for third-party brands looking to enter India.
Offers a multi-decade opportunity of double-digit growth.
Has potential to achieve four times the topline in the coming decade.
Deserves superlative valuation because of best possible growth longevity.
Has strong free cash flow generation.
Goldman Sachs On Kotak Mahindra Bank
Departure of CTO is important, could weigh stock performance.
Bank has put in place interim organisation structure to ensure business doesn't get impacted.
Long-term view on the stock remains constructive despite short-term bottlenecks.
Nuvama On SBI Cards
Nuvama upgraded SBI Cards to 'buy' from 'reduce' and increased target to Rs 850 versus Rs 620 earlier, indicating a 17.5% upside potential.
Upgraded rating on improving credit cost outlook.
Credit costs, a key driver of frequent earnings miss, likely peaked in the second quarter.
Expects credit cost to remain stable in the third quarter, and improve from the fourth quarter.
Expects credit cost trajectory to improve on weak credit cycle set in earlier than peers.
Negative impact of regulatory changes are now fully captured.
Key positive trigger could be potential rate cuts by the RBI.
Note: Credit costs is the amount spent to maintain credit quality.
HSBC On Household Durables
Expects some moderation in revenue growth rates in the third quarter versus the second.
Demand conditions in festive periods for relevant categories (appliances) decent.
However demand has been soft post the festive season.
Air conditioners category continues to witness strong growth.
Expects sharp Ebitda margin improvement for all three covered companies.
Retained 'buy' on Havells India Ltd., with a target price of Rs 2,050, implying a 20.5% potential upside.
Prefers Havells going into Q3 results.
Retained 'buy' on Crompton Greaves, with a revised target price of Rs 470 versus Rs 500, implying a potential 26.3% upside.
Retained 'hold' on Voltas Ltd., with a revised target price of Rs 1,850 versus Rs 1,780 per share, indicating a potential upside of 0.8%.
Jefferies On IT
Initiated 'buy' on Mphasis, with a target price of Rs 3,460 per share, indicating a potential upside of 20.5%.
Offers best way to play the improvement in US macro and demand outlook in BFSI.
Valuations at 29 times offer relative comfort.
Upgraded LTIMindtree to 'buy', with a target price of Rs 6,650, implying a potential upside of 16%.
IT firms continue to focus on costs, improving margins.
Improving outlook should support premium valuations.
Key ideas: Infosys Ltd., Tata Consultancy Services Ltd., LTIM, Coforge Ltd., Sagility India Ltd., Mphasis.
HSBC On Q3 Financials Preview
Expects ROE/ROA of private banks to remain under pressure due to slower loan growth, NIM compression, credit cost normalisation.
Earnings pressure for NBFCs like Credit Access, L&T Finance, IIFL due to their MFI exposures.
NBFCs MFI stress may peak in Q3, commentary needs to be evaluated.
Asset quality is likely to be the key factor to watch for, especially for NBFC.
Prefers large lenders like HDFC Bank, ICICI Bank, Axis Bank, Bajaj Finance and Shelter Housing Finance in the current environment.
Nuvama On Banking And Finance Preview
Top picks on earnings expectation: ICICI Bank, HDFC Bank, Muthoot Finance, Shriram Finance, LIC Housing Finance, IDFC First, Bank Of Baroda, Punjab National Bank, State Bank of India, Canara Bank.
HDFC, ICICI, Federal, state banks likely to face less stress.
HDFC Bank to lead annual deposit growth, ICICI remains consistent.
IDFC First to be only private bank to see sharp quarter-on-quarter dip in credit cost.
Microfinance institution lenders could see a sharp deterioration.
Vehicle and housing finance secured retail appear safer in microfinance space.
Bandhan's microfinance institution stress to increase; impact to be lower on early guardrails.
RBL and AU likely to to see sharp rise in credit cost, deceleration in loan growth due to MFI exposure.
Citi On IndusInd Bank
Maintained a 'buy' rating with a target price of Rs 1,378 per share, indicating an upside potential of 38%.
Advances growth above estimates by 1.5% quarter-on-quarter.
Expects moderation in MFI portfolio.
Expects disbursements to see revival.
Deposits disappoint with possible fall in high cost deposits.
Loan to deposit ratio at 89.6%.
Estimate slippage at 2.9-3%, credit cost of 200 basis points, ROA of 0.9%.
Citi On Bank Of Baroda
Maintained 'buy' rating with a target price of Rs 300, implying an upside potential of 24%.
Deposit and advances growth moderated to 2% quarter-on-quarter.
Domestic loan to deposit ratio at 82.6%.
Expects NIM pressure in guided range of 3.05%.
Build credit cost of 55-60 basis points.
Expects recovery of Rs 1,000 crore to aid ROA of 1.1%.
Citi On L&T Finance
Maintained 'buy' with a target price of Rs 221, indicating a 54% potential upside.
Retail disbursements supported AUM growth ahead of estimates.
Wholesale AUM has run down to Rs 28,500 crore.
MFI disbursements slowed down, farmer finance picked up.
Expects NIM compression and rise in opex.
Expects credit cost of 2.7% and ROA of 2.1%.
Citi On Bajaj Finance
Maintained 'buy' with a target price of Rs 8,150, indicating a potential 11% upside.
New loans booked rose in line with historical trend.
Expects margins to have positive bias and credit cost of 2.2%.
Expects ROA of 3.9% and ROE of 18.7%.
BOFA On Diversified Financials
Affordable finance company's to see 15-20 basis points growth moderation.
Credit cost higher sequentially, stable NIMs.
Gold Financiers: Strong growth, MFI stress to Impact Asset Quality.
Life Insurance: To see a limited surrender value impact on Private Insurers, weaker quarter on growth.
Citi On AU Small Finance Bank
Maintained 'neutral' with a target price of Rs 625, indicating a potential upside of 9%.
Year-to-date loan growth ahead of estimates by 4%.
Deposit growth lagged estimates by 4%.
Expects cost of raising deposits to remain elevated.
NIMs are expected to be under pressure.
MFI credit cost to trend higher.
Expects ROA of 1.5%.
Citi On RBL Bank
Maintained 'buy' with a target price of Rs 205, indicating 25% potential upside.
Growth driven by retail, deposits fell on high base, and granular retail deposits rose.
Loan to deposit ratio rose 3%, expect gross slippage of 5%, and credit cost expected to rise to 4%.
Expect ROA of 0.3%.
Citi On HDFC Bank
Maintained 'buy' with a target price of Rs 2,080, implying a potential upside of 19%.
Advances growth constrained by loan to deposit ratio.
Domestic retail loans grew 2% quarter-on-quarter and corporate grew 3% quarter-on-quarter.
Deposit growth was marginally higher than estimates.
Expects broadly stable margins.
Expects ROA of 1.7%.
Nomura On Bajaj Finance
Upgraded to 'buy' rating with a target price of Rs 8,560 from Rs 7,250, indicating a potential 18% upside.
Continued to deliver strong numbers across the parameters.
Reasons for its sustained performance:
New product launches, balance between secured and unsecured loans.
Extensive usage of technology.
Don't see much upside risk to management guidance on credit costs.
FY26 outlook better than FY25.
Antique Broking On Real Estate
Expects sales bookings in third quarter to be muted for: Aditya Birla Real Estate, Prestige Estates, Sobha, and Kolte-Patil Developers on lack of new launches.
Expectations of good numbers due to new launches and inventory availability: Godrej Properties, Macrotech Developers, DLF, Oberoi Realty, Sunteck Realty, and Brigade Enterprises.
Q4 Expectations:
Expected to see a surge in launches from: Aditya Birla Real Estate, Prestige Estate, SOBHA, Godrej Prop, DLF, Brigade Enterprises, Sun Teck Realty, and Kolte Patil Developers.
Top Picks: Aditya Birla Real Estate, Oberoi Realty and Prestige Estates.
Morgan Stanley On Q3 Consumer Preview
Staples: Sequentially better quarter albeit weak.
Pricing to drive revenue growth in categories like copra, tea, cocoa, palm oil.
Rural growth ahead of urban growth for staples companies, urban sluggishness to continue.
Price hikes not matching the inflation, margin impact to be seen next quarter.
Sequential positive turn in tea volume growth expected for Tata Consumer.
Strong growth for VBL led by Africa trends and inflation led revenue growth.
Titan's jewellery segment is expected to grow 18% year-to-year.
Paint companies to deliver low single-digit decorative volume growth
Expects low single-digit decline to low single-digit growth in top-line.
Ebitda margins to improve sequentially.
Expects Berger and Kansai to outperform Asian Paints in revenue growth.
Morgan Stanley On India Property
Expects DLF and Oberoi to show very strong sales momentum in the third quarter.
Key launches to result in 20-35% quarter-on-quarter growth in LTM sales.
If maintained this could mean FY25 growth of 60% year-on-year outpacing peers.
Lodha and Godrej should report pre sales of Rs 4,100 crore and Rs 5,300 crore, inline with expectations.
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