Stock Recommendations Today: Trent, ITC, Bharti Airtel, SBI On Brokerages' Radar

Trent Ltd., ITC Ltd., Bharti Airtel Ltd. and Hero MotoCorp. Ltd., are among the top companies on brokerages' radar on Friday.

Further, analysts have also given their take on the upcoming RBI Monetary Policy Committee meet, which convened on Feb. 5 and is set to conclude on Friday. The central bank will be deciding on rate cut. Among the brokerages, Nuvama, Morgan Stanley and Macquarie expect 25 bps rate cut from RBI.

NDTV Profit tracks what analysts are saying about various stocks and sectors. Here are the analyst calls to keep an eye out for on Friday.

Citi

• Maintained 'buy' but cut target price to Rs 7,800 from Rs 9,350.

• Operational performance remained strong in third quarter.

• Like-for-like moderation is led by further slowdown in discretionary consumption, bundled with higher base, brokerage said.

• Trent is top pick in India consumer discretionary and retail segments.

Bernstein

• Maintained 'outperform' rating and cut target price to Rs 6,900 from Rs 8,100.

• Retail area additions and margin hold-up are key positives but lower SSSG a key issue, the brokerage said on third quarter earnings.

• Target cut was due to lower SSSG, which led to EPS cuts.

• Valuation wise, 24 month forward P/E is lowest since 2021.

• CMP factors in a 15-17% EPS growth from FY24-FY30, which is conservative, Bernstein said.

Jefferies

• Retained a 'hold' rating and slashed the target price to Rs 5,800 from Rs 5,900 per share.

• For second quarter in a row, Trent reported just in line earnings, but revenues missed estimates.

• Fashion LFL was at HSD, even as company continues to expand stores smartly.

• Despite some investor concerns, reported Ebitda margins were largely maintained, which came as a relief.

• Stock surprisingly corrected 8% post results, probably as earning upgrade cycle seems to have paused and valuation is not cheap

Goldman Sachs

• Maintained 'buy' but cut target price to Rs 490 from Rs 500.

• Third quarter saw steady cigarette business, but weak FMCG and paper margins.

• Cigarette business growth improved, albeit on a low base.

• Cigarette margins impacted by cost inflation and competition, gradual pricing likely to mitigate the impact.

• FMCG and paper business saw sharp decline in margins, due to input cost inflation.

Morgan Stanley

• Maintained 'overweight' rating and hiked target price to Rs 578 from Rs 554.

• Third quarter saw good cigarette performance but weak margins.

• Cigarettes implied volume growth was 5%. The brokerage estimates 4%.

• Top-line was better across segments, barring Agri.

• Ebitda was weak across, with the exception of Agri.

• Good growth in cigarettes was a key positive surprise.

• Acquisition announced in the fresh and chilled Deli meats and ready-to-cook category.

Macquarie

• Maintained 'outperform' with target price of Rs 530 per share.

• In-line cigarette EBIT; paper/FMCG weak.

• 6% volume growth and mixed improvement partly offset by leaf tobacco inflationary headwinds.

• Weak paper profitability and muted FMCG margin due to input cost pressures drive a modest 1% cut to FY26/27E EPS.

• No tax hike in the recent budget and healthy cigarette volume growth has the brokerage constructive on cigarette growth.

Macquarie

• Maintained 'outperform', with target price of Rs 1,710 per share.

• Solid ARPU, margin, free cash flow in third quarter.

• ARPU growth was above consensus estimates and aided visibility on achieving Rs 300 ARPU by FY28.

• Sustained India Mobile margin expansion highlights Airtel's focus on profitability.

• Focus now shifts to the next round of tariff hikes.

Morgan Stanley

• Maintained 'equal weight' with target price of Rs 1,650 per share.

• Third quarter saw steady execution and solid free cash flow generation.

• India's net debt narrowed above expectations. This reflected solid free cash flow generation in Q3.

• Stronger than expected cash flow was helped in part by lower than expected capex.

• Key highlights of the quarter were steady growth in subscribers and ARPU in the India mobile business, along with sharp margin improvement QoQ.

Macquarie

• Maintained 'underperform' with target price of Rs 700 per share.

• Third quarter saw lower pre-provision operating profit, offset by lower credit costs.

• NIM guidance reduced by 30 bps to 3% levels.

• Credit costs decline driven by provision write-back.

• All eyes on the margin trajectory.

Morgan Stanley

• Maintained 'equal weight' with target price of Rs 865.

• Strong asset quality offset margin miss in third quarter.

• While asset quality remains strong, core PPoP margin progression remains under pressure.

• NIMs declined by 13bp QoQ and drove 3% NII miss.

• Credit growth remains strong at 14% YoY, and continues to grow faster than deposits (10% YoY), given better starting point of liquidity

Jefferies

• Maintained 'buy' with target price of Rs 5,075 per share.

• Third quarter saw Ebitda beat.

• Q3 Ebitda and PAT grew 8-12% YoY and were 7-12% above estimates, due to higher-than-expected ASP and gross margin.

• Ebitda per vehicle rose a slight 1% QoQ to new high.

Citi

• Maintained a 'buy' rating but cut target price to Rs 5,400 from Rs 6,300.

• Q3 results beat estimates.

• Brokerage retained its 'buy' rating given steady margins and positive outlook for rural demand.

• Recent tax rate changes could also aid industry demand.

• Competitive landscape remains challenging, and Hero’s market share could continue to be under pressure

• Maintained 'equal weight' rating, with target price of Rs 5,157.

• Third quarter was a beat on volume growth and saw in-line top line.

• Gross margin was weak and at nine quarter low, albeit the company increased prices in Q3.

• Focus states grew 2.6 times, outperforming other regions, and dairy drinks, croissants and wafers saw double-digit growth.

• Inflation remains a key monitorable, which may lead to pricing actions, if needed.

• Maintained a 'neutral' rating but hiked target price to Rs 5,650 from Rs 5,060 per share.

• Third quarter core earnings were ahead, but reported below on higher settlement guarantee fund.

• Raised estimates on higher options share.

• Index options ADP is the single biggest earnings driver.

• Higher settlement contribution was triggered by an updated regulatory assessment, with this being the first quarter for the new framework’s implementation.

Macquarie

• Expects the MPC to cut rates by 25 bps, no CRR cut.

• Liquidity situation has significantly improved, so a CRR cut no longer seems necessary.

• Cumulatively, it expects 50-75 bps rate cuts in CY25.

• Closely observing any remarks on the regulations front, related to liquidity coverage ratio, expected credit loss and project finance norms by the new RBI governor.

Morgan Stanley

• Expects RBI to commence the rate easing cycle with a 25 bps rate cut.

• This will reflect the current domestic growth-inflation dynamics.

• Expects the central bank to add durable liquidity and keep a close watch on currency to limit excessive volatility.

• Expects the MPC to retain its neutral stance.

Nuvama

• Expects the MPC to shift its monetary stance from 'neutral' to 'accommodative'.

• A rate cut likely; economy is in need of a policy stimulus.

• RBI must step up to support the economy through liquidity measures and rate cuts.

• A CRR cut unlikely in the wake of recent liquidity measures.

• New governor’s assessment of the nature of slowdown in the economy and guidance would be keenly watched.

Jefferies

• As RBI governor presides first MPC, expectations are high on balancing liquidity, rate and rupee.

• Steps to ease immediate liquidity are positive.

• Hope durable liquidity is eased especially as LCR tightens.

• Combining any CRR with fresh LCR can bring durable liquidity.

• Prefers rate cut after liquidity improves, else NIM/EPS is at risk.