Brokerages have reacted to the third-quarter financial results of Zomato Ltd., One97 Communication Ltd. and Dixon Technologies Ltd.
Analysts were positive on Zomato as they continue to maintain 'buy' rating, with growth in Blinkit on the higher side.
With Paytm's results in line with expectations, analysts continue to maintain 'underperform', as risks around revenues remain.
On the other hand, analysts were mixed on Dixon Technologies.
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 Zomato
Nomura
Maintained 'buy', but cut target price to Rs 290 from Rs 320 per share.
Competition heating up in quick commerce, but company is well positioned to be among top two players.
Food delivery business slows but surprises on profitability improvement.
Q-commerce: Advancing store opening targets by a year.
Strong execution and balance sheet are key positives in favour of Blinkit.
BofA
Maintained 'buy' with a target price of Rs 375 per share.
Front loading growth at expense of higher near-term loss.
Blinkit’s growth focus leads to Ebitda/profitability miss.
Demand and execution remain strong at Blinkit.
Buy on favourable risk-reward, as first mover advantage matters in quick-com business.
UBS
Maintained 'buy' with a target price of Rs 320.
Strong growth in quick commerce in Q3 offsets slight moderation in food delivery.
While slowdown in food delivery surprised, margin expansion was a positive.
Blinkit growth surprised on the higher side, the slight margin contraction was also expected due to the increased competition in the space.
CLSA
Maintained high conviction 'outperform', with a target price of Rs 400.
The real India capex story.
Holding onto unit economics while scaling up exponentially.
Blinkit: Robust contribution per order even after factoring costs of a rapid rollout.
Other businesses: food delivery slower but stable with going-out set to accelerate.
Stock construct never more attractive.
Bernstein
Maintained 'outperform' and cut target price to Rs 310 from Rs 315 per share.
Remains positive and sees any correction in response to competition concerns as good opportunity to accumulate.
Sees large total addressable market and likely market consolidation.
Zomato remains brokerage's top internet pick.
Brokerages On Paytm
BofA
Maintained 'underperform' with a target price of Rs 535 per share.
Largely in-line revenue, with control-led adjustment and Ebitda beat.
Looking to expand distribution model.
Net income breakeven is sometime away, the brokerage said.
Risk of slower uptake on lending revenues remain.
Macquarie
Maintained 'underperform' with a target price of Rs 730 per share.
Strong beat on all fronts.
Larger than expected decline in losses, driven by higher revenue and lower ESOP cost.
Strong GMV increase, operating leverage continues to improve.
Upside risks to distribution revenues given the higher take rates.
Jefferies
Maintained 'hold' with a target price of Rs 850 apiece.
Nearing break-even in the third quarter.
Lending to drive pace to recovery.
On-track for adjusted Ebitda break-even in fourth quarter.
New lending model to aid growth, near term margins can be impacted.
Other segments witness muted trends; monthly transacting users' addition can improve growth.
Brokerages On Dixon Technologies
Investec
Maintained 'buy' and hiked target price to Rs 19,000 from Rs 15,900 per share.
Delivers on strong growth estimates. Management focus is on components, the brokerage said.
Management's focus on backward integration.
Incorporate Vivo contract, leading to a 7-12% upgrade to financial year 2026-2027 EPS.
Awaits greater clarity on backward integration initiatives before building-in the same.
Management’s disciplined capital allocation approach gives us confidence.
Goldman Sachs
Maintained 'sell' and cut target price to Rs 10,240 from Rs 10,290.
Q3 below, as PAT growth lagged revenue growth despite margins getting positive support from forex.
Mobile growth peaking, value-add the next focus.
Remains 'sell' on valuation.
Macquarie On Cement
UltraTech Cement: Upgraded to 'outperform' from 'neutral' and hikes target price to Rs 11,868 from Rs 11,564 per share.
Ambuja Cement: Upgraded to 'outperform' from 'neutral' and cut target price to Rs 620 from Rs 618 per share.
ACC: Upgrade to 'outperform' from 'neutral' and cut target price to Rs 2,425 from Rs 2,508 apiece.
Ramco Cement: Downgrade to 'underperform' from 'neutral' and cut target price to Rs 785 from Rs 802 per share.
Shree Cement: Maintained 'neutral' and hiked target price to Rs 25,710 from Rs 25,243 per share.
Dalmia Bharat: Maintained 'outperform' and cut target price to Rs 2,062 from Rs 2,073.
Demand supports price hikes. Ultratech is top pick.
Expects a demand recovery and price hikes to drive margin expansion from second half of calendar year 2024 lows.
Capacity consolidation and a cost focus bode well for the industry's medium-term earnings profile.
Citi On Hindalco Industries
Re-initiated 'buy' with a target price of Rs 725.
Most concerns are likely priced in.
Stock trades at 5 times; has underperformed domestic non-ferrous, global aluminium producers and LME over six months.
Position for tailwinds: likely LME upside in second half and Novelis’ efforts to diversify scrap inputs.
Long term, India costs should fall with alumina expansion/captive coal and Novelis’ profitability with Bay Minette.
Novelis should be able to contain net D/Ebitda below 3 times despite aggressive capex.
Hindalco is our top India metals pick.
Citi On Aavas Financiers
Maintained 'buy' with a target price of Rs 2,170.
Open a 90-day positive catalyst watch.
Relative preference will be for secured financiers.
Anticipates relatively higher CLSS subsidy in the upcoming budget.
Estimate credit cost of <10bps in third quarter with moderation in GS3/1+DPD to 1.04%/3.8%.
Expects stronger sequential AUM growth of approximately 5%.
With increase in BPLR by 25bps in October, spreads will likely have an upward bias in third quarter.
Fourth quarter too is seasonally strong.
Jefferies On Newgen Software
Downgraded to 'underperform' from 'buy' and cut target price to Rs 1,240 from Rs 1,550 per share.
Third quarter revenue and profit miss estimates.
Slower growth in annuity revenues/India disappoints.
Longer execution cycles affecting downstream revenues.
Margins set to remain elevated.
Jefferies Quant India Strategy
Avoid third quarter result risk.
Stocks have been under pressure since the start of the second quarter results, when only 40% beat expectations.
Revision trends suggest that third quarter season is unlikely to see a big turnaround.
It's been an ominous start with a lot more companies missing so far.
If the trend continues, brokerage sees two key takeaways:
Stocks (especially large caps) are likely to underperform both before and on the result day.
Stocks that underperform a lot before results could outperform on the result day.
Domestic long-only funds are most overweight on banks, auto and pharma.
Domestic long-only funds are most underweight on materials, financial services and FMCG.
Biggest change has been the shift from overweight to underweight in the cap goods sector, indicating a shift away from cyclical.
Macquarie On Mankind Pharma
Downgraded to 'underperform' from 'neutral' and cut target price to Rs 2,150 from Rs 2,300 per share.
BSV acquisition: Positives baked in, but not execution risk.
BSV (Bharat serum and vaccine) acquisition adds to top-line growth but would drag down bottom-line growth.
Core domestic formulations business remains weak.
Exports business might be topping out.
JPMorgan On United Breweries
Maintained 'overweight', with a target price of Rs 2,150 per share.
Resumes supply of beer to Telangana.
Receival of price hikes in the state will be accretive to margin and earnings growth outlook.
Move pointing towards more rational regulatory policy.
Quantum and timing of price hikes will be key to monitor.
Morgan Stanley On MCX
Maintained 'underweight' with a target price of Rs 3,715 per share.
Core Ebitda was in line in third quarter; higher SGF contribution caused PAT miss.
Will be the first quarterly call since the new CEO joined.
Await commentary on her outlook on product launches, costs, etc.
Find current valuation stretched, given low conviction on sustainability of revenues.
Also Read: MCX Q3 Results: Profit Up 4%, Margin Expands
Investec On IRFC
Maintained 'sell' with a target price of Rs 50 per share.
Déjà vu: same tune for past seven quarters.
Weak AUM growth, led by Nil disbursements.
Stable margins; credit costs remain negligible, while return ratios are stable.
Budget is key monitorable.
Morgan Stanley On Oberoi Realty
Maintained 'equal weight' rating with a target price of Rs 2,060 per share.
Third quarter saw strong growth but missed expectation.
Pre-sales for third quarter are 24% less than estimates, due to a smaller number of 360W booked in the quarter.
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