Brokerage Views: Citi On ICICI Bank, Motilal On Titan And More

Here are all the top calls you need to know this Thursday morning.

<div class="paragraphs"><p>(Source: Envato)</p></div>
(Source: Envato)

Top brokerages, from Citi Research to Motilal Oswal Financial Services Ltd., have come out with interesting stock calls on a variety of sectors.

Citi maintains rating on ICICI Bank, Motilal Oswal maintains a 'buy' rating on Titan Co.

The benchmark stock indices recouped from loss to gain on Wednesday, tracking recovery in heavyweights Reliance Industries Ltd., HDFC Bank Ltd., and Axis Bank Ltd.

We at NDTV Profit are tracking what the brokerages are putting out on specific stocks on the go. Here are all the top calls you need to know this Thursday morning.

Citi Research On ICICI Bank

  • Citi maintains 'buy' on ICICI Bank with a target price of Rs 1,322 apiece.

  • Expects RoA/RoE to be intact in fourth quarter, estimate mid-single-digit NIM contraction in Q4.

  • Operating leverage delta will be prominent from the fourth quarter.

  • Don't see risk building in any of its product portfolios, credit cost estimated at less than 50 bps.

  • Expects 4% QoQ deposits growth translating to 17–18% YoY growth.

  • Loan growth to be anchored to deposits growth with similar traction.

Motilal Oswal On Titan

  • Motilal Oswal maintains a 'buy' rating with a target price of Rs 4,300 apiece based on a 65 times FY26 earnings per share.

  • Reduction in gold premium is compensated with other initiatives to protect operating margin.

  • Management said that the jewellery EBIT margin of 12–13% is sustainable.

  • Company has scaled up its emerging jewellery business to Rs 455 billion in FY24 from Rs 3 billion in FY03.

  • Jewellery and other businesses still have strong long-term growth potential.

  • Gradual recovery in the studded ratio should support margin improvement.

  • Continues to prefer Titan for its best-in-class execution track record.

  • Consumer preference for branded jewellers will keep the robust growth rate intact.

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Citi On India Consumer, Retail

  • Demand growth, led by the gold price and decline in volume on a year-on-year basis, is witnessed.

  • Competitive intensity has increased from national, organised and unorganised/local players.

  • Local jewellers' buying rate is Rs200/gm lower than the selling rate compared to national players.

  • Majority of jewellers now have the same level of making charge.

  • Studded jewellery demand/growth has seen some impact due to correction in diamond prices.

  • Gold has become a preferred product, given the correction in diamond prices.

  • Studded mix is 40%; high value/solitaire diamond accounts for 10–12% of sales.

Citi Research On Indian Banks

  • Estimates 2–3% NII growth quarter-on-quarter and 14–15% in profit after tax for banks under coverage.

  • Advances growth to be anchored to deposits growth to manage incremental LDR; estimate 3–4% quarter-on-quarter growth.

  • Credit growth to follow deposit growth's trajectory.

  • Volume-linked costs, investment in franchise and technology will drive opex growth (except ICICI Bank)

  • Favourable bounce rates, normalised slippages and recoveries to aid GNPA trends.

  • Expects Axis Bank, HDFC Bank, ICICI Bank and Kotak Mahindra Bank to report 5–10 basis points of NIM contraction.

Citi Research On Kalyan Jewellers

  • Target price set at Rs 480 apiece at a 24% discount to Titan.

  • Differences in business models affect growth rates, cash flows and return profiles.

  • There is ample room for the stock to re-rate, provided there is steady execution.

  • PE stake overhang or stock liquidity issues also affect headline multiples

    Upside risks include

  • Stronger consumer traction to the company's offers and promotions

  • Potential upside from the company's expansion plans or accelerated franchising plans.

  • Better-than-expected margins on account of the moderation in ad, staff and other expenses.

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