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Brokerage Views: Emkay On Nestle, Motilal Oswal On Prestige Estates And More

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 Wednesday morning.

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

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

Emkay Global Financial Services has initiated coverage on Nestle, while Motilal Oswal has reiterated its 'buy' on APL Apollo Tubes.

India's benchmark stock indices snapped their three-day rally to close marginally lower on Tuesday on likely profit booking, after indices hit a fresh record high in the previous session.

Information technology stocks came under pressure as hope of an earlier rate cut by the Fed waned following the release of economic data in the US. Mid- and small-cap banks led outperformance in the broader indices.

The NSE Nifty 50 ended 8.70 points, or 0.04%, lower at 22,453.30, while the S&P BSE Sensex fell 110.64 points, or 0.15%, to close at 73,903.91.

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 Wednesday morning.

Emkay Initiates Coverage On Nestle

  • Emkay Global Financial Services initiates coverage on Nestle with a 'reduce' rating and a target price of Rs 2,650 apiece.

  • Current capex cycle to address company's segment demand more affectively.

  • Penetration-led volume growth is helping it outperform sector volume growth.

  • Strong pricing power is added advantage and a likely factor for faster margin recoup.

  • Sees stock re-rating restrained by pressure on ROE/ROCE ahead

  • Any consumption slowdown in the formal sector would be a downside risk

  • Capability of utilising enhanced capacity and driving innovation would be an upside risk

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Motilal Oswal On Prestige Estates

  • Motilal Oswal Financial Services reiterates 'buy' on Prestige Estates, with a target price of Rs 1,535 apiece.

  • Expansion in new markets to sustain pre-sales growth momentum.

  • Rental portfolio: Mumbai assets shaping up well.

  • To start generating positive free cash flow from FY26.

  • Platform deal with Abu Dhabi Investment Authority and Kotak AIF can further release cash flow burden.

  • Monetising hospitality portfolio can lead to value unlocking.

Citi On MakeMyTrip

  • Citi retained a 'buy' on MakeMyTrip, but reduced target price to $85 apiece. The stock is up 50% so far this year.

  • Travel sentiment remains buoyant especially across air and hotel

  • Government focus on promoting domestic travel & tourism

  • Favorable supply-side dynamics for domestic/international leisure travel

  • Well positioned given its leadership, execution track record and growth initiatives

  • May continue to hold their A&P spending at 5% of GBV in the near/medium term

Opinion
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Systematix Initiates Coverage On Shailey Engineering 

  • Systematic initiates coverage on Shailey Engineering with 'buy' rating and a target price Rs 720 apiece.

  • Leading exporter of high-precision engineered plastic products

  • Wide customer base across healthcare, consumer, appliances, auto and lighting

  • Strong order book and guidance received from key customers

  • Expect 19%/29%/46% CAGR in revenue/ Ebitda/PAT over FY23-26E

Motilal Oswal On APL Apollo Tubes

  • Motilal Oswal reiterate 'buy' on APL Apollo Tubes with a target price of Rs 1,800 apiece, implying an upside 14%.

  • Ended FY24 with a healthy sales volume growth of 15%

  • Despite subdued volume growth in H2FY24

  • Based on channel checks, demand scenario to remain weak

  • Slowdown in construction activity, delay in government projects key factors

  • Dealers are operating with minimum inventory level

  • Global foray with manufacturing plant commissioned in Dubai

  • Plans to open warehouses in Liverpool, Melbourne, Antwerp, and Houston

  • Demand recovery post Q2FY25, expect restocking from dealers

  • Reduce FY25/FY26 EPS estimates by 4% each; FY26E EPS at 32x

Nomura On M&M Financial 

  • Nomura maintains 'reduce' rating on M&M Financial with a target price of Rs 240 apiece.

  • March 2024 update reflects tepid growth of 9% year-on-year

  • 4QFY24, disbursements stood at Rs 15,300 crore, growing 11% year-on-year but declining 1% qoq

  • Disbursements for FY24 registered growth of 13% year-on-year at Rs 56,200 crore.

  • Business asset growth remained healthy at 24% year-on-year in March 2024.

  • Improvement in asset quality comparatively softer than previous years.

  • Improvement in asset quality may be driven by elevated write-offs during the quarter.

  • Credit cost likely staying elevated.

  • To achieve guidance for FY24 (1.5%-1.7%), credit cost to be at 0.9% in 4Q24

Emkay On Motherson Sumi Wiring India

  • Emkay retains 'buy' rating on Motherson Sumi Wiring India, with a target price of Rs 80 apiece, implying an upside of 16%.

  • Company is making strong breakthrough in SUV-focused OEMs, including for EVs

  • Setting up a new facility within its existing Pune plant

  • Higher localisation, scale benefits to help improve profitability

  • Offers a proxy play on PVs; major beneficiary of EV-shift

Jefferies On ICICI Lombard

  • Jefferies reiterates 'buy on ICICI Lombard. Hikes target price to Rs 1,950 apiece from Rs 1,730 apiece.

  • Strengthening presence in health insurance - digital and agency network

  • Expect retail health segment ramp-up in the next 2-3 years

  • Competitive intensity in the sector becoming more rational

  • Easing competition allowing market share gains in Motor-OD

  • Expect 16% premium CAGR in FY24-27

  • Lower combined, raise earnings estimates by 2-4% in FY25-26