CLSA's Radar: Upgrades For BPCL, HPCL, Macrotech; Downgrades For IndusInd Bank, Dish TV, Sterlite Tech

CLSA in its latest market strategy note highlighted key earnings changes and stock recommendations for the current and the subsequent financial years (FY26 and FY27). Among its top upgrades are Bharat Petroleum Corporation Ltd., Hindustan Petroleum Corporation Ltd. and Macrotech Developers Ltd.

CLSA has upgraded Bharat Petroleum's earnings forecast by 16% for FY26. Bharat Petroleum is one of India's leading oil and gas companies, engaged in refining, marketing, and distribution of petroleum products. Meanwhile, Hindustan Petroleum's earnings forecast has been raised by 13% for FY26. Macrotech Developers, formerly known as Lodha Group, has seen a 12% upgrade in its earnings forecast for FY26.

CLSA has also downgraded earnings forecasts for Dish TV India Ltd. by 207%, Sterlite Tech by 58%, and Indusind Bank Ltd. by 50% for FY26. For FY27, top upgrades include Tata Steel Ltd. with 19% upside, and Shree Cement Ltd.17% upside.

Rating Changes

CLSA analysts have upgraded the ratings for several stocks:

• Tech Mahindra Ltd: Outperform to High Conviction Outperform

• HDFC Bank Ltd, Amber Enterprises India Ltd, GAIL (India) Ltd: Hold to Outperform

• Ashok Leyland Ltd: Underperform to Hold.

Conversely, several stocks have seen downgrades:

Outperform to Hold

• IndusInd Bank Ltd

• DB Corp Ltd

• Kaynes Technology India Ltd

• Astral Ltd

• Kotak Mahindra Bank Ltd

• Hero MotoCorp Ltd

• ACC Ltd

• Cholamandalam Investment

• Finance Company Ltd

Hold to Underperform

• CreditAccess Grameen Ltd

• SBI Cards and Payment Services Ltd

• Godrej Consumer Products Ltd

Market Strategy

CLSA's note indicates a good quarter with better-than-expected profit growth in 4QFY25, but no respite on EPS cuts. The reported pre-exceptional 4QFY25 profit before tax for the CLSA India universe grew at 7.7% year-on-year, surpassing the expected 3.6% YoY.

Strong performances from metals, pharma, capital goods, cement, and financials offset misses in property, power, consumer, and autos.

Among domestic companies, consumption names posted a seven-quarter high in PBT growth, while investment plays saw Ebitda growth normalise after a decline. Urban consumption stocks showed more visible improvement in Ebitda growth compared to rural stocks.

CLSA analysts have lowered their profit forecasts for FY26 and FY27 by 3.0% and 1.7%, respectively. This means their earnings estimates for the Nifty index are now 3.7% and 2.3% below the market average for those years. During the quarter, they downgraded 12 stocks but only upgraded five.

Revenue growth for CLSA's coverage universe came in at 5.4% YoY, ahead of the estimated 4.1% YoY growth, while Ebitda growth was in line at 9% YoY. PBT growth for domestic companies ex-financials was ahead of estimates, driven by strong capital goods and cement results.

CLSA's earnings predictions for FY26 and FY27 are lower than the market average for companies like Bharti, Reliance, banks, certain materials, autos, and utilities. However, their estimates are higher for IT companies and some consumer stocks.