Brokerages have highlighted opportunities across healthcare, tyres and retail, issuing fresh calls on Apollo Tyres, Narayana Hrudayalaya and Vishal Mega Mart, alongside views on the Mobile Phone Manufacturing Scheme, cement, power and monsoon trends.
Kotak Securities on Narayana Hrudayalaya
- Upgrade to Buy from Add; Hike TP to Rs 2350 from Rs 2220
- Indian insurance concerns overdone—losses to gradually reduce hereon
- Cayman insurance outlook improving; UK margins poised to expand
- Core India hospital segment continues to deliver with 39% YoY EBITDA growth
- India hospital business trading at attractive valuations
- Expect Indian integrated care losses to gradually reduce hereon
- With high acceptance of the recent price hikes, expect Cayman insurance losses to decline at a faster pace hereon
- Expect Cayman insurance to achieve EBITDA breakeven by end-FY28.
UBS on Apollo Tyres
- Upgrade to Buy from Neutral; Hike TP to Rs 590 from Rs 580
- Time to turn constructive
- India operations nearing an inflection point
- A better road ahead for Europe
- Continues to trade at a valuation discount to peers
- Believe the outlook is improving as management takes concrete steps to strengthen the India business
- Believe investors remain overly focused on near-term commodity cost headwinds and recent execution challenges
- Q2FY27 may see further pressure, given that natural rubber prices increased
- Expect a meaningful improvement in earnings thereafter
- Project EBITDA to rise 21% YoY in FY28
- Believe the market is underappreciating Apollo's medium-term earnings recovery potential.
MS on Vishal Mega Mart
- Maintain Overweight with TP of Rs 146
- Re-appointment of MD & CEO for 5 years; key positive
- Uncertainty around management succession has been a key overhang
- This could help allay market concerns to some extent
- The stock has been weak, down 14% in the past three months
- Stock trades at relatively cheap vs. discretionary peers, despite its consistent execution
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Kotak Securities on Mobile Phone Manufacturing Scheme
- Scheme introduces a two-track framework
- Target Scheme 1 focused on scaling manufacturing and localization through a demanding 15% moving baseline revenue target
- Target Scheme 2 aims to foster Indian smartphone brands
- Believe exports will be critical for brands to consistently exceed TS1 growth hurdles, given India's flat domestic smartphone sales
- Mobile production growth has been predominantly export-led
- Scenario analysis suggests a 14-22 bps EBITDA margin uplift for Dixon from MPMS.
Kotak Securities on Cement Sector
- Pricing holds up across most regions
- Channel checks suggest cement prices have softened marginally
- Decline has been lower versus prior-year trends
- Restricted to select regions such as East for the most part
- Cement demand growth, on the other hand, has been robust
- Expect margin pressures to peak out in Q2, with a subsequent improvement notwithstanding extended period of conflict
- Maintain cautious view on the sector given demanding valuations.
Macquarie on Monsoons
- Rain delay, not crop distress as of now
- Situation warrants close monitoring
- Sowing catches up; Reservoirs cushion the deficit
- Reservoir storage remains healthy across much of the country
- Food-supply and inflation risks have moderated since June
- Although the remaining rainfall deficit still leaves crop yields dependent on the distribution of late-season rains.
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Jefferies on Power Sector
- Private sector to grow faster than PSUs
- Believe the private sector will see higher earnings CAGR vs PSUs in the next decade
- 63% of India's incremental power capacity addition over FY26-30E should come from the private sector which will be largely renewable (RE) driven
- Estimate factor 6% power demand CAGR over FY26-30E and private sector generation rising at 9%.
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