Stock Picks Today: Bharti Airtel, ITC, Sun Pharma, Paytm, Shriram Finance And More On Brokerages' Radar

Brokerages have turned constructive on stocks across FMCG, pharma, telecom, fintech, IT services and NBFCs, highlighting opportunities in Bharti Airtel, ITC, Sun Pharma, Paytm, Shriram Finance, Jubilant FoodWorks, Sagility India and Inventurus Knowledge Solutions. Analysts have also outlined their broader views on India strategy, financials and the RBI's policy outlook.

HSBC on ITC

• Maintain Hold; Cut TP to Rs 300 from Rs 310
• Price hikes and taxation key to re-rating
• ITC has pushed 75% of requisite price hikes
• Gap highest in RSFT, its largest segment, where competition is most intense
• Expect cigarette business recovery to be gradual – EBIT/stick by Q1FY28 and absolute EBIT Q4FY28
• Competition, tax uncertainty are risks

Bernstein on Sun Pharma

• Maintain Outperform with TP of Rs 2235
• Leqselvi: Taking on Eli Lilly in Alopecia
• Believe Leqselvi now has the clinical credentials to compete rather than merely participate
• Market evidence suggests that convenience and label breadth alone do not determine leadership
• Estimate Leqselvi can approach a $300mn US run-rate by FY29E and a prescription inflection over FY27-29

GS on Paytm

• Maintain Buy; Hike TP to Rs 2070 from Rs 1500
• Multiple tailwinds; risk reward still favourable
• Like Paytm for these reasons:
• Underlying market share, revenue growth and margin momentum for the business remain strong, a trend we expect to continue
• Estimate the recently announced UPI MDR to drive up to 40% EBITDA upgrades for Paytm; believe this is not fully reflected in the current share price
• See optionalities to Paytm's earnings and multiples
• Expect scale up of postpaid, a potential relaunch of wallet
• Next deadline for implementation of a UPI market share cap is Dec ‘26, which could be a material event for Paytm.

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MS on Jubilant Food

• Maintain Equal-weight with TP o fRs 439
• Q2 updates – broadly inline
• Continued sequential improvement in Indian growth is in line with expectations
• Believe margins remain the key monitorable given ongoing inflationary pressures
• Expect standalone EBITDA margin to remain broadly stable in 2Q at 19.5%.

CLSA on Jubilant Food

• Maintain Outperform with TP of Rs 554
• Standalone sales 1.8% below expectation but in line with consensus
• Domino's India LFL growth of 4.1% was slightly below estimate of 5.5%.

MS on Shriram Finance

• Maintain Overweight with TP of Rs 1340
• Believe share price will rise over the next 15 days
• Shriram is one of the most defensively positioned for a rate hike as its NIM and earnings are among the least impacted
• This is due to recent rating upgrades, significantly lower incremental borrowing costs and reduced leverage after the MUFG transaction
• Also has among the lowest share of floating rate (bank) borrowings versus peers
• Also has among the lowest exposure to insurance commissions among NBFCs.

CLSA on Bharti Airtel

• Maintain Outperform with TP of Rs 2310
• Bharti Airtel currently has 30 million postpaid subscribers and Rs 50 increase would boost India mobile revenue by 2%
• But this is likely to be partially offset by the roaming revenue loss as well as charges to be paid to the international operator for network usage
• Latest move follows Bharti Airtel's 5G network slicing for postpaid service

Nuvama on Sagility

• Initiate Buy with TP of Rs 60
• Settling claims, with care Deep payer relationships provide strong growth foundation
• Outsourcing tailwinds and cross-selling widen opportunity
• Sagility shall deliver a ~13%/~19% USD revenue/adjusted EPS CAGR over FY26–29E while EBITDA margins remain resilient at 24–25%
• Healthy cash generation and a largely debt-free balance sheet by FY27E should support returns
• Valuation leaves room for re-rating.

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Nuvama on IKS

• Initiate Buy with TP of Rs 2200
• Deep in care; high on growth
• Care-journey platform with deep enterprise roots
• Provider outsourcing and TruBridge widen the runway
• Estimate revenue/EBITDA/EPS CAGR of ~35%/32%/26% over FY26–29.

Brokerages on RBI Outcome

Kotak Securities

• MPC's shift of stance signals more rate hikes, albeit a shallow cycle
• Expect 50 bps of additional tightening in base case, with upside risks stemming from food and fuel price shocks
• Expect the RBI to further hike the policy repo rate by 25 bps each in December and February

GS

• Continue to expect the terminal rate at 6.25%
• Continue to expect a 25 bps rate hike in the December meeting and a further 50 bps of tightening in H1CY27
• Going forward, would be monitoring generalisation of price pressures in the core inflation basket as measured by diffusion indices

Citi

• Expect another 2x25 bps hike in base case now as calibrated tightening stance has affirmed our view of at least 6% terminal repo rate in this cycle
• Think a more severe inflationary impact from elevated oil prices, stronger demand or El Nino might be needed for repo rates to cross 6%
• Liquidity normalization will be led by organic drivers (CIC) rather than aggressive RBI intervention

HSBC

• Stance is more about mild hikes, and blunt liquidity draining tools are not preferred
• Continue to forecast a 25 bps rate hike in December
• Don't think this will be a deep rate hiking cycle
• Interest rate hikes are not being prioritised to shore up the INR
• Believe that other steps to attract inflows, such as FDI and tax incentives, may come in play if pressure on the currency continues.

BofA

• Policy reset initiated, stance change indicates a long cycle
• Change in stance was delivered earlier than expected
• Believe RBI would maintain a hawkish bias with a possibility of a deeper rate hike cycle going forward
• Reiterate our call for a 100bps hike
• Liquidity and Forex: No specific measures, use available tools.

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Jefferies on Financials

• Rate Hikes Can Be Catalysts For Indian Banks; Prefer Banks over NBFCs
• Change in policy stance to calibrated tightening lifts consensus rate hike expectation to 75-100 bps from 50 bps
• This can be a positive catalyst for the earnings of larger private banks, PSU banks and HFCs
• Whereas a slight risk for smaller private banks, NBFCs and Life Insurance
• This may also help Indian banks' performance relative to global financials
• ICICI, SBI, Axis are top picks among large-cap banks.

Jefferies India Strategy – Mahesh Nandurkar

• Rate hike cycle begins
• RBI's 25bps hike to benchmark rates was as anticipated
• However, the shift in stance to 'caliberated tightening' has raised worries of a prolonged tightening cycle
• RBI raised estimates on both growth and CPI, indicating strong nominal GDP growth, which should support corporate earnings
• With rate-cut cycles driving de-rating / risk-off sentiments, we maintain tactical shift to large-cap call
• Large Banks, RIL, Bharti, Power are key Overweights.

Jefferies India Strategy - Mahesh Nandurkar

• Sep26 Qtr preview - Revenue growth firm; margins impacted
• Coverage universe (ex-O&G, Metals and Financials) expected to deliver 17% YoY topline growth
• While higher commodity costs are likely to drive a squeeze on margins of select sectors
• Earnings growth should remain resilient at 15% YoY
• Expectations of FY27 MSCI India earnings growth of 14% stays

MS India Strategy - Ridham Desai

• Q2: Resilient Growth, Falling Margins
• Expect Nifty revenue growth to rise to 19% QoQ in Q2 from 18%
• While higher input costs may continue to weigh on margins
• Nifty earnings growth is likely to rise on a QoQ basis
• All 10 sectors are expected to register positive revenue growth
• Energy, Consumer Discretionary, and Industrials leading the pack
• Growth in earnings is likely to be led by Consumer Discretionary, Materials, and Communication Services, while Energy and Industrials are expected to report declines
• SBI, Bharti should be the biggest contributors to aggregate BSE Sensex earnings, while IndiGo is expected to be the weakest performer
• Margins are seen declining for seven out of 10 sectors
• Materials and Utilities should show expansion, whereas Energy and Healthcare appear likely to fall the most.

JPMorgan India Strategy – Rajiv Batra

• Q2 earnings preview: Double-digit growth continues
• Resilient domestic demand, early festive inventory build-up and favorable pricing in selective commodity-linked sectors should continue to support double-digit growth
• Expect small- and mid-caps to continue outpacing large caps in earnings growth
• Most compelling high-growth themes - capex, modern manufacturing, and AI/data-center
• Prefer mid/small-caps over large caps
• Overweight Financials, Consumer Discretionary, Industrials, Health Care and Materials, and underweight IT
• Forecast Q2FY27 earnings to grow by 17% YoY for Nifty 50 and by 16% YoY for the JPM Universe
• PAT growth is broadly anticipated to be led by Materials & Logistics (Metals, in particular), Hospitals, Retail/Discretionary, Industrials and Financials.

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