Brokerages have highlighted opportunities across EMS, consumer services, industrial explosives, and telecommunication sector, issuing fresh calls on Dixon Technologies, Solar Industries, Urban Company, Indus Towers while also sharing their outlook on MDR for UPI transactions and the latest fund manager survey findings.
CLSA on Dixon Technologies
- Maintain Underperform with TP of Rs 10600
- Fighting on three fronts
- Demand, premiumisation and competition weigh on outlook
- Decelerating demand, seen via a third consecutive quarter of industry volume decline
- Accelerated move towards ultra-premium ecosystems
- Rise in competitive intensity as brands diversify their manufacturing partnerships
- Key customers face higher volume pressure given the rise in prices, with Xiaomi and Transsion losing share
- Incremental growth opportunities are harder to find, while the benefits of backward integration appear largely priced in.
UBS on Urban Company
- Maintain Buy with TP of Rs 180
- Demand Supply Flywheel in Motion
- Core home services growth driven by new users and higher frequency
- InstaHelp focused on density, quality and customer acquisition.
UBS on Indus Towers
- Maintain Sell with TP of Rs 395
- Primed to benefit from telco network expansion
- Expansion of VIL network is the principal near-term opportunity
- Energy efficiency and network quality provide differentiation
- Africa to be a long-term opportunity with higher costs and returns thresholds.
Jefferies on Solar Industries
- Maintain Buy with TP of Rs 28160
- Acquisition could dilute FY28E-29E EPS by 4-6% & 1% in FY30E on normalised growth assumptions
- Defence share is likely to fall to 22-25% by FY30 vs 35-40% expected earlier
- Management guidance suggests 0-3% EPS accretion without too much synergy benefit
- Believe the correction offers a heightened opportunity to own a business with a 30% EPS CAGR potential & 25%+ ROE even considering the acquisition
Citi on MDR on UPI
- From Free Rails to (MDR) Fee Rails
- YES Bank - A Standout Beneficiary
- Estimate net incremental ecosystem revenue of Rs 16000-17000 cr/year
- The split roughly would be 60% for banking system, 25% for UPI-App Provider, and 15% non-bank payment aggregators
- Given outsized UPI beneficiary volume share, YES is the standout beneficiary (5-10% of PPOP/6-12% of PBT)
- This is followed by Bank of Baorda/PNB/IndusInd (+2% PBT), Axis/SBI/Federal (1-2% PBT)
- View this as a structurally positive, long-awaited monetization event for UPI-heavy banks and TPAPs.
GS on MDR on UPI
- Announced UPI MDR could drive material earnings upgrade
- See 40-70% potential upside to FY28 EBITDA estimates for Paytm
- 40 bps MDR on P2M transactions vs 20-30 bps expected
- Calculation (based on NPCI data) suggests 50% of all transaction value will accrue at 40 bps MDR
- Calculation implies about Rs 20600 cr of potential revenue pool for the industry from the announced UPI MDR
- Suggest incremental EBITDA of about Rs 1400 cr in FY28 for Paytm in a high end scenario.
JPMorgan on UPI on MDR
- UPI MDR reinstated: Positive for ecosystem economics, with issuer banks emerging as key beneficiaries
- View the newly announced framework as positive for Indian banks and payment players, albeit with an uneven distribution of benefits
- Estimate the total maximum revenue pool from this initiative at Rs 17000 cr
- Banks - issuer+acquirer combined pool at Rs 11700 cr, accounting for 2.1% of FY26 net profit for listed commercial banks
- Payer Platform Service Provider (Rs 1700 cr) and Third Party Application Provider (Rs 3400 cr), with the quantum higher for mid-tier banks like Yes Bank.
ALSO READ: UPI MDR Explained: 0.4% On Big Spends, Rs 300 Cap, Flat Rs 5 For Essentials — Here's A Breakdown
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
BofA Fund Manager Survey
- Sept BofA Global FMS shows investor conviction on macro boom & fast-paced AI capex still strong
- But risks of disorderly bonds and DEM midterm sweep rising
- FMS cash jumps from 3.5% to 3.9% as excess bullishness, which stymied summer risk upside, now fading
- When cash back in 4-5% neutral zone, safe to increase risk exposure
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