Stock Picks Today: DMart, Poonawalla Fincorp, Adani Power, Hitachi Energy And More On Brokerages' Radar

Brokerages have highlighted opportunities across consumer retail, energy, power, NBFC and renewable energy sector issuing fresh calls on Avenue Supermarts, Poonawalla Fincorp, Adani Green, Adani Power, Hitachi Energy, while also sharing their outlook on banks, REIT alongside a broader view on RBI.

Jefferies on Avenue Supermarts

• Maintain Hold; Cut TP to Rs 4000 from Rs 4500
• Margin Shocker
• Strong traffic, higher inflation & one of the best LFL prints in recent quarters
• This highlighted healthy demand during Q2, but profitability disappointed
• Higher food mix, weaker GM, wage inflation & inventory build weighed on earnings & operating cash flow
• Store expansion remained modest, but productivity softened, as evidenced by a multi-quarter low unit EBITDA for Q2
• Cut EPS by 2-3%
• Believe the stock is likely to trade down in reaction to Q2 miss

Citi on Avenue Supermarts

• Maintain Sell; Cut TP to Rs 3250 from Rs 3300
• SSSG improve; margin and cash flow pressure persists
• Profit growth has lagged revenue growth in last 11 out of 14 quarters
• Quick commerce competition, lower other income and higher interest cost weighs on profit

MS on Avenue Supermarts

• Maintain Overweight; Cut TP to Rs 4182 from Rs 4464
• See lower FY27 margins at 7.5% vs 7.6% estimate earlier
• Expect gradual margin improvement to 7.6% by FY29
• Cut FY27-29 EPS estimates by 4%

Jefferies on Poonawalla Fincorp

• Maintain BUY With TP of Rs.560
• Sep Q Results: Profit Beat; Strong Growth; Margins Surprise Positively
• PFL's Sep'Q PAT of Rs3.7bn (22%QoQ) was above ests led by better NIMs
• AUM grew 55% YoY. NIMs rose on better yields.
• NIMs surprise positively and should improve despite rate hikes
• Credit cost fell 20+bps QoQ
• New product scale up should drive 40% AUM CAGR over FY27-28e
• Gap between disbursement and book yields should lift NIM despite drag from rate hikes
• Potential insurance cap may dent fee income
• Better NIM, lower opex and credit costs should drive sharp profit growth and lift RoE to 15% by FY28e (6% FY26).

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Macquarie on Hitachi Energy India

• Maintain Outperform with TP of Rs.38,500
• Building Scale; Driving Margins
• Recent meeting with mgmt reinforced positive view on both the company and the broader power T&D sector
• Co remains well positioned to capitalise on the significant transmission opportunity in India and overseas
• Continues to expand its addressable market through new offerings targeted at the fast-growing data centre & battery energy storage system (BESS) segments
• Mgmt remains confident on the order pipeline across both domestic and international markets

Elara Capital on Adani Power

• Initiate coverage with Accumulate with TP of Rs. 220
• Growth visibility intact; upside largely priced in
• Thermal power is likely to remain critical to India's near- to medium-term power security
• 24GW locked-in expansion, taking capacity from 18.3GW to 42.0GW, provides strong growth visibility
• Around 60% of the pipeline is Brownfield, enabling faster execution
• 55% is backed by long-term PPA
• Cos proven ability to acquire and turn around stressed assets offers an additional avenue for value creation
• Believe much of this growth potential is already reflected in the current valuation.

Jefferies on Adani Green

• Maintain Buy with TP of Rs 1695
• Multiple triggers ahead
• Adani Green is the leading BESS player
• El-nino potential in 2027 would further fuel demand
• Khavda's higher irradiation level could drive upside to utilisation levels
• Balance sheet intact for execution.

Jefferies on Banks

• RBI Tightens Daily CRR; Small Impact on NIM, to Flow Through to NBFCs/ Corps
• In line with the change in MPC stance to ‘calibrated tightening', RBI raised daily CRR from 90% to 99%
• Banks need to fully meet full CRR norm of 3% of NDTL
• At 100% CRR, banks would carry Rs 8 lakh cr in CRR
• If this lifts balances by 5-10%, it can withdraw Rs400-800bn of liquidity & add 1-2 bps to cost of funds
• It is a small dilution of NIMs & banks may be able to pass to borrowers
• In a rising rate period, we prefer banks over NBFCs.

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MS on REIT

• Embassy REIT – Downgrade to Equal-weight from Overweight; Cut TP to Rs 455 from Rs 460
• Brookfield REIT – Downgrade to Underweight from Equal-weight; Cut TP to Rs 330 from Rs 340
• Mindspace REIT – Maintain Overweight; Hike TP to Rs 550 from Rs 490
• Knowledge REIT – Maintain Overweight; Cut TP to Rs 120 from Rs 127
• Strong GCC expansion outlook should support double-digit returns for Indian REITs overall
• Mindspace remains our preferred play; data centre portfolio provides a differentiated growth opportunity
• Embassy: low MTM potential and limited completions constrain organic growth; higher leverage restricts acquisition headroom
• Brookfield: negligible development pipeline limit organic upside; gross debt level is highest which adds risk to DPU growth amid the rate hike cycle.

Citi on RBI

• FX windows for OMCs, provides clear direct support by moving a recurring source of dollar demand
• On FERR's impact, around Rs 60000 – 70000 cr liquidity could be absorbed even if importer hedging reduces substantially
• Importers might shorten hedges, likely shifting dollar demand towards spot and NDFs, with net impact on forward points being ambiguous
• Believe that these measures should result in knee-jerk INR appreciation followed by some consolidation
• Package raises the near-term cost of rupee depreciation trades; it does not remove the underlying BoP pressures.

JPMorgan on RBI

• RBI has announced a special window to meet the USD requirements of public sector OMCs
• This effectively removes a large part of $12bn/month net oil import dollar demand from the onshore FX market, equivalent to ~16% of the total goods import bill
• To suck out further liquidity, the RBI announced OMO sales of Rs 25000 cr and raised the minimum daily maintenance of the CRR to 99% from 90%
• These measures would suck out Rs 50000 cr of durable liquidity from the system
• Banking-system liquidity is likely to tighten in the coming days, which should move money market rates closer to the policy rate

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