Brokerages have highlighted opportunities across IT, banks, industrial equipments, AMCs and agrochemical sector issuing fresh calls on HCLTech, RBL Bank, Gujarat Fluorochemicals, UPL, ICICI Prudential Asset Management Company, Azad Engineering, while also sharing their outlook on pharma, alongside a broader view on CPI.
Kotak Securities on HCLTech
- Maintain Reduce; Hike TP to Rs 1220 from Rs 1200
- Margins surprise, products disappoint, valuations full
- Healthy service growth offset by products weakness
- Revised FY2027 organic revenue growth guidance to 1.6-3.1% (1-4% earlier)
- Mega deals drive bookings rebound
Citi on HCLTech
- Maintain Sell; Hike TP to Rs 1050 from Rs 1030
- Decent Q2; Services Guidance Implies Slow H2
- EBIT margins surprised while software business disappointed
- Mgmt. confident of slightly above the midpoint in services
- Sustainability of margins key
- HCL already trades at 20-25% premium to peers TCS/Infosys.
Kotak Securities on UPL
- Upgrade to Add from Reduce; Cut TP to Rs 570 from Rs 640
- Superform has the right ingredients for growth
- An array of differentiated chemistries with sizeable potential
- Backward integration of Ais underpin UPL's competitiveness vs China
- Holding company discount remains the key overhang
ICICI Sec on Gujarat Fluorochemicals
- Upgrade to Buy from Add; Hike TP to Rs 5380 from Rs 5050
- India's largest battery materials portfolio and at the cusp of inflection
- Two primary components supply to commence from H2FY27
- LFP cathode materials undergoing approvals; commercial supplies expected H2FY28
- Natural anode supplies to commence end of FY28.
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Citi on RBL Bank
- Maintain Buy with TP of Rs 505
- Strong NIM beat tempered by elevated provisioning
- RoA recovery on the horizon
- Advances growth accelerated by wholesale; Deposit mix shifts towards retail
- Capital normalises post deployment; Emirates NBD integration on track.
Jefferies on ICICI Pru AMC
- Maintain Buy; Hike TP to Rs 3760 from Rs 3600
- Q2 Results: Beat Led by Higher Revenue Yield
- Yield improvement led by higher alternates and equity yields
- Redemptions put pressure on net flows, but gross flows did not change
- Alternates expansion on track.
GS on Azad Engineering
- Maintain Buy with TP of Rs 3315
- View BHEL contract as an incremental positive
- Order provides exposure to domestic sourcing of heavy-duty gas turbine components
- Believe addition of a domestic customer supports a broader addressable market for Azad's gas turbine component business
Jefferies on Pharma
- Identifying Future CRDMO Winners
- Past few years have seen a resurgence in India's CRDMO sector, marked by the listings of Sai Life, Anthem Bio, Cohance, and Piramal Pharma
- Yet, a key challenge for investors remains differentiating these companies beyond financial performance
- Outline six factors that drive long-term CRDMO success
- Position Divi's and Sai Life ahead of peers, with Laurus and Anthem also ranking strongly across some of these parameters.
Brokerages on CPI
BofA
- CPI at 5.5%, highest in almost two years
- Will continue to see CPI headline inflation inching up given the higher crude prices and weather-related risks materializing
- Continue to expect RBI hiking repo rate by 50 bps in FY27 and another 25 bps in Q1FY28.
GS
- September headline CPI inflation rose to a 23-month high
- October food price momentum is tracking below September, despite El Niño-related risks
- Preliminary estimate for October headline inflation is 5.9% yoy, driven mainly by higher food inflation due to unfavourable base effects
UBS
- CPI inflation in September was in line with our expectations
- Expect full-year headline CPI inflation to average 5.2% in FY27 and remain above 5% through H1FY28
- As inflation accelerates, real policy rates are likely to turn negative, necessitating a recalibration of monetary policy
- Expect a cumulative 75 bps of rate hike in this hiking cycle, taking the repo rate to 6%
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