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Hindalco Industries Ltd., Ola Electric Mobility Ltd., and KFin Technologies Ltd. are among companies that have drawn commentary from top brokerages on Tuesday. Citi has downgraded Ola Electric stock to 'sell' and reduced target price, while Tata Motors Ltd. received a target raise from HSBC.
Citi On Ola Electric
- Downgrade to Sell from Buy; Cut TP to Rs 27 from Rs 55.
- Persistent headwinds to volume growth.
- EV penetration in the Indian 2W sector has been more sluggish than expected.
- GST cuts have further slowed electrification.
- Ola has lost market share, hampered by service issues, high competition, and adverse customer perception.
- Q3 results were below estimates due to negative operating leverage.
- Acknowledge the impressive gross margin trends; and better operating leverage could boost EBITDA.
- Management's efforts to improve product/service quality could take some time to fructify.
- Additionally, large negative cash flow could result in investor concerns on balance sheet-net debt.
ALSO READ: Ola Electric Accelerates Automation Push, Trims 5% Workforce as Turnaround Gains Build
HSBC On Tata Motors CV
- Maintain Buy; Hike TP to Rs 534 from Rs 490.
- Favourable industry backdrop.
- Capacity additions by small fleet operators and replacement demand from large transporters are leading M&HCV demand.
- Industry tailwinds, introduction of new engines, Iveco stability and any recovery in LCV positioning are upside risks.
- Valuations are still at a discount to Ashok Leyland and PV players.
ALSO READ: Tata Motors CV Vs Ashok Leyland: HSBC Picks The Cheaper Stock And Hikes Target Price
InCred On Hindalco Industries
- Downgrade to Reduce from Add; Cut TP to Rs 631 from Rs 785.
- Peak aluminium prices don't bode well for Indian operations.
- Higher capex will lead to leveraging of balance sheet.
- EBITDA to decline to Rs 26,000 crore in FY28F from Rs 36,600 crore in FY26.
- Peak aluminium: Macro-driven rally and rising scrap may drive a 20% price dip, hurting Hindalco Industries' India biz margins.
- High capex and higher leverage: stock typically trades 7.5 times EV/Ebitda in such cycles.
Kotak Securities On KFin Tech
- Maintain Add; Cut TP to Rs 1100 from Rs 1150.
- Healthy growth momentum.
- MF RTA: Mix effect drives lower yields.
- Non-MF businesses: Healthy revenue growth trends.
- Strong execution is the key monitorable.
Brokerages On L&T
Macquarie
- Maintain Outperform with TP of Rs 4620.
- Sale of 1.4 GW Nabha Power Plant is a part of L&T's long-term 'Laksha 2026' strategy to exit non-core and asset heavy businesses.
- Don't expect sale to have a material impact on target price.
- This transaction along with the planned sale of Hyderabad Metro is expected to help improve the balance sheet and capital allocation.
- Company is incrementally looking at investing in new age businesses.
Morgan Stanley
- Torrent Power buys Nabha Power from L&T.
- L&T: See RoCE accretion of 10 bps; asset sale is line with its strategy of divesting its stake in non-core assets.
- Torrent Power: Incremental EBITDA of Rs 1150 crore and would be EPS accretive.
- Torrent Power expects Nabha to generate above mid-teens IRR.
ALSO READ: Five Stocks To Buy: Axis Bank, Power Grid, HDFC Bank, And More
Citi on Go Digit
- Maintain Buy with TP of Rs 435
- Go Digit's Analyst Day hosted by its top management. Key takeaways:
- Focus on increasing share of high-quality channel partners for motor business origination
- Concerted efforts to increase renewal rates in motor
- Segregating channel partnerships based on growth potential and quality of business
- Quarterly monitoring to devise channel specific strategies, in motor business
- Product and service innovation sustains in adoption rate and initial business metrics are encouraging
- Demonstrating business agility in the commercial lines with focus on containing concentration risk
- Increasing granularity of checks in motor TP claims processing to reduce fraudulent claims
- Multiple tech interventions at various stages of the business ecosystem aimed at improving operational efficiency
Incred On NALCO
- Downgrade to Reduce from Hold; Hike TP to Rs 302 from Rs 176
- Peak aluminium prices don't bode well for its Indian operations
- Alumina expansion coming in at a time when prices are falling
- EBITDA to decline to Rs 6170 cr in FY28 from Rs 7260 cr in FY26
Brokerages On IT (AI - Reaction)
Citi
- Concerns due to AI & resulting lightening up in DII positions could result in some valuation gap compression.
- Higher volumes are likely – how much will be done by machines & value capture remains the debate.
- View on Indian IT services remains cautious.
- Concerns are around uncertain spend environment & tech changes, high competitive intensity & fragmentation, faster GCC growth & Impact of AI.
- Infosys & HCL are relatively preferred in large cap coverage.
Nomura
- Does AI pose obsolescence risk?
- Believe these concerns are oversimplifying the role of IT services companies.
- It is easier said than done that a SaaS product and IT vendors can be replaced by vibecoded apps.
- Tech adoption for newer and unproven technologies remains slow given concerns about compliance, regulatory, business and continuity risks.
- SaaS companies have built considerable moats around data, regulatory and compliance infrastructure, tribal knowledge and support infrastructure.
- IT companies have evolved and adapted to the changing technologies.
- Revenue models to change significantly from traditional fixed price and effort-based to outcome driven over a period of time.
- Ability of IT companies to defend margins will lie in the aggression to use automation internally.
- Current sell-off in IT services stocks appears to be a case of front-loading of pains.
- Preferred picks are Infosys among large caps, Coforge among mid caps, and eClerx among small caps.
UBS
- Investor concerns on long term terminal value have come to the forefront, post the Anthropic and Palantir events.
- Market reaction has been driven by concerns that rapid advances in Agentic AI could structurally weaken the traditional IT services.
- Current valuations suggest that investors are now pricing in terminal FCF growth of 4-6%, vs 6-7% just a month ago.
- Believe a structural evolution in business model is key.
- Believe there has been some near term overreaction.
- Still believe we are seeing an improving environment in the near-medium term.
- Will keep a close eye on how quickly and effectively the IT Services companies adapt to this structural change.
ALSO READ: Brokerages Turn Cautious On IT Over AI Fears — Which Stocks Still Make The Cut?
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