Brokerages' Radar
Photo: NDTV Profit
Brokerages issued fresh views on Kotak Mahindra Bank, Tata Motors PV, Titan, Dr Reddy, Cummins, MCX, WeWork, KPIT Tech alongside commentary on FMCG, OMCs, Clean Energy, and India Strategy.
Jefferies on Kotak Mahindra Bank
- Maintain Buy with TP of Rs 450.
- Kotak Bank will acquire Deutsche Bank's India retail bkg, private bkg, & Wealth Mgmt business.
- To Kotak's loans/deposits/AUM, it adds 6%/3%/1%; takes 84 bps of CET1.
- Deal looks accretive with scope to cross-sell.
- Comes days after Kotak's CEO chose not to renew his term after Dec-26.
- Buy stays but lower in pecking order.
Investec on Kotak Mahindra Bank
- Maintain Hold with TP of Rs 420.
- Acquires DB India's retail & SME business; execution crucial for gains.
- Consideration paid is Rs 280 cr, which is over and above the Rs 13000 cr cash outgo for net assets.
- Expect the transaction to be RoE accretive, while consuming 85 bps of CET1.
- Do not expect the benefits to be substantial or immediate.
- Transaction signals management's intent to deploy excess capital, which is a positive.
MS on Kotak Mahindra Bank
- Maintain Overweight with TP of Rs 500
- Expect it to be ROE accretive with a CET1 impact estimated at 84 bps
- The transaction aligns with its strategy to build an affluent and SME banking franchise
- Think the transaction appears attractive, although we will need more details to ascertain profitability and time lines
Citi on Kotak Mahindra Bank
- Maintain Buy with TP of Rs 485
- Deutsche Bank Business Acquisition: ROE Accretive, Capital Efficient
- Accelerates Affluent/SME Banking
- Key to monitor: Customer attrition during transition phase, Integration execution, regulatory timelines
Macquarie on Kotak Mahindra Bank
- Maintain Neutral with TP of Rs 455.
- Kotak–Deutsche Deal: Capital consumption limited.
- Small addition to balance sheet and limited capital consumption.
- Purchase consideration of Rs 280 cr to be written off on close.
- Excess capital put to use; integration remains key.
GS on India Clean Energy
- Schneider Electric – Maintain Buy with TP of Rs 1,475.
- Order inflow momentum to remain strong.
- See higher margins supported by operating leverage.
- See better risk-reward.
- Hitachi Energy – Maintain Neutral with TP of Rs 30,350.
- Higher earnings, but peak order inflow growth could limit multiple expansion.
GS on FMCG
- FMCG revenue growth acceleration driven by HPC, as pricing growth supplements resilient volumes.
- Input cost inflation likely to have modest impact on EBITDA margins for HPC companies, which is also somewhat backward-looking.
- Tata Consumer, Nestle, Marico likely to lead in EBITDA growth, but will see moderation in revenue growth.
- HPC companies to see strong revenue acceleration in Q1, and poised for further acceleration in Q2 aided by low base of GST de-stocking.
- ITC likely to see a sharp profit decline driven by peak impact of cigarette tax hikes.
- United Spirits likely to deliver weak results.
- Asian Paints and Pidilite likely to see price driven revenue acceleration.
GS on Titan
- Maintain Buy with TP of Rs 5400.
- Gold price correlation with Titan's jewellery revenue growth is a mixed bag.
- Gold price fall will also drive some earnings tailwinds.
- Jewellery margins ha n ve potential to expand.
- Working capital release leading to higher cash flow and lower interest costs.
Jefferies on Dr Reddy
- Maintain Underperform with TP of Rs 1040.
- The Sky Is Not Blue Enough.
- Stretch estimates for two key drivers; Sema in Canada and Abatacept in US.
- FY27-28 EPS est increase by 3-9% vs base est.
- See fair value at Rs 1,540, which suggests a modest 13% upside even in an optimistic scenario.
- Believe risk-reward is unfavourable and reiterate Underperform rating.
Macquarie on Cummins
- Maintain Outperform with TP of Rs 5850.
- PowerGen Driving the Next Phase of Growth.
- See strong data centre demand in India.
- Mgmt confident of sustaining margins through operational efficiencies.
- Export growth remains healthy across most regions, despite weakness in the Gulf market.
Macquarie India Strategy – Aditya Suresh
- Portoflio Changes –
- Stars:
- Take profit on M&M and introduce TVS Motor
- Keep winners Titan and JSW Steel
- Incrementally more bullish on BHARTI Airtel
- HDFC Bank has been a key detractor; continue to like the fundamental outlook and believe negativity is in the price
- Rising Stars:
- Added LENSKART, Phoenix Mills
- Removed MMT and Amber
- Tactical:
- Added Axis Bank, HYUNDAI and Dixon
- Removed Shriram Finance, RELIANCE and COAL India
Jefferies on MCX
- Initiate Buy with TP of Rs 3600.
- A Long Runway in an Underpenetrated Market.
- Commodity market lags equities, but penetration should rise.
- MCX—the leading non-agri exchange—well-placed to benefit.
- Forecast MCX's revenue to grow at 20% CAGR despite the elevated base.
- New product scope and retail participation is at 1/5th of NSE.
- Along with 260 bps margin expansion, earnings CAGR is forecasted to be 22% to FY29.
- Target price offers 27% upside; Optionalities could add further 15-20% upside.
Jefferies on WeWork
Maintain Buy with TP of Rs 900.
- WeWork India's management highlighted its right to win in a crowded flex market space.
- Independent consultant and key occupiers see AI driving a change in quality of office demand.
- Inherent business uncertainty actually working in flex's favour.
- Believe WeWork remains on track for a 20%+/25%+ Revenue/Ebitda growth trajectory.
- Maintain BUY with valuations attractive.
Citi on Tata Motors PV
- Maintain Sell with TP of Rs 320.
- Sierra now in the EV Avatar.
- Sierra is positioned well but EV space is getting competitive.
CLSA on OMCs
- Recent collapse in crude prices will bring a period of much needed relief for IOCL, BPCL and HPCL.
- Like 2022, expect retail fuel prices to remain steady to allow OMCs to earn supernormal margins.
- This will help them recover the large loss made on fuel sales when crude prices shot up in the April-June quarter.
- Urge investors to not extrapolate this period of relief.
- Fiscal deficit targets may force the government to reverse its recent Rs 10/litre excise duty cut on auto fuels in the coming months if crude price do not spike up.
JPMorgan on KPIT Tech
- Downgrade to Underweight from Neutral; Cut TP to Rs 550 from Rs 700
- Profit warning for Q1; Margins to also be under pressure
- FY27 to be second successive year of org revenue decline
- Put KPIT TECH at the bottom of IT/ERD coverage on growth
- Cut revenues by 5-8% and margins by 20-270bps over FY27-29E, driving 9-22% EPS cuts.
Disclaimer: The views and opinions expressed by the investment advisers on NDTV Profit are of their own and not of NDTV Profit. NDTV Profit advises users to consult with their own financial or investment adviser before taking any investment decision.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
