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Poonawalla Fincorp Ltd., State Bank of India, Jubilant FoodWorks Ltd. and auto stocks are among the counters that have drawn commentary from top brokerages on Thursday. UBS has initiated a 'buy' call on Poonawalla Fincorp, citing solid franchise development, while HSBC has hiked target price for Mahindra and Mahindra Ltd. and Escorts Kubota Ltd.
UBS on Poonawalla Fincorp
- Initiate Buy with TP of Rs 640.
- Solid franchise in the making.
- Strong management and promoter-driven AAA credit rating are key positives.
- LAP and gold loans to be anchor products.
- ROA to reach 2% by FY28E, supported by margins and cost.
HSBC on Jubilant FoodWorks
- Maintain Buy with TP of Rs 700.
- At the right temperature to consume.
- Investor feedback raises questions around sustained margin improvement and expensive valuation.
- Margin improvement is on track visible in Q3FY26 too.
- Adjusted Domino's PE for FY27/FY28e (52/42x) looks reasonable.
- Preferred pick in consumer discretionary.
CLSA on SBI
- Maintain Outperform with TP of Rs 1,275.
- Good performance on growth, profitability; a core portfolio stock.
- De-risked the balance sheet while also growing faster than the industry.
- Pick-up in CASA growth after three muted years; twin benefits of high LCR.
- RWA/Total assets much lower than peers; Valuation gap to narrow.
BofA on IDFC First
- Downgrade to Neutral from Buy; Cut TP to Rs 75 from Rs 95.
- De-empanelment introduces near term headwinds.
- Fraud incident in government accounts of ~Rs590 crore.
- Likely impact CASA growth, cost of funds and opex.
- Bank currently has almost 8-10% of total deposits from central government, state government and other PSBs.
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BofA on Auto Sector
- GST boost holding: Demand in top gear across segments.
- PV: Demand resilient & discounts down. M&M and Tata lead.
- 2Ws in fast lane; Both domestic & exports firing.
- CVs in early stage of cyclical recovery.
- Tractors: investor concerns emerging on cycle peaking in FY27 amid early El Nino warning.
HSBC on Indian Tractor Industry
- Weak monsoon outlook, yet water reserves and replacement demand are supportive.
- The outlook for the tractor sector is now subdued, primarily due to the anticipated El Niño effect.
- Long-term penetration remains attractive.
- Regional reservoir levels are slightly negative for M&M.
- M&M – Maintain Buy; Cut TP to Rs 4150 from Rs 4250.
- Escorts – Maintain Buy; Cut TP to Rs 3600 from Rs 3700.
UBS on Shaily Engineering
- Maintain Buy with TP of Rs 4000.
- Received order from domestic pharma company for pen injectors to supply over 4 years.
- This order shows the momentum building around generic semaglutide launch in India with the patent expiring in March.
Antique on Canara HSBC Life
- Initiate Buy with TP of Rs 190.
- Play on banca led growth.
- Banca to drive industry leading near-term growth.
- Product mix to improve in favor of protection and annuities.
- VNB margin to improve despite investments in agency channel.
- Persistency improving; solvency strong.
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BofA on IT Sector
- 2026 to be the year of AI for knowledge workers.
- Agentic AI opportunity for services is moving fast.
- Supports the case for a net expansion in total addressable market.
- Projects likely to be higher in value, shorter in duration.
- Deflation estimation is still getting established.
Jefferies on Power Utilities
- Discoms turn profitable led by private circles.
- Power discoms reported profits after at least a decade of losses.
- State discoms saw a 70% YoY fall in losses helped also by some rise in state subsidy.
- Believe power capex should rise 2.4x to $290 bn over FY26E-30.
- SEB financials improving adds to sustainable growth.
- Top picks - JSW Energy and NTPC.
Jefferies on Gold Financiers
- Healthy momentum; competitive landscape evolving.
- Gold loans grew 42% as of November 25, aided by gold prices; penetration is rising slowly but stays low.
- Competition is rising with new entrants adding branches.
- Proposed easing of regulatory norms would increase flexibility to large gold NBFCs to expand branches & defend share.
- Gold prices are up 17% YTD, which along with LTV buffer can support healthy growth.
- Post stock price correction, risk reward seems attractive for Muthoot Finance.
Macquarie on Financials
- Are gold loans the new personal loans?
- Rapid growth in gold loans.
- Expect the RBI to be more watchful regarding gold loans.
- If growth continues at such a rapid pace, there could be a fresh round of restrictions in our view.
- Gold prices remain a key factor.
- Will remain watchful of any sharp correction in gold prices.
- This could impact both growth and recovery potential.
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