From TCS to UPL-Check out the top stock calls, upgrades, downgrades, and target price revisions from leading brokerages ahead of today's trade.
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STOCKS IN THIS STORY
Brokerages have spotlighted opportunities in IT, hospitality, agrochemicals, and fintech, with fresh recommendations on TCS, Indian Hotels, PB Fintech, and UPL, while offering broader perspectives on oil and gas, consumer finance, hospitals sector alongside a view on India strategy.
MS on TCS
- Maintain Equal-weight with TP of Rs 2200
- The MHP acquisition strengthens TCS's capabilities
- Porsche engagement provides a long-term strategic relationship
- See the acquisition to be complementary to TCS
- Think the financial impact of the acquisition would be limited
- It would add ~3% to revenue growth and <1% to PAT assuming mid-single-digit margins
- See TCS intensifying its strategy to use the M&A route to plug in white spaces
- Should be a medium-term positive
- See investors' key concerns as slowdown in the auto vertical in the near term and also a declining revenue profile of the acquired entity.
Citi on TCS
- Maintain Sell with TP of Rs 1825
- Acquisition will anchor a long-term partnership with Porsche
- Assuming EUR600–700mn run-rate for FY28 and 7–9% EBIT margins, it would translate to ~5–8x EV/EBIT
- Valuations appear low, but there is risk of a revenue decline and other European IT companies trade at similar valuations
- Such deals across the sector, could support growth near-term, but there is risk of existing book declining YoY increases
- Remain cautious on Indian IT.
CLSA on TCS
- Maintain Hold with TP of Rs 2326
- Deal win will be a part of TCS' orderbook in Q2 while the acquisition will close in 3-4 months
- TCS will try and increase the profitability of the acquired entity by leveraging offshoring
- Acquisition will fill white spaces in auto consulting and increase TCS' exposure in the European auto market.
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Bernstein on PB Fintech
- Maintain Outperform with TP of Rs 2310
- PB Fin has built a phenomenal sales engine with high growth, high renewals & lower claims
- This is resulting in high take-rates
- In an industry that struggles for growth, PB Fintech grows top-line at 30-35%+, at scale
- Near-term regulatory clouds exist, but our channel checks corroborate price action (cuts unlikely to be harsh)
- Delay in regulations partly comes from the understanding that take-rates are high for a reason, and growth is the regulatory priority
- Don't miss the woods for the trees.
Jefferies on UPL
- Maintain Buy with TP of Rs 715
- Met with the senior management of UPL
- Company is confident of full year growth guidance (10-14%) with Q2 growth shaping broadly in line
- Company expects Ebitda margin to improve on rationalization of unprofitable parts of the business
- Company has a tight leash on inventories in Latam in light of the El Niño
- Marketing of the Advanta IPO should start soon
- Project 14% Ebitda growth in FY27E.
Citi on Oil & Gas
- India Energy Security Policy Package Expands Beyond Emergency Response
- Gov't has rolled out a multi-pronged energy security agenda spanning SPRs, import substitution, domestic production, gas adoption, and upstream exploration
- ONGC is likely to directly shoulder incremental capital deployment on SPRs and offshore E&P
- GAIL could participate in coal gasification and fertiliser JVs, alongside LPG pipelines
- Potential compensation is a key monitorable for OMCs
- Prefer OMCs and GAIL
Jefferies on Indian Hotels
- Maintain Buy with TP of Rs 875
- Simplification Continues; Growth Outlook Strong
- All-stock deal values Oriental Hotels at a 50% discount to Indian Hotels
- Deal is EPS accretive from year one
- Oriental adds non-LFL growth with scope for margin/Revenue improvement
- Operationally, Q2 trends remain strong, and FY27 RevPAR growth could stay in double digits
MS on Indian Hotels
- Maintain Equal-weight with TP of Rs 793
- Consolidating Assets at Attractive Valuations
- Transaction adds 5% to FY26 topline and 4% to EBITDA
- Deal is EPS accretive from year one
- Post-merger, could see revenue and margin synergies
- Deal implies 15x FY27 EV/EBITDA vs. IHCL at 29x.
Nomura on Indian Hotels
- Maintain Buy with TP of Rs 830
- Oriental Hotels' acquisition likely to be EPS accretive
- Further cost synergies and asset optimization/upgrades could drive EBITDA higher
- Merger will further simplify the group's holding structure.
Jefferies on Consumer Finance
- NBFCs: YTD Stock Returns Earnings Driven Not Valuations; Stay Positive
- NBFCs have outperformed banks, led mostly by EPS/Book Value upgrades
- P/B multiples are down YTD for most incl. Bajaj FInance, Chola Finance, Shriram Finance despite strong growth
- Earnings & asset quality visibility is stronger, but valuations are below start of year multiples
- Further re-rating may be modest, but strong earnings growth/ EPS upgrades should drive outperformance
- Top picks- Bajaj Finance, Chola Finance, AB CAPITAL and Shriram Finance
HSBC India Strategy - Prerna Garg
- Despite oil shock, earnings show resilience for now
- Results ahead of expectations, growth in small and mid-caps stands out
- GST cuts, RBI's easing supported demand; price hikes and inventory gains helped offset higher raw material costs
- This could fade in H2; FY27 growth stands at 14.3%
- Remain neutral India in an Asia context
- Looking ahead, there's a risk of downgrades in coming quarters as commodity prices stay elevated
- The impact of further price hikes on demand is another risk.
Jefferies on Hospital
- MPD-2047 aims to strengthen Delhi's position as a healthcare and medical tourism hub
- This will be done through expanded infrastructure, improved local and regional connectivity, and policies supporting higher-density development
- Measures such as removal of height restrictions and high FAR could improve utilization and facilitate capacity additions
- Direct impact is strongest for Delhi assets, benefiting NCR-focused operators such as Max, Fortis and Medanta.
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