Stock Picks Today: TCS, Kotak Mahindra Bank, IDFC First Bank Among Others On Brokerages' Radar
TCS, Kotak Mahindra Bank, IDFC First Bank, Tata Chemicals, Cipla, Titan, Bank of Baroda, SBI Cards, Shriram Finance, SAIL, Mphasis, Bajaj Finserv were among the companies on brokerages' radar.
TCS, Kotak Mahindra Bank, IDFC First Bank, Tata Chemicals, Cipla, Titan, Bank of Baroda, SBI Cards, Shriram Finance, SAIL, Mphasis, Bajaj Finserv were among the companies on brokerages' radar. Analysts have shared their views on these companies.
Several brokerages have also revised their target prices for these stocks based on a fundamental outlook revision. Here are the analyst calls to keep an eye out for today.
On TCS
Investec
Maintained Buy with a target price of Rs 3,705.
They see a 2% workforce cut (12,000 employees) as immaterial.
TCS attributes the cut to skill mismatches, not unusual as companies have 1-2% involuntary attrition.
They believe past managerial roles were tenure-based, and TCS is now addressing an exacerbated situation.
A 3-month severance would mean a 60bps margin impact, then normalization.
These actions should boost resource billability.
Citi
Maintained Sell with a target price of Rs 3,135.
TCS plans to cut ~2% of its workforce by FY26.
CEO cites agility and future-readiness, not AI or reduced staff needs.
Citi sees multiple industry shifts: productivity demands, skill mismatches, and margin pressure.
Q1 earnings suggest ongoing core market sluggishness.
They remain cautious on margin/cash flow trends.
On IDFC First Bank
Morgan Stanley
Maintained Equal-weight; cut target price to Rs 68 from Rs 70.
Q1 was muted, with a gradual recovery expected.
Strong loan and deposit growth were positive.
Negative was asset quality, especially elevated MFI NPAs.
They expect RoA to rebound from 0.4% in FY25 to 1% in FY27.
Valuations (1.1x FY27 book for ~10% RoE) largely price this in.
Jefferies
Maintained Buy rating and hiked the target price to Rs 82 from Rs 80.
They observed a slight miss in Q1 due to higher credit costs.
The Special Mention Account (SMA) book of MFI almost halved quarter-on-quarter, which could lead to lower slippages and credit costs.
Other segments saw slightly higher slippages due to soft economic conditions.
A lower cut in the savings bank rate, despite a higher cut in the term deposit rate, is expected to delay margin benefits.
Jefferies cut FY26 Earnings Per Share (EPS) by 9%, while the cut for FY27-28 is lower at 4%.
They highlight RoA improvement as key.
On Kotak Mahindra Bank
Morgan Stanley
Maintained Overweight rating and cut the target price to Rs 2,600 from Rs 2,650.
They characterized Q1 as a soft quarter in a tough macro environment.
While growth was stronger than the system, the Net Interest Margin (NIM) decline and Non-Performing Loan (NPL) formation were higher than expected.
They anticipate Q2 will remain tough due to further margin decline.
Morgan Stanley expects earnings to accelerate thereafter, driven by lagged repricing of deposits, Cash Reserve Ratio (CRR) cut benefits, and an improvement in the loan mix.
Nomura
Maintained Neutral rating and cut the target price to Rs 2,150 from Rs 2,200.
They noted soft performance on asset quality and margins.
The bank saw strong loan and deposit growth.
Profit After Tax was aided by lower operating expenses, but NIMs saw a sharp decline, and credit cost inched up.
Nomura cut FY26-28 EPS by 3-7%.
Bernstein
Maintained Market-Perform rating with a target price of Rs 1,950.
They stated that Q1 saw credit costs bite and margins slide.
The quarter was weak across key metrics, with sharp NIM compression and a multi-quarter high in credit costs driving RoA below 2%.
Adjusted for one-offs in Q1 FY25, EPS declined 7% year-on-year despite healthy 14% loan growth.
Jefferies
Maintained Buy rating with a target price of Rs 2,550.
They noted weaker core numbers in Q1, with higher cuts in deposit rates expected to aid earnings.
Jefferies trimmed FY26 EPS by 5% but made only a slight change for FY27-28.
They believe the valuation is in line with ICICI Bank and a slight discount to HDFC Bank.
Morgan Stanley On Tata Chemicals
Maintained Underweight rating with a target price of Rs 839.
They reported a healthy beat to consensus estimates.
Margins positively surprised across India, the US, and the UK, despite a miss on volumes.
Basic Chemistry EBITDA per ton rose by 66% quarter-on-quarter.
On Cipla
Jefferies
Maintained Hold rating and hiked the target price to Rs 1,690 from Rs 1,610.
They noted that key markets disappointed in Cipla's Q1, with US launches expected to start reflecting in H2 FY27.
India's growth was tepid.
US sales were lower than expected but offset by strong Rest of World (ROW) sales and higher other income.
US sales could reach $1 billion in FY27 or after.
Jefferies hiked FY26-28 estimated EPS change by 2-3%.
HSBC
Maintained Buy rating with a target price of Rs 1,740.
They observed a Q1 beat due to a better sales mix and lower operating costs.
Cipla retains its 23.5-24.5% EBITDA margin guidance for FY26.
The outlook remains intact, as HSBC expects upcoming differentiated launches in the US to offset the decline in generic Revlimid sales.
They highlight a decent lineup of differentiated launches, with the approval and launch of generic Advair in the US as a key catalyst.
Macquarie On Titan
Maintained Outperform rating with a target price of Rs 4,150.
They liked the strong brand position of Damas and the large growth headroom in UAE and Kuwait.
They appreciate the ability to experiment and learn about lab-grown diamonds and premium designs through Damas.
Macquarie also liked Titan's clarification of no further acquisitions in international geographies in the near term.
They did not like the slower-than-expected path to EPS accretion and the higher-than-expected 20% sales salience of the Graff Monobrand franchisee business, which is not part of the acquisition.
On Bank of Baroda
Morgan Stanley
Maintained Underweight rating with a target price of Rs 235.
They noted a 4% Net Interest Income (NII) beat, mixed asset quality, and PAT largely in line.
A key positive was net interest income.
NIMs were down 4 basis points quarter-on-quarter and better than most banks that have reported so far.
Asset quality was steady in MSME but saw one account slip in the overseas book.
Morgan Stanley expects profitability to moderate and maintains an Underweight rating.
Jefferies
Maintained Hold rating and hiked the target price to Rs 255 from Rs 245.
They observed that NPLs in international loans dragged profit in Q1.
A pullback from corporate lending helps manage margins.
Slippages rose in international and MSME loans.
Higher Loan-to-Deposit Ratio (LDR) may limit credit growth.
On SBI Cards
Macquarie
Maintained Neutral rating with a target price of Rs 1,040.
They highlighted the persistent challenge of asset quality.
PAT miss was driven by higher credit costs.
They noted a return to square one, with credit cost rise driven by a change of assumptions in the Expected Credit Loss (ECL) model.
A decline in funding costs is expected to provide some margin cushion for FY26 estimated.
HSBC
Maintained Buy rating and cut the target price to Rs 970 from Rs 1,070.
They noted that the performance is not panning out as expected.
HSBC cut EPS by 5-17% for FY26-28 to reflect gradual asset quality improvement and slower recovery in growth and NIM.
They believe there could be a surprise in both Assets Under Management (AUM) growth (recovery in H2 off a low base) and NIM (faster rate transmission).
On Shriram Finance
Macquarie
Maintained Outperform rating with a target price of Rs 850.
They noted that the company is testing patience on margin improvement.
PAT was in line, with lower credit costs offset by lower NIM.
Credit cost declined quarter-on-quarter, and the stage-2 increase is transient.
Liquidity drag leads to lower NIM, implying downside risks to Return on Assets.
HSBC
Maintained Buy rating and cut the target price to Rs 730 from Rs 770.
They observed that Gross Stage 2 loans have increased 6-9% quarter-on-quarter in consecutive quarters, but management has held its credit cost guidance.
AUM growth remains in line, but the NIM trajectory is lower due to high liquidity, estimating a 30-35 basis points NIM drag due to this.
HSBC cut EPS by 2-4% for FY26/27 and retains a Buy rating on potential recovery in H2 FY26.
Morgan Stanley On SAIL
Maintained Underweight rating with a target price of Rs 105.
They noted a big EBITDA miss in Q1, with both raw material costs and "other" operating expenses higher than expected.
EBITDA missed consensus estimates by 16%, with adjusted EBITDA 22% below estimates.
Realizations were higher than expected, even after adjusting for rail price revisions.
Motilal Oswal On Vmart Retail
Upgraded to Buy from Neutral and hiked the target price to Rs 1,035 from Rs 945.
They observed a strong beat on profitability.
EBITDA increased by 28% year-on-year, with a big beat on margins due to lower loss rates.
Higher footfalls and volume drove growth as Average Selling Price (ASP) moderated in Unlimited.
Nomura On Mphasis
Maintained Neutral rating and hiked the target price to Rs 2,760 from Rs 2,700.
They noted strong deal wins in Q1 FY26.
Growth improvement is likely in FY26.
A strong deal pipeline driven by AI and high Banking, Financial Services, and Insurance (BFSI) exposure are expected to aid revenue visibility.
EBIT margin is projected to remain stable.
UBS On Petronet LNG
Maintained Buy rating with a target price of Rs 375.
They stated that earnings for the quarter were impacted by provisions, broadly in line with expectations.
Long-term volume growth drivers remain in place.
Goldman Sachs On Bajaj Finserv
Maintained Sell rating and hiked the target price to Rs 1,785 from Rs 1,680.
Q1 FY26 was inline, showing mixed performance, and the growth outlook moderates.
They cut FY26-28 EPS estimates by 4% to 9% to factor in slower topline growth, lower margins, and updated management commentary from the call.
Goldman Sachs On Laurus Labs
Maintained Sell rating and hiked the target price to Rs 675 from Rs 600.
Q1 was above expectations, with the Contract Development and Manufacturing Organization (CDMO) business moving from strength to strength.
They hiked FY26-28 estimated EPS by 3-22% to factor in marginally faster topline growth, better margin progression, and a revised business outlook.
Goldman Sachs remains a Sell on valuations.
Bernstein On Home First
Maintained Outperform rating with a target price of Rs 1,650.
They observed a slowdown in disbursement growth.
NIM expanded as the spread stayed constant.
There was a marginal pick-up in credit cost.
The first sequential decline in disbursals is bound to raise some concern.
Citi On Aadhar Housing
Maintained Buy rating and hiked the target price to Rs 605 from Rs 565.
They noted robust disbursements, with lower operating expenses offsetting elevated credit costs.
AUM growth was 22% year-on-year, and they expect emerging centers to drive incremental growth.
Gross Stage 3 (GS3) increased due to seasonality, and credit cost remained elevated at 41 basis points.
A drop in the cost of borrowings supported spreads, and operating expenses fell from an elevated base.
